Reading, Writing, and Revenue

From New York to San Francisco, Edison Schools Inc. has been selling the idea that for-profit management companies can do a better job of teaching kids than public-school districts. But a growing number of educators say the reality doesn't match the hype.

On a weeknight in early February, the front line in the battle to privatize America's public schools reached the top floor of a five-story walk-up in Flatbush, Brooklyn. Marie Jeanty, an immigrant from Haiti, had just come home from her job at a Manhattan hotel. She was preparing dinner for her 11-year-old son, Marc Antoine, when the bell rang. Jeanty opened the door, and a smartly dressed man introduced himself as a representative of Edison Schools Inc., the nation's largest company in the business of managing public schools.

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The salesman explained that Edison needed Jeanty's support. The parents at Marc Antoine's middle school, M.S. 246, one of New York's worst-performing schools, were going to vote the following month on whether to turn over its operation to Edison. The salesman wanted Jeanty to vote yes. He handed her a glossy brochure filled with color pictures of happy students in Edison schools around the country. Jeanty understood that if Edison won the vote, Marc Antoine would get a new home computer to use free of charge.

When the salesman left, Jeanty was undecided. "I am not offended that he offered me a computer," she says in her native Creole. "I need one for my son, but I cannot afford it.

"I know it is not really free," she adds. "In this country, they say, nothing is free."

Door-to-door canvassing, eye-catching handouts, and promises of computers and a better education have been hallmarks of Edison's campaign to increase the number of public schools it operates. Founded with great fanfare nine years ago by Chris Whittle, a maverick entrepreneur who brought TV news mixed with paid advertising into schools nationwide, Edison aims to prove that corporate management and a back-to-the-basics curriculum can revolutionize public education. Its pitch, whether made in a Flatbush apartment or the office of a school superintendent in Kansas, is tantalizing indeed: Schools managed by Edison, the company promises, will have high-tech classrooms, motivated teachers, and dramatically improved student test scores -- all at no extra cost to taxpayers. Over the past five years that idea has won Edison contracts to run more than 100 schools in 21 states and the District of Columbia. With 57,000 students, its system rivals school districts like Cincinnati and Atlanta.

If Edison's pitch sounds too good to be true, a growing number of researchers and educators say, that's because it is. Headlines in New York and elsewhere have focused on the philosophical debate over whether private companies have any business running public schools. But research reports, school-district documents, and interviews with administrators show that Edison faces a criticism based on more pragmatic concerns -- that it simply hasn't delivered. Over the past six months, two major studies have found that students in the company's schools typi-cally do no better, and sometimes do worse, than those in comparable district-run schools. Edison has also been dogged by high teacher turnover and complaints that it fails to serve special-education students adequately. And in several districts, Edison schools have come under fire for receiving a disproportionate share of public funds; at least two districts, including San Francisco, have moved to terminate what they consider excessively costly contracts with the company.

"When I go to a car lot, I know the guy is going to exaggerate what he says about a car," says Phillip Garrett, the former assistant superintendent in Sherman, Texas, where Edison ran four schools before pulling out of its contract in late 1999. "These guys were doing it with schools. It wasn't dishonest. But it was a sales pitch, a high-pressure, slick sales pitch."

To be sure, Edison has plenty of allies. President George W. Bush asked one of the company's executives, former New York congressman Floyd Flake, to head the federal Department of Education. (Flake declined; he continues to work as president of Edison's charter-school division.) Administrators, parents, even teachers' unions have invited Edison to open dozens of additional schools around the country, and until the Nasdaq's recent meltdown, the company's stock was an investor favorite.

Edison's backers say the critics are misreading its test scores, overestimating the cost of its contracts, and overreacting to the initial difficulties that plague schools in transition. Whittle himself gushes optimism: In 20 years, he told John McLaughlin during a "One on One" appearance last year, his company could control 10 percent of the nation's public schools.

A skilled marketeer and flamboyant speaker with a background in magazine publishing, Whittle conceived of the "Edison Project" in the early 1990s while he was operating his school-TV company, Channel One. A high-profile team of businesspeople and educators, including former Yale president Benno Schmidt, was assembled to drum up $2 billion in capital and build hundreds of private, for-profit schools. At the time, state governments around the nation appeared set to pass school-voucher laws that would allow parents to use public money for tuition at the schools of their choice. When one voucher scheme after another was shot down, however, Edison adjusted its strategy.

