<<  <  >  >>

A customer-dri-

them. Charter schools are generally free

government. In fact, there have been several

from some of the regulations that public

instances in which charters have been

ven educational

schools typically face; however, they still are

repealed when schools have failed to live up

system would

to their promises.5 3

limited as to the methods of student selec-

weed out substan-

tion, and they must consider the possibility

Certainly, school boards' shutting down

that such regulations could increase.4 7 For

failing charter schools is a marked improve-

dard schools

ment. For too long, government has

those reasons, many for-profit schools have

more rapidly than

responded to failing schools by propping

yet to turn a profit. Edison Schools, for

them up with more money. However, policy-

instance, lost $49.4 million in the fiscal year

does the current

makers and the public should consider who

that ended on June 30, 1999, and expects to

system.

incur losses in the future.4 8

should be in the position of determining

whether or not a school is a "failure." School

Another for-profit school management

boards may have conflicting loyalties: A

company, TesseracT Group, Inc., which oper-

hypothetical example is a charter school that

ates approximately 38 charter schools,

hires predominantly nonunion employees.

preschools, and private schools, is also strug-

gling financially.49 TesseracT schools aim to

The school board is likely to feel pressure to

eliminate such a school. In contrast, when

provide students with a personalized educa-

parents are in control, the successful educa-

tional experience, low teacher-to-student

ratios, and a rigorous academic curriculum.50

tion and safety of the students are likely to

be the foremost consideration. A free and

However, TesseracT has suffered financial

competitive market is the most effective and

losses of $14 million in two years, resulting in

efficient way to make schools accountable

the company's being removed from the

NASDAQ.5 1 As of March 2000, TesseracT was

and to determine the success or failure of a

contemplating a 10 percent tuition increase.5 2

school.

The experience of for-profit school man-

Although it is beyond the scope of this

agement companies suggests that a fully

paper to fully dissect the root of any compa-

competitive education marketplace would

ny's financial difficulties, some discussion is

differ from the current system in several

in order. Critics of for-profit education may

important ways:

view TesseracT's problems as evidence that

education is unprofitable and best left in

· Edupreneurs would likely open schools

the hands of government, but this company's

experience provides a number of alternative

with a wide variety of curriculums,

conclusions. It is possible that TesseracT

instructional methods, and education

offers a quality product but is having diffi-

philosophies in an effort to serve and

culty competing against schools that

satisfy a diverse customer base. This

receive government funds for their facilities

stands in marked contrast to the gov-

and pay no taxes; the playing field is

ernment system in which schools have

uneven.

little ability or incentive to specialize,

It is also possible that TesseracT's

diversify, or cater to the different

schools are not living up to their promises.

demands of parents.

· For-profit schools would give parents

If that is the case, it is evidence of the

important role the market plays in ensur-

more opportunities than does the cur-

ing quality. If parents are dissatisfied with a

rent government system to choose

school's product, then they may remove

schools with academic standards and

their child and the company loses the fund-

values that reflect their priorities.

· A customer-driven educational sys-

ing associated with that child. Therefore,

schools that do not provide adequate ser-

tem would weed out substandard

vice will fail. Likewise, charter schools that

schools more rapidly than does the

fail may have their charters revoked by the

current system.

8