Market malfunctions in the charter sector
By Chester E. Finn, Jr. and Brandon L. Wright
By Chester E. Finn, Jr. and Brandon L. Wright
This is the fourth in a series of essays marking the twenty-fifth anniversary of America’s first charter school law. These commentaries are informed and inspired by our forthcoming book (co-authored with Bruno V. Manno), Charter Schools at the Crossroads: Predicaments, Paradoxes, Possibilities, to be published this fall by Harvard Education Press. Read the other essays here, here, here, and here.
Our first essay paid homage to chartering’s origins, a prominent strand of which was the mounting awareness that K–12 education’s “one best system” was not meeting the educational needs of every child. One response, via the policy mechanism that became known as “chartering,” was to create a lightly regulated marketplace of diverse and generally autonomous schools that would strive to ensure high-quality education for all children—especially boys and girls in poverty—and empower families to determine what school best suits their singular needs. That was the theory, and a noble one it was. If only it had worked as well as its architects hoped.
In general, the charter marketplace—where it’s had the freedom and capacity to grow in response to demand—has done pretty well at responding to families’ non-educational priorities, such as safety, convenience, and a welcoming atmosphere. It’s also given rise to an array of fairly diverse schools that align with the varied educational tastes of an ever more diverse society.
Across much of the nation, however, this marketplace has done only a mediocre job of matching supply with demand. In many places, there aren’t enough charter schools; in others, too many schools are chasing too few pupils. Nor has the market furnished reliable quality control. That’s a problem, considering that education is a public as well as a private good and the society that’s paying for these schools needs to focus on whether they’re delivering solid results—even in situations where their “customers” may not place academic achievement at the top of their priorities. (Society should of course do that with district schools, too!)
Our forthcoming book probes the causes of these partial market failures in some depth. Here, we highlight three of them.
Too few (or too many) schools: As rapidly as it’s grown (6,800+ schools at last count), the supply of charters has not keep up with demand in most places. (Estimates of the total waiting list go as high as a million kids.) All sorts of political, budgetary, and statutory obstacles have limited the number, size, and locations of charter schools. In this circumstance, we have a “sellers’ market” in which the “buyers” can’t be too fussy. Many families consider themselves fortunate to gain entry to any charter, regardless of academic performance. As the old saying goes, beggars can’t be choosers. And if you’ve never seen Waiting for Superman, track it down. Truly poignant.
In cities like Dayton and Detroit, however, the extant supply of student places in charter schools exceeds the apparent demand for them. In other words, many charters have vacant seats. This brings its own set of problems. Schools in need of enough pupils to balance their own budgets and stay above water must market themselves to families, but that doesn’t mean they always compete on the basis of academic effectiveness. Some resort to petty tactics, such as luring potential attendees with iPads and such. Others opt for garden variety advertising, emphasizing characteristics that might attract parents (e.g. after-school care) but are unrelated to quality. In a recent debate on the Fordham Institute blog, Jay Greene argued that we ought to trust the consumer, insisting that they’re looking for attributes (beyond prowess at boosting test scores) that matter more in the long run. Perhaps so. But we have to agree with our colleague Mike Petrilli, Greene’s opposite in the back-and-forth: While respecting school characteristics that don’t turn up on state assessments, we believe that every kind of public school has an obligation to taxpayers to deliver sound academic results. Which brings us to another malfunction in the charter market.
Weak consumer information: Even where parents are mindful of school quality and try their best to be discerning, consumer information in this marketplace remains incomplete, hard to access, and difficult to understand. State report cards are ubiquitous yet lacking. Even when they adequately display academic achievement in tested subjects, they cannot begin to convey all the other information that goes into a sound school choice. What, for example, does the school truly value? Are its classrooms quiet and orderly or lively and engaged? How does it handle character development? Discipline? Disabilities? Do students and teachers like it there or flee as soon as possible? The list goes on.
Even the most basic data in these report cards are frequently presented in user-unfriendly ways. As a result, parents—faced with incomplete, obscure, or unreliable information about schools while trying to gauge what’s workable for their families—may simply turn for help to friends, neighbors, and current patrons of the schools that they’re considering. That’s no bad thing to do; it’s even vital when other sources are scarce or inscrutable. But it attests to the imperfections of today’s charter marketplace.