By 1995, Edison -- now rechristened Edison Schools Inc. -- was pitching a new concept to administrators and investors: Districts could hire the company to operate their schools, just as they had for years contracted with firms that provide textbooks, food service, and waste disposal. With privatization widely perceived as the way to trim unwieldy bureaucracies, Edison's approach found plenty of takers. The company began managing its first four schools in Texas, Kansas, Massachusetts, and Michigan in 1995; today it operates 113 schools and one entire district.

Last December, Edison announced a plan to create nine new charter schools in Miami in cooperation with the local chapter of the American Federation of Teachers, the nation's second-largest teachers' union. A week later, the largest teachers' union, the National Education Association, submitted a joint proposal with Edison to take over 12 low-performing schools in Delaware County, Pennsylvania. Efforts are also under way to open new Edison schools in Tennessee, Louisiana, Nevada, and other states.

The big prize, however, is New York City, home to the country's media and financial elite and to a legendary, and much-maligned, public-school system that boasts 1.1 million students and a $9-billion budget. Winning a proposed contract to take over five schools in New York, observers say, would lend credibility to Edison's slogans. "If we do a great job in [New York], we believe there will be more schools headed our way," Whittle told the New York Times in January. "It's critical that we do something that is sustainable and replicable."

Edison is among a growing number of companies trying to snare part of the $324 billion spent on public K-12 education in America annually. In 1999, University of Wisconsin-Milwaukee professor Alex Molnar counted 13 for-profit "education management organizations" operating 135 schools in 15 states; by this February, the number had swelled to 21 companies managing 285 schools in 22 states.

Molnar, who has been a sharp critic of school commercialization, says the companies are taking advantage of several trends that have emerged in recent years: government pressure on schools to cooperate with business; increasing reliance on technology and standardized tests; and the widely held assumption that public schools have been showered with money and attention yet have failed.

"The fact that these for-profit firms are proliferating," Molnar cautions, "doesn't mean they are succeeding -- if, by success, you mean that the quality of public education has improved and become more equitable or that students are achieving at higher levels. For each of these, the answer is no. If your standard of success is based on the amount of money top management receives, the value of the executives' stock options, and the enormous overhead costs imposed on the organization by the head office, then Edison Schools Inc. looks pretty good."

 

At first glance, Dodge-Edison Elementary in Wichita, Kansas, would seem proof positive that Molnar's assessment is wrong. Here, bright-eyed kids in regulation polo shirts and khaki pants walk single file up and down hallways divided by yellow lines like state highways. Classroom walls are decorated with abcs, crayon drawings, maps, inspirational quotations, and pictures of whales and birds and presidents. Teachers bubble over with praise for the school even as they lament some of the challenges of turning around a school that until recently was considered among Wichita's most troubled.

Benno Schmidt, the chairman of Edison's board, has said that the company injects an average $1.5 million worth of teacher training, textbooks, capital improvements, and equipment into each school it takes over. The classrooms at Dodge are not Mission Control Houston, but they are equipped with telephones, television sets, computers, and Internet hookups. Parents and teachers communicate by email; homework assignments are posted on a Web site. Edison issues every teacher a laptop, and it loans a desktop computer to every family with a child in the third grade or higher. A few of its schools have state- of-the-art media rooms where students do computer-based assignments while a teacher monitors their work on a screen or displays it on an overhead projector.

One of these high-tech classrooms has been built across town from Dodge-Edison at Edison-Ingalls Academy, an elementary school housed in a mocha-colored brick building in a low-income, mostly African American neighborhood. "Edison levels the playing field for all kids," says Principal Stephanie Hollimon. "In other schools, affluent families have computers, and children from impoverished families don't. Here, everyone has a computer to do the assignments." Hollimon says the computers are one of two powerful selling points for Ingalls. The other is the increased time kids spend in the classroom. Edison's school day is one to two hours longer than the day at most conventional public schools, and the school year lasts four to six weeks longer than the national norm. Many of Ingalls' students come from single-parent homes and families where parents work long hours; the extended school day and year cut down on the need for child care and the amount of time latchkey kids spend alone.

Outside observers, too, have praised the atmosphere inside Edison's schools. Last year, a group of researchers from Columbia University's Teachers College reported that in examining six Edison schools in Colorado, California, and Michigan, they had found high teacher morale, enthusiasm for the curriculum, and satisfied parents. "Mature Edison schools are safe, clean, colorful and are animated by an almost zany energy," the report said. "Edison schools are not educational utopias, but the Edison design does provide a blueprint for the creation of cohesive and academically rigorous learning environments."

