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'The Acquisition of 16,905 Students'

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FOR PROFIT EDUCATION
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Prior to my career in academia, I practiced law. I took my first job back in 1988 during a boom in so-called mergers and acquisitions. There were lots or reasons bandied about for why one corporation would benefit from acquiring another, but one frequent reason for "M&A" was the coveting of useful assets held by the target company. One airline, for example, might acquire another in part to gain access to an important hub or local market. Although that particular M&A frenzy soon petered out, the idea of growth through acquisition is certainly still an important part of U.S. business strategy.

This, oddly enough, brings us to the new growth industry of public schooling.

The other day, I was editing a policy brief about virtual schooling -- online, computer-mediated instruction of K-12 public school students. The brief's author explains how this field has grown tremendously over the past decade, and he addresses some of the challenges presented by that growth. He also describes the dominant role played by private, for-profit companies. As I read about the largest of those companies, K12 Inc., I decided I wanted to learn more.

I soon clicked on a story from the Wall Street Journal's "MarketWatch" and was jolted by this sentence:
"In the latest quarter, average enrollment jumped 47 percent to 101,030, including the acquisition of 16,905 students." As the story explains, K12 Inc. was able to boost its enrollment by acquiring other, smaller companies that had been providing virtual schooling to these students.

Of course, a provider of instruction needs students to instruct, otherwise the flow of taxpayer dollars will cease. This is true whether the provider of instruction is a local school district or a private, for-profit company like K12 Inc.

But what does it tell us as parents and citizens when the private "acquisition of 16,905 students" is now intertwined with the provision of "public" education? Public services are different from private services, and the privatization of public education has often-negative consequences for equity, quality, and democracy.

Nevertheless, industry public relations specialists have told us throughout the years that M&A activity increases shareholder wealth and increases consumer services through various efficiencies. Pursuant to this argument, these 16,905 acquired students have now been moved to a company that will better meet their educational needs.

I expect that this will sometimes be true, and sometimes it won't. I also expect that those acquired students and their parents will generally not even be aware that they'd been sold from one company to another. Corporate M&A activity takes place in a private business realm that is not part of the world of most parents. By way of illustration, how many consumers know that Dove soap and Skippy peanut butter are owned by Unilever or that "YUM! Brands" runs KFC, Taco Bell and Pizza Hut?

Yet what leaves me troubled is not so much that we won't be aware of who is making a profit from our children's education. Nor is the problem the unfortunate intrusion of biz-speak ("acquisition" of children) into public schooling. Rather, what's extremely troubling is that our elected representatives have decided to allow -- and even encourage in many instances -- the transfer of our children's education into the hands of private, for-profit corporations. The biz-speak and the bottom-line decision-making are the inevitable consequences of that transfer.

It troubles me too that those policy makers' campaign coffers are being filled by corporations who then benefit from policy decisions in ways that look indistinguishable from how defense contractors, oil companies, and others have raided the public coffers for years. Just as mortgage servicing companies work for investors, selling our mortgages repeatedly and then informing us of changes to whom we owe our payments, we can now expect that our children and their associated taxpayer payments will be fluidly moved from investor to investor.

So now our children effectively become corporate assets. How long before they are commodities to be bought and sold on the open market as if they were pork bellies or wheat futures (or bundled sub-prime mortgages)? I'd like to believe we can reverse course. But at least one of the two major political parties will have to find the courage to stand up for public education; and there'll be a lot of corporate donations lost for whoever takes that stand.

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