Distracted suppliers: Many charters are strapped for funds. They feel overregulated by their states, heckled by their authorizers, and politically stressed, so the people running them often struggle to keep their heads above water (which includes keeping enrollments up). They have little energy or resources to expend on becoming more rigorous or investing in stronger curricula and more experienced instructors.
Indeed, more than a few charter schools of our acquaintance have watered down their curricula, eased their academic demands, or shortened their hours in response to consumer complaints that they were just too demanding or the cost of all that rigor was breaking their budgets. Even schools with a queue of prospective attendees waiting for seats cannot always afford the extra staffing and extended hours that both add to their expenses and sometimes irk their clients.
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There are countries where parents’ preoccupation with gaining every possible educational advantage for their daughters and sons creates competitive forces that reward schools with impressive track records of student achievement. This is also visible in some sectors of American society, most conspicuously in the race—largely an upper-middle class phenomenon—for admission to elite colleges and universities. But for the United States as a whole we’ve reluctantly concluded that the marketplace alone—understood as individuals choosing the school their child will attend—is not a sufficient mechanism for assuring strong academic achievement and other important educational outcomes. External constraints are part of the problem, but unfortunately, they’re not the whole story.
In our next essay, we’ll suggest some of the changes most needed to foster strong markets and viable schools.
In a series of recent posts, I’ve been examining what we reformers (and our friends in philanthropy) might do to spur better outcomes for kids besides obsessing over laws and regulations. I’ve looked at the promise of building new systems through charters or ESAs, as well as "disruptive innovations" that target students directly. Let me continue in that vein by looking at efforts to go around “the system” and put useful tools directly into the hands of parents and teachers.
Power to the parents
A major theme in education reform has always been the imperative to give real authority to the consumers—and, inevitably, take some of it from the providers. Standards, testing, and accountability have been pitched in part as mechanisms to get objective information to parents (and taxpayers) unfiltered by the spin of local administrators and elected officials. School choice, too, is all about vesting parents with a real say in the education of their children.
What else might be done to empower and inform parents? One of the most impressive creations of the reform era is GreatSchools.org. By providing clear, understandable information that is accessed by somewhere between one-third and one-half of the nation’s parents in any given year, GreatSchools has arguably done more than any other organization to bring sunlight to the education system and nudge parents towards schools of quality—and to choose those schools on the basis of trustworthy, unspun information.
Former TNTP President Tim Daly is taking this approach a big step further via Ed Navigator, his service to provide hands-on, in-person counseling to low-income parents regarding their kids’ education options. He recently set up shop in New Orleans—epicenter of school options—and his experience so far is promising. With a little time and a bit of nudging, it’s become evident that the parents of kids are in mediocre schools are game to consider better options.
This goes beyond conventional gauges of school quality. Over the years, GreatSchools has also built out a suite of offerings under the “GreatKids” banner that help parents do their jobs more effectively. (Check out these videos showing what “grade-level” work really looks like.) Their web pages and videos helping parents understand the results from the new Common Core tests are as good as anything I’ve seen. And CEO Bill Jackson is keen to figure out how to build smart data systems that enable teachers to text parents with timely, specific pieces of advice for helping their kids overcome learning challenges. (Remind is working on that too.)
Turning parents into teachers—or at least into “learning coaches”—is also the goal of Noodle, a company under development by Princeton Review founder John Katzman. His vision is to create a catalogue of robust learning resources available online and make it easier for parents and kids to access them.
America’s tens of millions of parents are an undervalued resource. Finding ways to help them play their roles even a little better could go a long way.
Target the teachers
Another promising strategy for reformers, innovators, and philanthropists is to put equip teachers with better resources and information. Here I would distinguish between efforts to sell products into the system (to be tackled in a future post) and work-arounds that target teachers directly. There is a lot of money being raised for start-ups working on new tools for teachers. According to a recent EdSurge report edited by Julie Petersen, eighty-four of these companies have raised almost half a billion dollars in venture capital over the past five years alone.
