Federal Law Spurs Private Companies to Market Tutoring

By Karla Scoon Reid — December 07, 2004 9 min read

For-profit education companies are ramping up their businesses to tap into millions of federal dollars set aside to provide tutoring for students attending struggling schools.

But some observers are concerned about inadequate monitoring and evaluation of the more than 1,500 providers of tutoring services that have been approved by the states.

Under the federal No Child Left Behind Act, Title I schools that fail to reach state achievement goals three years in a row are required to offer free tutoring to students from low-income families. The “supplemental educational services” program is entering its second, or in some cases third, year in many districts.

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Table: Stepping Into the Market

With an estimated $2 billion potentially earmarked for tutoring nationwide, what traditionally has been considered a cottage industry is being reinvented.

Gene V. Wade Jr.

“The largest segment of tutoring was created overnight,” said Gene V. Wade, the chairman and chief executive officer of Platform Learning, a New York City-based company founded in response to the 3-year-old law’s tutoring mandate. “It’s a big business opportunity.”

With public money comes public scrutiny. The law requires that states review tutoring providers after two years, but a recent survey found that few states had done those analyses.

Meanwhile, the special commissioner of investigations for the New York City schools is conducting a probe into all of the tutoring providers operating in the nation’s largest school district.

A spokeswoman for Richard J. Condon, who works independently of the 1.1 million-student district, declined to provide details, but said the findings would be released next month.

“[The states] better put something in place pretty fast,” said Jack Jennings, the director of the Center on Education Policy, a Washington-based nonprofit group that is following the federal law’s implementation. “Millions of dollars are being spent and nobody knows what’s happening.”

‘Dollars Flying’

Executives with for-profit companies say they’re eager to have their programs independently reviewed. They acknowledge that the validity of their own data would be questioned.

Steve Quattrociocchi

“Right now, dollars are flying out on the basis of good marketing relationships with a pastor or a plugged-in schoolteacher,” said Steve Quattrociocchi, the executive vice president of the Princeton Review, a New York City-based test-preparation company that offers tutoring under the federal law. “It’s a huge experiment among a lot of people who want to help kids. This is not like a get-rich-quick scheme. No provider is making a killing here.”

The No Child Left Behind Act’s supplemental-services provision could double the private tutoring market in the United States, according to J. Mark Jackson, a senior analyst for Eduventures Inc., a research firm in Boston that tracks education businesses.

Excluding the test-preparation industry, Mr. Jackson estimates that private tutoring generates about $2 billion in annual revenue.

A review of state-approved tutoring providers found that more than 1,500 companies and nonprofit organizations, such as the YMCA, had stepped forward. But the numbers vary widely by state, from a high of 216 in New York to three in Hawaii, according to the list compiled by the Supplemental Educational Services Quality Center at the American Institutes for Research, a private organization in Washington.

State education agencies each draw up a list of approved tutoring providers—which also can include school districts that meet state achievement goals—through an application process. Individual districts then negotiate contracts with providers of their choosing and notify parents about programs available to their children. The parents select a tutoring provider of their choice.

To pay for the services, districts use part of the 20 percent of their Title I budgets that they are required to set aside for supplemental educational services and the school choice provisions of the federal law. Title I is the main federal program of compensatory educational aid for disadvantaged students.

To address the questions posed by the rapidly expanding tutoring market for public school students, nine companies formed a supplemental-educational-services “working group” of the Education Industry Association in August. The Washington-based association, which represents for-profit education companies, estimates some 500,000 students will be tutored this school year under the federal law.

The tutoring group, which now has 12 members, holds conference calls to exchange information about school districts and discuss strategies, said Steve Pines, the association’s executive director. The coalition also adopted a voluntary code of ethics and standards for business conduct, he said.

Some industry observers suspect that the New York City investigation involves companies that offer incentives—including computers and bicycles—to parents for enrolling their children in tutoring programs.

The company executives interviewed said they do not offer enrollment incentives, but do reward students for good attendance with items such as pencils and prom tickets.

Mr. Pines said he cautions his association members that doing business with public schools isn’t for everybody.

Despite the potentially lucrative market, he said, “it’s not like opening up the doors and saying: ‘Dinner time!’ There’s a new level of scrutiny that comes with being a partner with public education.”

Enrollment Jumps

Many of the nation’s leading for-profit education companies are willing to take that risk, although some have delved more slowly into the supplemental-services market than others.

Catapult Learning, formerly Sylvan Education Solutions, saw its enrollment in tutoring programs under the No Child Left Behind law quintuple from about 5,000 students in 2002-03 to 25,000 students in 2003-04. The Baltimore-based company, whose corporate parent is Educate Inc., is projecting further significant enrollment growth this school year.