What the Columbia researchers did not study was whether Edison was fulfilling its two fundamental promises to districts: that it can do a better job educating kids in failing schools, and that it can do so for a fee equivalent to what the districts spend to operate the schools.

On the academic front, Edison's marketing materials say the company has racked up one success after the other. "The consistent and sizable gains Edison has been making nationwide are with the students whose achievement has traditionally been lacking," one brochure states, pointing out that about 55 percent of Edison's students are African American and 17 percent are Hispanic. "Students in nearly every Edison school are achieving more today than when the school opened," the company's Web site boasts. "In no Edison school are students achieving less."

Those assessments are based on standardized tests administered at Edison's schools; the company focuses on whether those scores improve after it takes over. But education researchers and school officials who have worked with Edison say the company's schools should be measured against other, comparable schools, not against their own past performance -- and in such comparisons Edison doesn't shine so brightly. In October, the American Federation of Teachers (AFT) released a study of Edison's achievement gains at 40 schools in eight states.

It showed that the company's students were scoring no higher, and in many cases lower, than their counterparts in district-run schools.

The AFT study compared gains made by Edison schools with those from other schools in the same districts that have similar student demographics. The results from Wichita are typical. The aft found that the math and reading trends in state assessment tests for Edison's four schools in Wichita were below those produced in comparable schools in 12 of 16 cases, above them in one case, and about equal in three cases.

"Edison claims to be a perfect 10 like Bo Derek, but it is really just like your plain old next-door neighbor," says the study's author, Howard Nelson, a former University of Illinois professor of educational administration who now works for the union. "This mixed record has not been evident to many observers of Edison schools for several reasons. The company's promotional materials, understandably, focus on the most favorable data."

In his windowed office overlooking a midtown Manhattan canyon, John Chubb, Edison's chief education officer and a former Stanford professor who co-authored one of the most influential studies ever done on market competition and public education, grows visibly irritated as he talks about the aft assessment. "They are a union, an interest group," he notes. In a press release, Chubb dismissed the study as a "political diatribe dressed up in the guise of science." (Teachers' unions have been wary of Edison, fearing that districts could use the company to undermine their bargaining power.)

"The aft wants to know how we're doing in relation to kids who are in similar schools," Chubb explains. "In the long run, I have no problem with that. But in the short run, a school should be evaluated by where it was when we started and where it is now."

In January, Chubb found a second disturbing report card in his email: a 339-page study by Western Michigan University researchers Gary Miron and Brooks Applegate. The report, which was funded in part by the National Education Association, analyzed the results of district, state, and national achievement tests from the first 10 schools Edison had opened. It found that test scores at many Edison schools had indeed risen, but so had those of comparable district-run schools -- and that the gains made by Edison students were no greater than those made by their counterparts in the traditional system.

The study used 99 "trends" to track student gains on achievement tests for reading, math, and other core subjects. When the gains at Edison schools were compared with those of traditional schools, Edison showed positive results in 15 of the trends, negative results in 23, and mixed results in 61. "Our findings suggest that Edison students do not perform as well as Edison claims in its annual reports on student performance," the report concluded.

Miron says he has attended meetings where Edison representatives have laid out the company's program to parents and school officials. "They came up with beautiful pie charts and bar charts that show that they're doing quite well," he says. "But there are holes in their statistics. Once I got up and said, 'You can't do these overheads and graphs and leave out key information.' They said, 'The parents wouldn't understand the complicated statistics that show Edison's case.' But the statistics aren't complicated, and they don't prove their case."

Edison's response to the Western Michigan study was quick and blistering. (In one email, a company official included the word libelous.) "Despite the mountains of statistics designed to give it an aura of legitimacy, the study is a political attack piece, pure and simple," said an Edison press release. "It is shocking that social scientists would attempt to pass off such work as an objective evaluation."

Henry Levin, a professor at Columbia's Teachers College and director of the National Center for the Study of Privatization in Education, says it's not unusual for researchers to clash over how to evaluate schools. Levin calls the Miron study "reasonable" in methodology and design; the findings, he says, "fall right within the boundaries of what has been found by other studies." Typically, he adds, researchers comparing privately managed with traditional public schools "have found slight advantages for the private alternatives, on average. [But] at this moment we have no evidence of dramatic improvements."

 

In his office overlooking the quadrangular sprawl of Wichita, Superintendent Winston Brooks says his district's own comparison between the test scores at Edison schools and those of district-run schools also showed less-than-spectacular results. "I do believe they're making improvement," Brooks says. "But I'm convinced that they're not making progress as quickly as our control group is. If that continues, at some point in time I've got to ask myself whether I can do it better. Right now the data look like I can do it better."

