Regarding the issue raised in Chester Finn's editorial about the 92nd Street Y (Nov. 21) [see http://www.edexcellence.net/gadfly/issue.cfm?issue=32#453]: "Why don't private schools act like businesses and expand when demand exceeds supply?" The answer is, "There's no incentive to do so, since independent schools lose money on each child." (Tuition at independent day schools covers only 75-85% of the cost to educate each child: the remaining expense must be covered largely by charitable contributions and endowment income). In addition, it is precisely the intimacy and "smallness" that makes for great schools in the first place, so there is a programmatic and philosophical disincentive to grow the size of an independent school.
The real question is why don't entrepreneurs enter the marketplace to fill the gap? The answer (charters being a prime example) is that they are almost always undercapitalized. Edison provides an exception to the capitalization issue, but it found that the private school market wasn't profitable and that managing public schools was more than a challenge. It is extremely difficult and expensive to start a new school, especially at the secondary level, so the risk-return ratio is problematic at best.
So what's the alternative answer? Milton Friedman suggested decades ago privatizing the whole system, giving full-cost education credits to the public and thereby allowing all public and private schools to compete for students. In his "marketplace model," families (consumers) from all socio-economic levels would dictate the survival of the fittest schools, voting with their feet and their pocketbooks, and would have the choice of education that now only the affluent enjoy. The "GI Bill" made quality colleges financially accessible to an entire generation of adults: why wouldn't we consider the same option for education at the pre-collegiate level?
Current voucher experiments understand the principle (family choice) but fail to comprehend the means, both underfunding the true cost and, in many cases, putting in place gratuitous regulations that would undermine the independence and freedom of the very schools that might best serve the underserved.
Patrick Bassett
President, National Association of Independent Schools