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For-Profit Firms Fall Short under Federal Education Law

Barely half of schools run by Education Management Organizations meet Adequate Yearly Progress requirement

Contact: Gary Miron, (269)-599-7965; gary.miron@wmich.edu
William Mathis, NEPC, (802) 383-0058; William.Mathis@colorado.edu

BOULDER, CO and KALAMAZOO, MI (December 9, 2010) – Almost half of the public schools run by for-profit education management companies have not made adequate yearly progress (AYP) under the federal No Child Left Behind Law, according to the 12th annual Profiles of For-Profit Education Management Organizations: 2009-2010, by Alex Molnar of Arizona State University and Gary Miron and Jessica Urschel of Western Michigan University. The report found that large EMOs and so-called “virtual school” EMOs performed especially poorly.

The annual Profiles report, published by the National Education Policy Center, housed at the University of Colorado at Boulder, in collaboration with the Study Group on Education Management Organizations, based at Western Michigan University, tracks trends in the for-profit education management industry. Education Management Organizations (EMOs) are private firms that manage charter schools or conventional public schools under contracts, either with charter holders or with public school districts. The EMO industry emerged in the 1990s as part of an effort to utilize market forces to reform public education.

The annual Profiles report is intended for a broad audience that includes policymakers, educators, school district officials, and school board members as well as investors, EMO employees or education industry participants. It provides a one-of-a-kind, comprehensive overview of the for-profit education management industry. The 2009-2010 Profiles report marks the first-ever examination of how well EMO-run schools are faring in meeting the requirements for AYP contained in the federal No Child Left Behind law.

Overall, the profiles report finds that 53 percent of schools managed by for-profit EMOs made AYP in 2009-10, while 47 percent did not. Among schools managed by the largest EMOs (those managing 10 or more schools), just 49.5 percent made AYP. The schools managed by medium-sized EMOs (managing 4 to 9 schools) fared a little better, with 54.3 percent making AYP.

The best record was produced by the smallest EMOs, those managing 3 or fewer schools; in that category, 70.8 percent made AYP. On-line, or virtual, schools run by EMOs performed the worst, with only 30 percent making AYP. Of course, the same cautions that should be applied to neighborhood schools should be applied here: Those EMOs managing schools that target more disadvantaged populations are more likely to not make adequate yearly progress, while EMOs whose schools have college prep profiles or serve few disadvantaged students have a much better chance of making AYP. Also, AYP hurdles vary from state to state.

Large EMOs continue to account for the majority of schools (67.5 percent) and the majority of students enrolled (73.7 percent).

Additional findings include:

  • A total of 98 for-profit EMOs operate in 31 states.
  • The five states with the highest numbers of schools managed by for-profit EMOs are Michigan (185), Florida (145), Arizona (99), Ohio (92), and Pennsylvania (40). The order of these top five states remains unchanged from 2008-2009.
  • More than 93% of EMO-managed schools are charter schools, and fewer than 7% are district schools.
  • The majority (56.5%) of EMO-managed schools listed are primary schools.
  • The number of students in profiled EMO-managed schools increased by 13,848 in the last year. This represents a 4.1% increase in students.
  • In total, the EMO-operated schools profiled in this report enrolled 353,070 students during the 2009-2010 school year.

Find Profiles of For-Profit Education Management Organizations: 2009-2010, by Alex Molnar, Gary Miron, and Jessica L. Urschel, on the web at:
http://nepc.colorado.edu/publication/EMO-FP-09-10

Watch for the release of the NEPC report on non-profit EMOs on December 15th.

The mission of the National Education Policy Center is to produce and disseminate high-quality, peer-reviewed research to inform education policy discussions. We are guided by the belief that the democratic governance of public education is strengthened when policies are based on sound evidence. For more information on NEPC, please visit http://nepc.colorado.edu/.

Learn more about the Study Group on Education Management Organizations, based at Western Michigan University, by visiting its Web site. http://www.wmich.edu/leadership/emo/.