Corporations Capitalize on For-Profit Education

TEMPE, Ariz.- The 2002-2003 Profiles of For-Profit
Education Management Companies released today by Arizona
State University's Education Policy Studies Laboratory finds
that large education management organizations (EMOs)
dominate the industry.

The report also documents a strong shift toward the
for-profit management of charter schools. Of 417 for-profit
schools listed in the directory, 320 (77 percent) were
identified as charter schools.

Large EMOs (operating 10 or more schools) accounted
for approximately 78 percent of EMO-managed schools and
88 percent of enrolled students. In contrast, although
small- (3 or fewer schools) and medium-size (4 to 9 schools)
EMOs together made up 79 percent of all profiled EMOs,
they account for only 22 percent of the schools and 12
percent of the students enrolled infor-profit schools.

Large EMOs averaged 512 students per school,
medium-sized EMOs averaged 283 students, while small
EMOs averaged 220 students per school. All of the schools
in the medium and small EMO categories were charter schools,
while 70 percent of schools in the large category were
charter schools.

Many Arizona Charter Schools Run For Profit

States such as Arizona and Michigan with the
most-permissive charter school laws tend to have the most
schools managed by for-profit companies. The authors
found Arizona and Michigan account for nearly half of
all schools managed or operated by EMOs. While nationally
about 12 percent of all charter schools are managed by
for-profit EMOs, an estimated 19 percent of Arizona's
charter schools are operated by EMOs.

The fifth annual Profiles of For-Profit Education
Management Companies is the most comprehensive resource
on the for-profit education management industry.
The report found that 47 management companies operate
in 24 states and the District of Columbia, enrolling some
190,000 students. An overwhelming majority
of those schools are public charter schools.

EMO Management Is Controversial

According to EPSL director Alex Molnar, "Publicly
funded schools run by education management companies on
a for-profit basis are a controversial innovation intended
to improve schools through the profit-seeking motive of the
marketplace. However, profitability continues to be an
elusive goal for many EMOs. The consensus view of investors,
researchers, and others is that the evidence thus far is
insufficient to demonstrate that the quality of education is
improved or that private management companies can
profitably manage schools."

The annual directory includes information about
companies contracted by school districts to manage
existing traditional public schools, companies that
manage public charter schools, and companies that do
both. The researchers compiled the data from company
survey responses, company websites, state department
of education websites, newspaper articles, company
press releases, government publications, and other
sources.

The Commercialism in Education Research Unit (CERU)
conducts research, disseminates information, and helps
facilitate a dialogue between the education
community, policy makers, and the public at large
about commercial activities in schools. CERU is the
only national academic research center dedicated to
schoolhouse commercialism.

Visit the CERU website at http://schoolcommercialism.org/

The Education Policy Studies Laboratory (EPSL) at
Arizona State University offers high quality analyses
of national education policy issues and provides an
analytical resource for educators, journalists, and
citizens. It includes the Commercialism in Education
Research Unit (CERU), the Education Policy Analysis
Archives (EPAA), the Education Policy Reports Project
(EPRP), the Education Policy Research Unit (EPRU),
and the Language Policy Research Unit (LPRU). The
EPSL is directed by ASU Professor Alex Molnar.

Visit the EPSL website at http://edpolicylab.org

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