School Choice & Charters Explainer

Privatization of Public Education

By Education Week Staff — October 05, 2004 2 min read
  • Save to favorites
  • Print

Editor’s Note: For more recent information on the privatization of public education, please read our explainers: School Choice, Explained (Video) (2016), What Are School Vouchers and How Do They Work? (2017), and Education Savings Accounts, Explained (2023).

Turning the operation of public schools over to private companies is a controversial idea based on the less-controversial notion that part of what makes improving public schools so hard is that they are bogged down in bureaucratic mire.

Advocates of privatization ventures see in them the combined virtues of government and business. They argue that government’s oversight function and its responsiveness to the needs of citizens can be retained while taking advantage of private enterprise’s ability to be more efficient, reduce costs, and maximize production—in this case, student achievement.

Opponents, however, see the pressure for profit replacing student achievement as the driving force within schools. They see individual needs—particularly those of children with special, costly requirements—being sacrificed to the needs of corporate shareholders. They fear that school districts won’t be nearly vigilant enough in monitoring companies’ performance. And, foes note, private managers can be as inefficient and incompetent as public ones.

In what some call the “second wave” of the charter school movement, for-profit management companies have taken over the operation of charter schools. According to EduVentures, a Boston consulting firm that has tracked the rise of the education industry, roughly 10 percent of the estimated 1,200 charter schools in 1999 were managed by for-profit companies. One successful private manager of charter schools is the Tesseract Group Inc., formerly Education Alternatives Inc. Private companies’ entry into the charter school arena raises tough questions: Should taxpayer dollars intended for schools be permitted to generate a private profit, even if the company produces positive student results? Does the involvement of private companies defy the traditionally grassroots nature of charter schools? The education research community, too, is taking note of the increased private focus on public education. Henry Levin, a noted education researcher and economist, moved in April 1999 from Stanford University to Columbia University, where he will direct the new National Center for the Study of Privatization in Education. Mr. Levin hopes to conduct neutral research, without any political pull from conservatives or liberals, on the impact of privatization to advance the debate about vouchers, charter schools, and private companies in education.

Private efforts to run public schools—launched with great fanfare—risk losing a lot of steam once they get down to the dirty work of running schools. But despite private contractors’ problems, the emergence of education as an industry continues. EduVentures estimates that for-profit education companies had revenues of $82 billion in 1998, a 25 percent increase over 1997. Revenues are projected to reach $99 billion in 1999 and $123 billion in 2000. Merrill Lynch & Co. has a slightly more conservative outlook. It estimates the industry took in $70 billion in 1998 and should reach $100 billion by 2001.

How to Cite This Article
Education Week Staff. (2004, October 5). Privatization of Public Education. Education Week. Retrieved Month Day, Year from https://www.edweek.org/policy-politics/privatization-of-public-educaiton/2004/10

Events

Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

School Choice & Charters Private School Choice Faces New Challenges as State Lawsuits Pile Up
The lawsuits target new, broader state programs that allow parents to use public money for private school expenses.
6 min read
Photo of collage of gavel and school building.
F. Sheehan for Education Week / Getty
School Choice & Charters Opinion Can a Network of Tiny, Teacher-Led Montessoris Spread Like Wildflowers?
Do the strengths of this school network hold lessons for traditional public schools?
5 min read
Image shows a multi-tailed arrow hitting the bullseye of a target.
DigitalVision Vectors/Getty
School Choice & Charters Families Lament, Public School Advocates Celebrate End of Controversial Scholarship Tax Credit
The Illinois program prompted fierce debate over the merits of what some equate to a politically volatile school choice voucher program.
Jeremy Gorner, Dan Petrella, and Alysa Guffey, Chicago Tribune
8 min read
Karl, age 5, stands with his dad, Patrick Bittorf, on Nov. 10, 2023, as they join faculty members, students, parents and supporters at a news conference at Chicago Hope Academy to try to save the Invest in Kids tax credit scholarship program.
Karl, age 5, stands with his dad, Patrick Bittorf, on Nov. 10, 2023, as they join faculty members, students, parents, and supporters at a news conference at Chicago Hope Academy to try to save the Invest in Kids tax credit scholarship program.
Antonio Perez/Chicago Tribune via TNS
School Choice & Charters Charter Schools' Building Struggles Highlight Lingering Tensions With Local Districts
Charter leaders say they spend an outsized portion of their budgets on fixing buildings.
7 min read
Image of a blueprint and a dollar symbol.
iStock/Getty