Promise of Profit Can Help Neediest Students

This past fall, The Leona Group, a for-profit charter management company, spent hundreds of thousands of dollars to fix up Highland Park schools.

The schools were filthy — toilets had to be replaced, ceilings had to be repaired, and exterminators had to be hired. After these repairs, one student told me he had never seen a classroom look so clean.

This summer, PrepNet, another for-profit charter management company, is spending similar amounts to pay employees and to fix up a building for a charter public school that will open this fall in Taylor. Part of the reason PrepNet is opening this high school is because parents requested it (full disclosure: I serve as a volunteer board member for PrepNet's Taylor school).

Throughout Michigan, charter school companies are spending large sums of money to open 32 new schools this fall. Opening a charter school is no easy feat, and comes with large financial and reputational risks. Perhaps the most nerve-wracking part of the process is waiting to see whether students will enroll. 

There are no guarantees in the charter school world: Students don't have to attend, and won't if the school isn't their best available option. And if students don't attend, the charter school won't receive state funding, even though it hired employees and paid to renovate a building. 

Despite this risk, companies are opening new schools in areas of the state where students (and communities) are struggling with illiteracy and poverty. Nearly half of the state's charter schools are in the Detroit area. Five of the new charter schools that open this fall will be in Detroit, three will be in Flint and one serving homeless high school students will open in Grand Rapids.

More heartening is the fact that low-income, minority charter school students are learning more than their peers in conventional schools. For-profit companies are helping educate some of Michigan's neediest, and, according to a Stanford University study, charter schools are doing a better job than conventional schools.

Profit is what drives and enables education entrepreneurs to open schools in areas most neglected by conventional schools. Where are parents and students most dissatisfied with their educational options and most likely to enroll in a charter school? Likely in districts that spend exorbitant amounts of money with little to show for it.

Some might find the concept of profit seeking in public education unpalatable. Though we acquire almost every good and service in a private market on a daily basis, public education, critics say, is different.

But even those critics cannot deny that the public sector has done a deplorable job in some Michigan districts. Consider Pontiac, which spends $16,400 per student, but cannot provide toilet paper. Or Highland Park, which was spending nearly $20,000 per student, and left its school buildings in utter disrepair. Or consider the many school districts, some of which are facing oncoming financial disaster, that chose to protect their unions instead of making sure there would be enough money next year to pay to educate students.

If a charter management company is capable of providing a quality education to Michigan students for a fraction of what it takes to educate that child in a conventional district, why is it wrong for that company to make a profit?

Charter management companies are succeeding where many conventional schools (and charities) have failed. The promise of future profit is what will encourage education entrepreneurs to take risks to serve more students who are being shortchanged by the conventional school system.