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Growth in For-Profit Schools Slowing Down?

A word to for-profit educational management organizations: Someone out there is watching you.

Researchers from a small collection of academic groups—the Commercialism in Education and Education Policy Research Units at Arizona State University, the Education and Public Interest Center at the University of Colorado at Boulder, and the Western Michigan University College of Education—yesterday published their 11th annual report profiling the profit-making organizations hired to manage charters and other types of public schools across the country.

As you probably know, education-management organizations, or EMOs, emerged in the early 1990s as interest grew in market-based school reform proposals. Since the academic group's first report, in 1998, the number of for-profit EMOs profiled by the researchers has soared, growing from 14 to 95 last year.

The scholars contend, however, that the growth spurt is ending. Large companies are cutting back on the numbers of schools they run and diversifying. Buoyed by the supplemental education services provisions in the federal No Child Left Behind law, for instance, some companies are moving into tutoring. Others are taking on the virtual school world.

The list of companies profiled in the report grew this year, nonetheless, because researchers have improved their data-collection techniques, gathering information, for instance, from state education departments rather than relying only on private companies that may be reluctant to share data.

The companies profiled in this year's report collectively enrolled 339,222 students in 31 states last year. More than three quarters of those students attended schools run by EMOs that the researchers termed as "large"—those that manage 10 or more schools. So what's the largest of those management chains? That would still be EdisonLearning of New York City. Although the chain has seen the number of schools it manages dip for the second year in a row, it still claims 62 public schools in its management portfolio.

In terms of the number of students served, though, the Herndon, Va.-based K12 Inc. is nipping at Edison's heels. At 37,543, total enrollment in the 24 virtual schools that K12 operates nearly matched that of Edison.

Keep in mind, too, that these numbers don't include private schools or the large number of charter schools that are managed by non-profit entities.

For me, though, the burning question is what's behind the apparent slow down, if that indeed is what is happening. Tougher start-up standards? Poor profit outlooks? Competition from nonprofits? Or political resistance? The authors don't say.

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