Private Education Management Organizations Continue to Grow – But Results are Mixed

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New report shows 778,000 students attend schools operated by private education management organizations – more than 40 percent of all students in charter schools

A mere 27 percent of U.S. online schools run by for-profit
companies achieved Adequate Yearly Progress


Across the nation, almost 300 private companies referred to as “education management organizations” are taking a big bite out of the public school apple. According to a new report, EMOs now operate 35 percent of all public charter schools, and these schools account for more than 40 percent of all charter school students. In the for-profit sector, the number of companies has remained relatively stable for the past few years, yet many of the large and medium-sized for-profit EMOs are expanding the number of students they serve on their campuses, and there has been a dramatic expansion in “virtual schools.” Further, the number of students enrolled in schools under non-profit management has been growing even more rapidly acording to a new report, Profiles of For-Profit and Nonprofit Education Management Organizations: Thirteenth Annual Report – 2010-2011, released by the National Education Policy Center (NEPC), which is housed at the University of Colorado Boulder.

“Growth is occurring vertically as well as horizontally,” said the report’s lead author Dr. Gary Miron, a professor of evaluation, measurement and research at Western Michigan University. “Many of the for-profit operators have actually lost contracts and schools, but have replaced lost contracts with new agreements in other states and districts. Much of the growth experienced by for-profit EMOs is due to steadily adding grades or growing enrollment in existing schools.”

While the growth rate of EMOs, and especially of those delivering online education, has been strong, performance has been mixed.

Only 27.4 percent of “virtual schools” run by for-profit EMOs achieved “Adequate Yearly Progress” as set forth under the federal No Child Left Behind Act. Public schools that fail repeatedly to make AYP are subject to sanctions, including bringing in private companies to manage them or converting them to charter schools. The results for virtual schools are especially jarring when compared with figure for the privately managed brick-and-mortar schools identified in the report as well as the national AYP figure for public schools: both in the 52% range.

The report is the NEPC’s latest in its annual series of profiles of EMOs, companies that are contracted to manage charter schools and other public schools. The EMO sector emerged in the 1990s as part of an effort to use market forces to reform public education.

Profiles of For-Profit and Nonprofit Education Management Organizations is the nation’s most comprehensive examination of the private entities that operate public schools. The Profiles reports are produced by a team of researchers from Western Michigan University, led by Gary Miron and Jessica L. Urschel.

This year’s Profiles report covers 99 for-profit companies and 197 nonprofit organizations that operate public schools, predominately charters. Among the for-profit firms profiled in the report are Connections Academy, Imagine Schools, K-12 Inc., Edison Schools Inc., and White Hat Management. The largest of the non-profit operators is KIPP, with 109 schools and 32,000 students in 20 states and the District of Columbia.

The 99 for-profit companies profiled operate a total of 758 schools, with approximately 393,500 students nationwide. The 197 nonprofits manage 1,170 schools, enrolling approximately 384,000 students. The schools that have seen the fastest growth in recent years are virtual schools operated by for-profit EMOs. During the 2010-2011 school year, a total of 79 such schools enrolled almost 108,000 students.

Among their findings, the researchers obtained Adequate Yearly Progress ratings for 677 of the 758 schools managed by for-profit EMOs. AYP provides a crude indicator of the extent to which schools are meeting state standards. Of those for-profit EMO-operated schools, only 48.2 percent made AYP; 51.8 percent did not. By contrast, the nonprofit EMO sector performed better: the researchers obtained AYP ratings for 948 schools out of 1,170 under non-profit management, and 56.4 percent of those examined made AYP.

This year’s Profiles of For-Profit and Nonprofit Education Management Organizations: Thirteenth Annual Report - 2010-2011 for the first time combines information about for-profit EMOs and nonprofit charter school operators in one report. As the report indicates, the for-profit and non-profit sectors are closely related with some EMOs changing status each year.

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