Just as important, Brooks adds, the district can do it without paying Edison what he considers a premium fee. The company is paid the average amount the district spends on each student for school operations. But, he adds, Edison's Wichita contract includes only grade schools and middle schools, the least expensive to run; as a result, the district now spends at least one-third more per student on the Edison schools than it does on its regular schools. "It's our own fault," he says. "We came up with the dollar figure. We haven't gotten it straightened out yet."

Brooks isn't the only school administrator complaining about the Edison program's cost. Officials in three other districts around the country say they have spent significantly more on Edison than they would have if the schools had remained district-run.

In San Francisco, extra costs are among the reasons why a newly elected majority of the school board is working to end Edison's contract. The company took over management of San Francisco's poorest-performing elementary school in 1998 after Gap founder Donald Fisher, whose son was among Edison's earliest investors, promised to donate $1.8 million to the endeavor. (Fisher also, according to news reports, helped fund an organization that paid $47,100 for campaign flyers supporting pro-Edison school board candidates in the 2000 election.)

The board's new president, Jill Wynns, says the district is losing money on Edison because the school system is absorbing the full costs of districtwide services like transportation, food service, and payroll processing that partially benefit the Edison school. "They have enjoyed the benefits of an uneven playing field," says Wynns. "They get a disproportionate share of public resources. We're going to make sure the playing field is leveled."

Financial woes also hit the Southwest Independent School District of San Antonio, Texas. A small, partially rural district with many middle-income Hispanic residents, Southwest announced in January that it will phase out its four Edison schools by the end of the 2001-02 academic year. School officials refused to discuss the details of the divorce; two school board members told Mother Jones they were afraid Edison would sue if they revealed financial details. District spokeswoman Sharon Woldhagen says the district concluded that the Edison contract "was too expensive for us... We agreed not to discuss it [publicly] anymore." Edison's chief operating officer, former White House lawyer Chris Cerf, says Southwest's complaints are unfounded and that officials have no reason to fear a lawsuit. "I don't know what's in their heads," he scoffs.

In 1995, Sherman, Texas, a manufacturing town tucked between ranches and farms just below the Oklahoma state line, hosted the ribbon-cutting ceremony for the first school Edison ever opened. Now, almost six years later, Sherman and Edison have parted ways, and each of the parties is grumbling. Edison's vice president for development, Manuel Rivera, told Sherman's local newspaper that the company pulled out voluntarily because it had despaired of ever being profitable in the town. Educators and former school officials, however, say Edison almost felt the toe of a Texas boot.

Sherman's woes also stemmed from overhead expenses. School-district documents indicate that during Edison's first three years in Sherman, the district spent $2.6 million more than it would have without the company.

In the spring of 1999, Phillip Garrett, the former assistant superintendent, and David McConkey, Sherman's assistant superintendent for finance and operations, wrote a letter to Superintendent Bob Denton urging termination of the Edison contract. "The history of the Edison Project in Sherman is one of promises broken, poor performance, and agreements violated," said the letter, which also called the test scores at a local Edison school "an embarrassment."

"When we have expressed a concern to Edison officials about the performance of the schools under their control," the letter continued, "their usual response has been to fly someone in from another part of the country to meet with us, fly back, follow up with a telephone call or two, and then ignore the problem. This may generate great revenue for the airlines, but it does nothing for the children of Sherman."

The letter was written when Edison was preparing to launch its initial public stock offering on Wall Street. Whittle personally lobbied local officials to renew the company's five-year deal with Sherman, which was up that spring. When confronted with the complaints about overhead costs, Garrett says, Edison agreed to pay Sherman more than $500,000 and forgo the collection of another $500,000 owed by the district.

A former Edison official who worked with Sherman and asked to remain anonymous said the agreement effectively enabled the company to go into its IPO that November saying it had never lost a contract. Superintendent Denton says he received word of Edison's decision to pull out of Sherman a few weeks after the IPO, in a message Whittle left on his voice mail.

 

Complaints about edison have gone beyond academic performance and higher-than-expected costs. At some of the company's schools, including the grade school in San Francisco and Edison-Ingalls in Wichita, more than 60 percent of the teachers hired by Edison have left within a year. In some districts, Edison has been accused of dumping students, particularly those needing special-education services, into district-run schools; Edison denies this allegation.

