Many education stakeholders have voiced concerns that for-profit education providers are more interested in making money than in serving students. As AEI's Rick Hess pointed out at an AEI Google+ Hangout this Wednesday, some of this suspicion and skepticism is well deserved. For-profit providers are not always virtuous, admitted Michael Horn of the Clayton Christensen Institute, but this is also true of numerous nonprofit and public providers. Digital Learning Now's John Bailey argued that there are profit-seeking motives among nonprofit and public institutions, pointing to Harvard University's endowment, which currently exceeds $30 billion, as an example.
Panelists largely agreed that today's policies do not incentivize the right things in K–12 or higher education. Current rules and regulations limit opportunities for for-profit providers, excluding them from competitive grant programs and creating additional barriers to market entry. But AEI’s Andrew Kelly was optimistic that we can create policy solutions that would help change the incentives without excluding the entire private sector. He noted that the private sector has been recognized for delivering education to traditionally underserved students, readily attracting capital and talent and scaling more rapidly than many nonprofits.
Horn concluded that while for profits do have weaknesses, education -- an industry currently dominated by nonprofits -- does not work that well. He encouraged policymakers to overcome the for-profit and nonprofit divide and to focus on how they can best serve students.
--Lauren Blair Aronson
Can an institution be for profit and for students? In education, for-profits have long been regarded as an evil imposition. But at a time when the educational status quo is defined by tight budgets, disappointing outcomes, high remediation rates, and rising expectations, it would serve the American education system well to relax the reflexive criticism of for-profits and to instead ask whether, when, and how for-profit providers can promote quality and cost-effectiveness to better serve more students.
Tune in for a Google Hangout discussion about how policymakers can create an environment where the power of for-profit innovation and investment is leveraged to better serve students.
If you do not have a Google+ account, we invite you to watch the livestream on this page on July 24 at 2:00 PM ET.
For more information, please contact Lauren Aronson at firstname.lastname@example.org, 202.862.5904
For media inquiries, please contact media services at MediaServices@aei.org, 202.862.5829.
John Bailey serves as the executive director of Digital Learning Now. He also cofounded Whiteboard Advisors, which provides strategic consulting for investors, philanthropies, and entrepreneurs. Bailey previously served at the White House as special assistant to the president for domestic policy during the George W. Bush administration, where he coordinated education and labor policy. He has also worked at the Bill and Melinda Gates Foundation, as well as serving as a top technology and innovation adviser to the US secretary of commerce. He also served as the nation’s second director of educational technology, where he oversaw more than $1 billion in annual grants and research projects. He has served as a formal or informal adviser to three presidential campaigns.
Frederick M. Hess is resident scholar and director of education policy studies at AEI. An educator, political scientist, and author, Hess studies a range of K–12 and higher education issues. He pens the Education Week blog Rick Hess Straight Up and has authored influential books on education including “The Same Thing Over and Over” (Harvard University Press, 2010), “Education Unbound” (ASCD, 2010), “Common Sense School Reform” (Palgrave Macmillan, 2006), “Revolution at the Margins” (Brookings Institution Press, 2002), and “Spinning Wheels” (Brookings Institution Press, 1998). He has edited widely cited volumes on education philanthropy, urban school reform, how to stretch the school dollar, education entrepreneurship, what we have learned about the federal role in education reform, and No Child Left Behind. He also serves as executive editor of Education Next; as lead faculty member for the Rice Education Entrepreneurship Program; on the Review Board for the Broad Prize in Urban Education; and on the boards of directors of the National Association of Charter School Authorizers, 4.0 Schools, and the American Board for the Certification of Teaching Excellence. A former high-school social studies teacher, Hess has taught at the University of Virginia, the University of Pennsylvania, Georgetown University, Rice University, and Harvard University.
Michael B. Horn is a cofounder of the Clayton Christensen Institute and serves as the executive director of its education program. He leads a team that educates policymakers and community leaders on the power of disruptive innovation in the K–12 and higher education spheres. His team aims to transform monolithic, factory-model education systems into student-centric designs that educate every student successfully and enable each to realize his or her fullest potential. In 2008, Horn coauthored the award-winning “Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns” (McGraw-Hill) with Harvard Business School Professor Clayton M. Christensen and Curtis W. Johnson. Newsweek cited the book 14th on its list of “Fifty Books for Our Times.” He has also written articles for numerous publications including Forbes, The Washington Post, The Economist, Huffington Post, and Education Week. He testifies regularly at state legislative sessions and is a frequent keynote speaker at education conferences and planning sessions around the US. Horn was listed on Tech Learning magazine’s list of the 100 most important people in the creation and advancement of the use of technology in education.
Andrew P. Kelly is a resident scholar in education policy studies at AEI. His research focuses on higher education policy, innovation, financial aid reform, and the politics of education policy. Previously, he was a research assistant at AEI, where his work focused on the preparation of school leaders, collective bargaining in public schools, and the politics of education. His research has appeared in the American Journal of Education, Teachers College Record, Educational Policy, Policy Studies Journal, and Education Next, as well as popular outlets such as Education Week, Inside Higher Education, Forbes, The Atlantic, National Affairs, The Weekly Standard, and Huffington Post. He is coeditor of “Getting to Graduation: The Completion Agenda in Higher Education” (Johns Hopkins University Press, 2012), “Carrots, Sticks, and the Bully Pulpit: Lessons from A Half-Century of Federal Efforts to Improve America's Schools” (Harvard Educational Publishing Group, 2012), and “Reinventing Higher Education: The Promise of Innovation” (Harvard Educational Publishing Group, 2011). In 2011, Kelly was named one of 16 "Next Generation Leaders" in education policy by the Policy Notebook blog on Education Week.
Frederick M. Hess and Michael B. Horn: Private Enterprise and Public Education