The “direct to consumer” approach for teachers is appealing because it’s so hard for upstarts to crack most districts’ procurement systems. (Katzman has an idea for fixing that as well.) The fundamental challenge is the fragmented education system; selling materials to fourteen thousand independent school districts and another six thousand charter schools takes a massive sales force. That’s why the incumbent suppliers—textbook companies—have been able to protect their oligopoly even in the age of “disruptive innovation.”
Going around all of that is immensely appealing. If you’re an entrepreneur and have a cheap (or, especially, free) product to sell to teachers, why mess with all the hassles of getting your offering “adopted” by the bureaucracy? Why not sell your stuff straight to teachers?
That’s what Class Dojo and Learnzillion have done. The former is a classroom management program; the latter is a lesson plan bank and professional development provider. Class Dojo is completely free for teachers and parents. (Parents can use its app to see how their children are behaving.) It’s reportedly in use in more than eighty-five thousand schools nationwide and even more around the world. Learnzillion offers a free version to teachers but sells a premium service to districts. At last count, it had one million teachers registered on its site.
One question smart folks raise about Class Dojo and other entities that offer free services to teachers is how they can make money enough to stay alive. (Neither Class Dojo nor Remind has made a nickel so far.) Maybe that’s not a problem if they can raise funding from philanthropy (as Better Lesson has done), but if innovations are to be sustained over the long term and continue getting better, a financial return to investors is important. Learnzillion’s pivot to sell a premium service to districts offers one solution—but then we’re back to dealing with procurement again.
Another key question is whether these services will lead to good instructional practice. As my colleague Robert Pondiscio has argued, it may be a mistake to expect teachers to play the role of “instructional designer” on top of all of their other duties. If this hodgepodge of direct-to-teacher offerings are meant to replace a coherent, school-wide (or district-wide) curriculum, are we sure that’s such a good thing?
Still, if done well, the Class Dojo or Learnzillion model could be adapted to solve countless other problems—especially if philanthropy is game to help. For example, we at Fordham and the Knowledge Matters Campaign are fanatical about getting elementary schools to teach history, geography, science, art, and music in the early grades. Getting schools to adopt a curriculum like Core Knowledge is one way to do that, but system-level change can be hard and arduous; even when you succeed, you need teacher buy-in to ensure effective implementation.
So what if we and like-minded philanthropists worked to target elementary teachers directly? As I've argued before, the English language arts block could be a great opportunity to infuse content-rich instruction. In a blended learning model, some students could watch streaming videos about history or science or other content areas while their teacher is providing small-group reading instruction to other kids. Innovators could build a suite of free video modules on different topics, along with mini-assessments (or “exit tickets”), and launch a digital marketing campaign to let K–3 teachers know about their existence.
You could imagine similar efforts for other curriculum areas, from STEM to coding to financial literacy to civics to sex education.
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I’m hardly the first to stumble on the idea of going around the system and providing services directly to kids, parents, or teachers. Edu-preneurs of various stripes have been trying it for decades. The time has come to ask if it’s a strategy that should become more central to the mission of education reform.
On this week’s podcast, Mike Petrilli and Checker Finn discuss the growing left-right schism in education reform, whether we need more than just "no-excuses" charter schools for poor kids, and a Maryland county’s attempt to diversify its gifted programs. During the Research Minute, Amber Northern examines the effectiveness of SEED DC, the nation’s first public, urban, college-preparatory boarding school.
Rebecca Unterman, Dan Bloom, D. Crystal Byndloss, and Emily Terwelp, "Going Away to School," MDRC (June 2016).
In April, the Government Accountability Office (GAO) released a report examining recent trends in the racial and socioeconomic composition of America’s public schools. Between the 2000–01 and 2013–14 school years, the study finds, the fraction of U.S. schools that were both high-poverty (75 percent or more eligible for free or reduced-price lunch, or FRPL) and high-minority (75 percent or more African American or Hispanic students) rose from 9 to 16 percent.
While the GAO analysts caution that their analyses “should not be used to make conclusions about the presence or absence of unlawful discrimination,” to headline writers at the Washington Post, USA Today, and the Los Angeles Times, the findings suggest “resegregation” in American schools. The Post editorial board declared a “resurgence of resegregation.” But is this a fair interpretation?
