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Thursday, June 14, 2018

The Games Private Industry Plays with Public Education Dollars--Or Should We Say Business As Usual

From the Education Law Prof Blog

By Derek Black
June 5, 2018


Charter critics have long railed that industry is running a sham--or rather, states are completely okay with what ought to be labeled a sham.

States hand out charters to non-profit organizations and those organizations often transfer the entirety of their revenues to a for-profit organization that runs the school. States know this, but do not seem to mind. And when they do not, a new set of norms take over.

Two unrelated recent stories reminds of a similar problem. One involves student transfers and the other a statewide testing system. The common thread is that private organizations appear to play games, rely on technicalities, and mislead. And none of it is illegal.


Our government may even incentivize it with tax loopholes and legal fictions, or just looking the other way.

The first story involves the recent switcheroo Tennessee just authorized for the folks running its testing system. Chalkbeat reports that Tennessee Education Commissioner Candice McQueen announced that "Educational Testing Service, also known as ETS, will take over design work for TNReady to allow Questar, the exam’s current overseer, to focus on administering the test."


But here's the rub, "while McQueen described ETS as a 'different vendor,' the group actually owns Questar. The New Jersey-based nonprofit organization purchased Minnesota-based Questar in 2017 for $127.5 million to serve as its for-profit arm. Questar CEO Stephen Lazer came from ETS, where he was senior vice president over student and teacher assessments."

This wouldn't be that big of a deal if the underlying reasons for the change weren't so serious, but the change comes because the testing system has been a disaster. Tennessee has been applauded for having one of the best accountability and evaluation systems in the country, but so far, this praise is based on potential, not reality. The testing system hasn't worked yet.


For about a month this spring, its statewide online testing system kept having problems. Over a thousand students lost answers to the questions they had taken. In some districts, the system apparently gave students the wrong subject matter test--social studies rather than science for instance. In my old school district, Anderson County, 450 students were administered tests for the wrong grade level.

These types of problems invalidated a lot of test scores, which then, of course, undermines the validity of the overall accountability system. This is the third straight year that the system has failed in one significant way or another. So, as a practical matter, we don't really know whether Tennessee has found the magic sauce because they can't manage to serve it to their customers.

What we do know is how to cover up the problem. Let private industry play musical chairs with itself and let the state authorities bless it as change and accountability.

As I noted the other day, an entirely different story out of Flagler County is even more troubling. The Palm Coast Observer reports:

"Several days before the Florida Standards Assessments began near the end of the school year, 13 third-grade students suddenly transferred from the Palm Harbor Academy charter school to a newly created private school on the same school campus, run by Palm Harbor Academy governing board chairman, the Rev. Gillard Glover.

With one exception, all of those 13 students had one thing in common: They were at least one full grade behind grade level. Many of the children were multiple grades behind grade level. Another five students in other grades, all at least two grades behind grade level, were also transferred out of Palm Harbor and into the private school at around the same time.

The students’ transfer to a private school meant that they didn’t take the state assessments required of public school students — and, therefore, didn’t drag down the school’s state scores and school grade. A failing school grade would have meant shuttering the school, School Board Attorney Kristin Gavin said, because the school got a D last year.

The school district has portrayed the moving of the students as an attempt by Palm Harbor to skirt the school grade process, at a cost to the students: Those with disabilities who were moved were not being provided state-mandated support, district officials said, at the newly created private school, the Academy of Excellence."


Put the stories together and what do we have? Non-profit charters that aren't really non-profit, new test administrators that aren't really new, and charter school transfers that aren't really transfers. These are just games designed to paper over underlying realities.

Public schools are by no means immune to scandal. But we tend to call public school scandals illegal activity. Public schools have strict rules and transparency requirements. When transparency shines, public officials can go to jail.

Take the cheating scandals that cropped up at the end of No Child Left Behind's reign. A grand jury indicted 35 public school teachers. Take contracts awarded with the expectation of a kickback. Those result in criminal fraud indictments. Take school board members who sign their children up for benefits that they are not eligible for, like free lunches. Well again, those result in indictment. These things disincentivize public schools from playing games.

But when state officials invite private industry in through the front doors of our schools, they have a tendency to treat private industry games as business as usual.

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