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Tutoring Companies Stand to Cash In on States That Lose Waivers

Written by guest blogger Michele Molnar. This post first appeared on Marketplace K-12.

Private tutoring companies in Washington are likely to get an influx of new students this fall, a direct result of the loss of the state's No Child Left Behind Act waiver in April. And by next year, Oklahoma could be another land of opportunity, after being denied an extension of its waiver by the U.S. Department of Education this week.

"I know of some providers that are expanding operations to these new markets," Steve Pines, executive director of the Education Industry Association, wrote in an email. The Vienna, Va.-based organization includes some tutoring companies among its members

With about 20 states still waiting for waiver extensions, in addition to seven California districts that formed a coalition independent of their state, the tutoring industry could be ready for a bit of a rebound if many more denials are issued by the department in coming weeks.

Last year, we reported that tutoring companies were hard-hit when waiver setbacks meant loss of funding for the businesses that are called "supplemental educational service" providers in the law.

When the department revokes or denies states an extension of the waiver from the law's requirements, districts that are in the "improvement" category must devote 20 percent of their Title I funding to providing transportation for school choice, and after-school tutoring, usually through private contractors.

Now, an article from The News-Tribune in Tacoma. Wash., indicates that thousands of low-income families in Washington have started to receive direct mail offers for free tutoring from these providers. The companies' marketing and outreach for eligible students cannot include incentives in Washington, according to Gayle Pauley, Title I programs director with the state's Office of Superintendent of Public Instruction. By not allowing incentives, "we really feel this will help families find those providers that want to help a child who needs to be a better reader or mathematician," Pauley said.

In past years, tutoring companies in many states attracted families by offering enticing incentives, from computers to MP3 players. That practice is one of many that the U.S. Department of Education's Office of the Inspector General addressed in a report on fraud in Title I tutoring programs, which details problems like free food offered to students who then failed to stay for tutoring sessions.

Of course, counting on the vicissitudes of waiver revocations or extension denials from the federal government could be challenging for tutoring companies' business models. Politics K-12's Lauren Camera reports that the education department is giving Oklahoma more time to implement tutoring and choice. (The state must now transition back to providing these no later than the start of the 2015-16 school year.) And, there's an opening for Oklahoma to fix its waiver problem--it was denied an extension after dropping the Common Core State Standards--if it adopts a new set of standards deemed college- and career-ready.

Stay tuned to the Politics K-12 blog for the developments on the department's decisions about the other states and California districts.

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