There are at least two problems with drawing such a conclusion. The first is that the GAO analysis doesn’t take into account overall demographic trends. During this time period, student demographics were changing in America. As a share of the national student population, Hispanic students increased from 16 percent to 25 percent from 2000 to 2014 (though African American pupils remained virtually unchanged as a fraction of the population). Due to the increase in the Hispanic population, we shouldn’t be surprised that the percentage of high-minority schools increased over time as well.
A more refined gauge of whether schools are becoming increasingly segregated over time—or, in more neutral language, “increasingly racially isolated”—would examine how the demographic makeup of America’s schools compares to the national composition of students. The more “dissimilar” a school’s makeup is relative to the overall population, the more racially isolated it is—and vice versa. Applying this type of analysis in a recent issue of Education Next, economist Steve Rivkin found no evidence that school segregation increased from 2000 to 2012, at least for African American students.
The second problem is the GAO’s use of FRPL eligibility as a marker for poverty. That’s important because the fraction of pupils eligible for FRPL also noticeably increased during the study period—from 38 percent to 52 percent. The increase in FRPL eligibility could be partly (or even largely) attributable to the 2010 enactment of the Community Eligibility Provisions, a program that allows qualifying districts to deem non-low-income kids as FRPL-eligible. (Rising childhood poverty, or near-poverty, because of the recession and its aftermath could also be a contributor.) Given these trends, one might naturally expect to see more U.S. schools meeting the 75 percent thresholds that GAO uses to identify an economically isolated school.
In sum, Matt DiCarlo of the Shanker Institute asks about the GAO findings, “Does it really represent ‘resegregation?’ Not necessarily.” Almost everyone can agree that school segregation is an important but complicated matter. Let’s not reduce it to a headline based on a questionable interpretation of the data.
SOURCE: “Better Use of Information Could Help Agencies Identify Disparities and Address Racial Discrimination,” United States Government Accountability Office (April 2016).
Public Impact and EdPlex have released a new website, process guide, and set of resources for charter school authorizers to support school restarts. Restarts occur when an underperforming school is closed and a new school with new management opens to serve the same students. The restart strategy differs from other major interventions, such as transformation (replace school leader, implement research-based strategies), turnaround (replace school leader and at least 50 percent of staff, implement new instructional model), and school closure. According to the authors of the guide, restarts are the more effective strategy: closures negatively affect student attendance and achievement, while preliminary research shows better student outcomes in restarts than transformations or turnarounds. A key issue with turnarounds is finding great school leaders and teachers. Done well, restarts can mean rapid improvement for low-performing schools (we acknowledge, however, that some believe that a core part of the charter model is simply closing failing schools, period).
The resources and process guide in particular are meant to increase the likelihood of restart success and sustainability by providing authorizers with a practical “how-to” for getting the job done. The guide consists of nine steps, from the planning stage through post-opening, that include community engagement, recruiting, restart approval, and matching the new management team/CMO with the school identified for restart. A timeline that can be utilized anywhere from 12–24 months out is also included.
The website features a good library of resources, searchable by each of the nine process steps, from organizations engaged in restart work. Content includes a Community Collaboration for School Innovation Toolkit from the Colorado Department of Education, an RFP for Restart Applicants from the Tennessee Achievement School District, a presentation on the match process from the School District of Philadelphia, and a communications protocol from UP Education Network for announcing restarts to the public, to name a few. Even if you’re not engaged in restart work, there’s some good stuff in here worth checking out for any charter authorizer.
There are, of course, certain conditions for success upon which restart efforts will hinge: authorizer authority to implement/support a restart, community engagement, transparency of performance of the restarted school and—critically—the supply of good school operators. As an Ohio charter authorizer ourselves, we at the Fordham Institute has supported a few turnarounds (including one charter, Dayton Leadership Academy – Dayton View Campus, that just received a state award for outstanding performance on the state’s student growth measure), but nothing that matches the definition of a restart. As a charter authorizer, restarts are something we’d love to try because the strategy has great potential. In our experience, the biggest challenge has been access to a supply of high-quality operators.