In February, a few months after Edison took over management of the entire 1,500-student school district in the Detroit suburb of Inkster, Michigan, the school board passed a resolution listing a litany of complaints, calling for the ouster of Edison's manager, and demanding information on the company's spending. Board member Priscilla J. Cook says officials were worried that Edison was unilaterally making financial decisions that needed board review. "They were showing us disrespect," says Cook. "They had the attitude that we don't know anything." A few hundred miles away, a newly opened Edison school in Milwaukee saw 20 percent of its students transfer out in its first three months.

Edison officials readily admit that there are often problems when the company first moves into new schools and districts. And things aren't made any easier by the fact that most of the company's contracts have involved troubled schools. "We're handed the worst and the toughest schools in America," says Edison's Cerf. "Do you think we're ever handed a school that's successful?"

The controversies seem to have had no effect on Edison's growth. Shortly after the Milwaukee school's difficulties made local headlines last fall, that city's Urban League signed a contract with the company to open a publicly funded grade school focusing on "entrepreneurism and personal wealth development." Investors have also given Edison a thumbs-up: The firm's share price more than doubled last year even though its deficit for the most recent fiscal year was $36 million on revenues of $224 million. (Since its founding in 1992, Edison has lost a grand total of more than $200 million.) Edison's business model predicts that the company will become profitable when it signs up enough schools to generate economies of scale in everything from purchasing to administration; Whittle has estimated that to break even, Edison must triple the number of schools it runs.

One former Edison official, a man who used to make the company's sales pitch to school boards, superintendents, and parents before he became disillusioned and moved on, says Edison has worked hard to keep word of its difficulties from getting out. "It is a house of cards," he says. "When they get a superintendent who sees what is going on, they say -- in fact I used to say -- 'Let us fly you out to New York or to a client conference.' Then, when they get them out there and wine and dine them, they say, 'Hey, you know our company is growing.

Somebody like you could really help us in the long run.'" While several school administrators who helped bring Edison to their districts have gone on to work for the company, Edison fiercely denies using job offers to win contracts or to placate disgruntled officials.

The former Edison official characterizes the company's sales pitch as a fatted calf served up to school administrators: "If you're a superintendent, you get technology. You get noticed. And you'd be a fool not to take the deal, even if it lasts [only] three years or six years. It benefits the kids, especially the poorer kids whose parents can't buy them a computer. And the parents love it because they get a longer school day, and in a lot of places nobody has ever listened to them before."

 

Parents of kids from Jackie Robinson Middle School in Brooklyn were itching to be heard on a leaden Wednesday night in February. Edison representatives had come for a tenants' meeting at the Ebbets Field public-housing complex, just behind the school. At issue was whether parents who lived in the complex should vote to let Edison take over the school's operation.

The reception was chilly, even though the parents had suffered Jackie Robinson's dismal performance for years. In fact, all five of the schools that New York's school chancellor, Harold O. Levy, had offered Edison were chronic low performers, and two had been slated to be closed. The tabloids had for days run stories about parental resistance to Edison, and about the support the com- pany had received from a majority of the school board's seven members.

Only two board members had voiced opposition to the plan, arguing that New York didn't need Edison to turn problem schools around. "We know how to do it," board member Sandra Lerner told Mother Jones. "You need a good teacher in the classroom, with good pay. You need reduced class sizes. You need facilities conducive to learning. And you need the resources for all of the above. In the schools where we have made this investment, we've been able to turn things around."

Lerner's ally on the board, Irving Hamer, says that if Edison were to come into New York and fail, it could mean several more lost years for the children involved. "I hate the idea that they're out there knocking on doors and offering computers to vote this thing in," he says. "If Chris Whittle wants to make a profit from education, he should go and make a [private] school. We have a hard enough time using the resources we have to deliver a quality educational experience. We should not be using these resources to increase the strength of this guy's shareholder value."

Value, it seems, is what the Jackie Robinson parents wanted. After 15 minutes of back-and-forth at the tenants' meeting, one mother took the floor and asked whether Edison would reduce class sizes.

"We follow all local mandates for class sizes," the Edison salesman answered. "So it's going to be the same overcrowding in the classrooms," the woman interrupted.

"I don't know what the exact situation at the school is, so I can't speak -- " Voices erupted in cacophony. "You going to take it over not knowing?" a woman snarled. And another: "He's not giving a direct answer."

On it went until, near the end of the meeting, a woman asked the Edison salesman what would happen to the computers should Edison ever go out of business.

"I'll get back to you," he answered.