Caution on For-Profit Schools
(Last of a three-part series this week on innovative schools.)
At the same time that for-profit colleges are campaigning hard to justify their existence in the face of harsh criticism from Congress, for-profit schools are in increasing demand from desperate parents. Since I've already weighed in on for-profit colleges ("Are Proprietary Colleges Worthwhile?", July 2), I'll confine my remarks to for-profit schools.
New York City is the epicenter of the for-profit trend. Long known for its list of expensive non-profit independent schools in grades K-12, New York City is feeling the presence of these newcomers. The New York Times focused on the British International School as an example ("The Face of Private-School Growth, Familiar-Looking but Profit-Making," Sept. 21).
One of the reasons for their appeal is the disconnect between supply and demand. The top dozen non-profit schools in Manhattan have only 11,000 seats. But as annual income above $500,000 soared to 15,700 households in one posh area of Manhattan alone in 2010 from 4,300 a decade ago, parents are willing and able to spend whatever it takes to get their children into coveted schools.
For-profit schools are seen as an indispensable backup because of the fierce competition for admission to the non-profit schools that have been around for decades. That's enough to appeal to entrepreneurs, who are more interested in the money they can make from their operation and eventual sale than they are in providing a quality education.
Yet if the experience of Edison Schools is any indication, the hope may be a mirage. In 1991, Christopher Whittle convinced investors that he would open 1,000 schools by 2010, and make a profit in the process. But he soon learned that economies of scale do not apply to education. Renovating schools, purchasing equipment and hiring staff remain costly no matter how often the process is repeated. In 2008, Whittle finally threw in the towel. His original company is now a player in educaton software. Nevertheless, Whittle is back, working to open the for-profit Avenues: the World School next year.
Whether for-profit schools will catch on to become McSchools is a gamble. But when parents are determined to avoid public schools that they feel are substandard, they will find business-minded operators more than willing to take their money. Caveat emptor.