Platform Learning, founded in 2002, has more than quadrupled its No Child Left Behind Act supplemental-services business, from 12,000 students in 2003-04 to an estimated 50,000 this school year.

Huntington Learning Centers started providing services under the law with 1,000 students in 2002-03. Although the company is an approved provider in 33 states, Huntington expects to tutor only some 10,000 students this school year.

“Initially, we were very cautious in our growth,” said Russell Miller, the vice president of business development for Huntington, based in Oradell, N.J. “We don’t want to experiment on children’s behalf.”

Several of the executives interviewed stressed that although supplemental services under the No Child Left Behind law may be a fast-growing segment of their business, it is not, nor will it become in the near future, their core business.

Jeffrey H. Cohen, the president of Catapult Learning, said that while supplemental services represents about 15 percent of the company’s business, he sees the program primarily as an opportunity to build lasting relationships with more school districts. “We would prefer to work in a preventative model and keep schools off the list” of those needing to offer such services, he said.

Despite such sentiments, tension has grown between tutoring providers and some districts.

School administrators often boast that tutoring programs provided directly by the district can serve more children for less money. But that is mostly because their class sizes are higher.

Several executives of profitmaking companies questioned the effectiveness of some district-run programs. Mr. Miller of Huntington Learning Centers said: “We’re not trying to take over the classroom. I think [school districts] should leave supplemental services to the supplemental-service professionals.”

While districts often note that many tutoring companies hire public school teachers, the providers stress that they train educators in their own tutoring methods. They often emphasize that pupil-teacher ratios are higher in district-run tutoring programs. In Chicago, for example, the teacher ratio is about 15 students for each teacher. The district estimates that its tutoring program costs $400 a student.

The for-profit companies interviewed cited goals for pupil-teacher ratios ranging from 10-to-1 to 6-to-1, at a cost of $1,000 a student to more than $2,000 a student. Some firms offer one-on-one academic help.

To Mr. Wade of Platform Learning, the definition of tutoring is small-group instruction: “It doesn’t say 15 students in a room.”

Joel Rose, the executive director of supplemental educational services for Newton Learning, a division of Edison Schools Inc. in New York, said the amount of Title I money set aside for tutoring by a district often can dictate the pupil-teacher ratios and length of the program.

Most for-profit companies require training for their tutors, and some mandate ongoing professional development. “It’s more expensive than getting workbooks and saying, ‘Go get them,’ ” Mr. Rose said.

Evaluations Lag

Determining the effectiveness of tutoring programs continues to pose a challenge for most states, however.

A survey conducted late this past summer by the Association of Community Organizations for Reform Now, or ACORN, and the American Institute for Social Justice found that some states were relying on tutoring providers’ own tests, measuring students’ scores before and after tutoring, to evaluate the quality of supplemental-services programs. Other states had yet to begin a review of their tutoring providers.

Liz Wolff, the national research director for ACORN, a New York City-based advocacy group for low- and moderate-income families, said private companies aren’t being required to show progress on the state tests that “everybody else is indicted by.”

Steve Fleischman, the director of the Supplemental Educational Services Quality Center and a principal research scientist at the AIR, said he believes that because districts are actually tutoring more students than outside providers are, they should both be held to a common performance standard.

The center plans to issue a policy brief this month outlining what factors state education agencies should consider to create a rigorous evaluation of tutoring.

Ayeola Fortune, the project director for extended-learning opportunities for the Council of Chief State School Officers, based in Washington, said many state education agencies lack the capacity and money to develop a monitoring process for tutoring.

The council will request funding from the U.S. Department of Education again next year to produce a common evaluation system that states could adapt. Without a model, she said, tutoring providers could face 50 evaluation systems. “Companies that provide services across state lines could be knocked off a list here and not there,” she added.

Louisiana is one state that is making progress on its tutoring evaluation. The state is using student test scores from state assessments to monitor the quality of individual supplemental-services providers. Those providers also are required to enter information on academic progress and attendance into the state’s data system on a daily basis.

The state has dedicated a full-time staff member to conduct site visits to see each of the 26 providers approved by the state in action. An outside researcher will attempt to rate the effectiveness of each tutoring provider by next spring.

Seppy Basili, the vice president of Kaplan Educational Services in New York, acknowledged that it would be difficult to isolate the academic effects of tutoring programs. But he said programs that can maintain good student attendance—which already has emerged as a challenge in some areas—should see gains.

Mr. Quattrociocchi of the Princeton Review added: “In this current Wild West environment of tutoring programs, it benefits everybody to evaluate what works and what doesn’t.”


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