For-profit universities have come under fire for a litany of reasons. Critics claim that graduates of for-profit colleges are less likely to be employed, have high student debt, are more likely to default on federal loans and don’t receive a quality education. Congress passed legislation last summer to provide more oversight of for-profit colleges and the federal grants that often fund student tuition, and just today, and the number of colleges are diminishing.
As the for-profit university debate rages on, there's another, highly volatile controversy around for-profit companies providing curriculum, content, and other services to school. In a recent article by Reuters News Service, educator and activist Diane Ravitch rang the alarm bells.
"This is a new frontier," Ravitch said. "The private equity guys and the hedge fund guys are circling public education." Some of the products and services offered by private vendors may well be good for kids and schools, Ravitch said. But she has no confidence in their overall quality because "the bottom line is that they're seeking profit first."
In the fringes of that debate, there has been little discussion of the handful of for-profit companies running K-12 schools, most often as charters. A recent forum hosted by the Center on Education Reform discussed the issue, focusing mostly on the positive effects that profit-seeking institutions could have on K-12 education. One company highlighted in the forum was Sabis, a family-owned business based in the Middle East, which operates tuition-free charter schools as well as tuition private schools, all over the world, including the U.S.
For-profit schools in the K-12 space are not run as outright businesses. Rather, Sabis is an “education management organization,” a designation that allows the company to bid for the right to manage charter schools. They have schools in Minnesota, Michigan, Massachusetts, New York and Louisiana. The principal argument against this model is that a company might cut corners to ensure profit levels, sacrificing quality of education. What's more, a private company allows little scrutiny into administrative practices by teacher unions, school boards and parents. The premise behind traditional public schools is that those stakeholders provide valuable checks on school administrators.