Authorizers considering using restarts as one strategy to address poor performance might consider applying for Kickstart School Restart (KSR) support (the deadline to apply is June 10). Underwritten by the Michael & Susan Dell Foundation (which also supports the joint Public Impact-EdPlex project), KSR provides authorizers up to a year of personalized consulting specific to restart implementation. The support includes a self-assessment and development of a restart implementation plan, a consultant-facilitated SWOT analysis that builds on the self-assessment, coaching and direct technical assistance, and possibly peer learning via cohort meetings.
If the conditions for success are present, restarts appear to be a promising strategy to impact student outcomes. The new resources offered here provide good tools for authorizers undertaking this work.
SOURCE: SchoolRestarts.org, Public Impact, EdPlex, and the Michael & Susan Dell Foundation, accessed June 8, 2016.
This report examines the measures of school performance—such as reading and math proficiency rates—that are included in existing state accountability systems and provisionally assesses their alignment with the requirements of the newly minted Every Student Succeeds Act.
Nationwide, the report identifies a total of sixty unique measures—though no individual state uses more than twenty-six, or fewer than four—that they divide into seven categories: achievement, growth, English language acquisition, early warning, persistence, college- and career ready, and “other.”
This schema allows them to generate some useful statistics. For example, all fifty states and the District of Columbia measure achievement in English language arts and math, and many also measure achievement in science (twenty-seven states plus D.C.), social studies (fourteen states), or writing (five states). Similarly, forty-five states plus D.C. measure growth in ELA and math, yet only eight make the attempt in science, and only three in social studies.
At the high school level, forty-nine states plus D.C. include four-year graduation rates. Many also include other persistence measures, such as an extended-year cohort graduate rate (thirty-seven states) or dropout rate (eleven states). Furthermore, thirty states include some other measure of college and career readiness, such as participation in or performance on advanced coursework or exams (twenty-two), college entry exams (twenty-five), or career preparedness programs (twenty-six).
Twenty-four states also include at least one early warning indicator, such as attendance (eighteen) or chronic absenteeism (five). However, just six include an English language acquisition indicator. Finally, many states have one or more idiosyncratic indicators dealing with topics like arts access, physical fitness, and staff retention, or (for a group of nine districts in California) student, staff, and parent culture-climate survey results and measures of students’ social-emotional skills.
In addition to examining the frequency with which indicators are included, the authors also examine the weights they are typically assigned (though because accountability systems are in flux this analysis is limited to just thirty-five states). For example, in the average state, academic achievement accounts for 52 percent of elementary and middle school accountability ratings and 42 percent of high school ratings (though these figures mask considerable variation between states).
Given what we know about the contribution of out-of-school factors to achievement, these percentages seem unjustifiably high, especially since growth accounts for just 45 percent of elementary and middle school ratings in the average state and just 30 percent of high school ratings (even after the states that don’t include growth are excluded). Just three states weight growth more heavily than achievement, even though the former is a much fairer indicator of school performance.
Together, achievement and growth account for 91 percent of elementary and middle school ratings and 63 percent of high school ratings in the average state, meaning that other indicator types play a secondary role at best. At the high school level, persistence indicators like graduation account for an average of 22 percent of high school ratings, while college- and career-ready indicators account for 15 percent. However, early warning indicators account for just 11 percent of elementary and middle school ratings and 7 percent of high school ratings, and English language acquisition indicators account for just 7 percent of elementary and middle school ratings and 6 percent of high school ratings. (Again, states that lack each indicator type are excluded from these averages.)
As the report notes, the majority of state accountability systems are already aligned with many ESSA requirements (with the notable exception of the English language acquisition requirement). For example, forty-two states already have at least one early warning, persistence, college- and career-ready, or other indicator that might fulfill ESSA’s criteria for the “school quality or student success” indicator. But compliance shouldn’t be the only goal. More important is the creation of a fair and transparent system—or fifty systems, really.
To that end, the report sensibly suggests that states select “the fewest number of indicators needed to provide the most impactful outcomes.” But which outcomes are most impactful?
For the authors, “the purpose of school accountability is to identify struggling schools and provide them with additional supports.” But in an era defined by expanding choice and increased attention to consumer protection, that seems far too narrow.
SOURCE: Carmel Martin, Scott Sargrad, and Samantha Batel, “Making the Grade: A 50-State Analysis of School Accountability Indicators,” Center for American Progress (May 2016).