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For-Profit Tech Giant Pearson and the Texas Experience

image: flickr user

by Elbert Chu


Texans like everything bigger, so the saying goes. And by any measure, Pearson Plc (NYSE: PSO), is one of the biggest technology players in the education space. Keep in mind that Texas is Rick Perry’s home state. So as he hits the election trail, Perry will be touting his education reforms in Texas. So what’s not to like? Texas Observer’s Abby Rapoport wrote a lengthy, but worthwhile summary of the Texan Pearson dilemma, a case when bigger might not be better.

For background about the Pearson’s enormous operation, Rapoport writes:

 Pearson, one of the giants of the for-profit industry that looms over public education, produces just about every product a student, teacher or school administrator in Texas might need. From textbooks to data management, professional development programs to testing systems, Pearson has it all—and all of it has a price. For statewide testing in Texas alone, the company holds a five-year contract worth nearly $500 million to create and administer exams. If students should fail those tests, Pearson offers a series of remedial-learning products to help them pass. Meanwhile, kids are likely to use textbooks from Pearson-owned publishing houses like Prentice Hall and Pearson Longman. Students who want to take virtual classes may well find themselves in a course subcontracted to Pearson. And if the student drops out, Pearson partners with the American Council on Education to offer the GED exam for a profit.

Pearson is a global company based in London, with a mainly U.S. market. Pearson’s market cap is $13.95 billion, that’s basically double Apollo Group, which runs the University of Phoenix. This profitable megaplex, driven by education efforts is not without its tension:

In a narrow sense, Pearson’s lobbying efforts simply reflect a company protecting its profits. But in a wider view, Pearson is part of a larger education-reform effort that seeks to improve public education through free-market principles. Often that means non-traditional educational approaches like charter schools and online learning. The movement includes a lot of earnest folks, eager to improve public schools and do what’s best for kids. But their efforts have earned a fortune for companies like Pearson. It’s become difficult to determine where the educating ends and the profit-making begins.

Rapoport also does an excellent job explaining the relationship between how Texas students access online classes and participate in “virtual schools”:

There are currently two ways that Texas students can access virtual courses. In 2009, the Legislature created the Texas Virtual School Network, a  catalog of online classes available to high school students throughout the state. The network was a favorite talking point for Gov. Rick Perry on the campaign trail in the 2010 governor’s race, and presumably will be again as he runs for president. The state allows high-performing school districts and state-run educational service centers to offer online high school classes on any state-recognized subject. 
When a student enrolls in an online course, the student’s home district pays for the course. For example, a student in the small Muleshoe ISD in West Texas could take a virtual class offered by the larger Spring Branch ISD near Houston, and Muleshoe would pay for it. Though the virtual classes are offered and paid for by public school districts,  many of the classes themselves are contracted out to private companies.

The other way students can take virtual classes is through one of three full-time virtual schools in Texas. These schools offer all-day online education as early as third grade. These virtual schools may appear to be part of a publicly funded school system, but they are allowed to subcontract their operations to for-profit companies specializing in virtual learning. For instance, the Texas Virtual Academy was, until recently, technically part of a charter school called Southwest Schools. (Texas Virtual Academy is now operating out of a different charter school.) But Texas Virtual Academy is more private than public. Its curriculum is handled by the company K12 Inc. Even the teachers are employees of K12 Inc. Students take online courses offered and taught by employees of for-profit companies.

While the verdict on virtual schools is still out, reformers like Erben, an advocate with Texas Institute for Education Reform, hope to see virtual education expanded. It’s much cheaper, by and large, than traditional classroom instruction and, according to proponents, offers more innovative ways for students to learn. As the state struggles with long-term budget challenges, virtual learning will likely become an increasingly appealing option for lawmakers looking to save money—or increase “efficiencies”—as the number of students continues to rise.

via The Pearson Graduate – The Texas Observer.

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