With friends like hedge fund managers, education reform does not need enemies

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KIPP-aOne of the oddities, for me, about what is happening in education now is how those promoting more standardized testing are called “reformers.” Really, what kind of reform? I guess that it’s similar to those who advocated that prisons move away from rehabilitation and just focus on warehousing.

But now, the standardized test addicts have new friends in, of all people, hedge fund managers. Yep, those Wall Street folks who know how to make money without making anything else. Well, the hedgers love numbers, and many of them are very good at using them to their personal advantage, while not contributing anything tangible to society. And now that seems to be what they’re doing in the far-flung field–from them–of education.

Justin Miller reports in The American Prospect, “How Hedge Funders Built the Pro-Charter Political Network.”

The hedge-fund industry and the charter movement are almost inextricably entangled. Executives see charter-school expansion as vital to the future of public education, relying on a model of competition. They see testing as essential to accountability. And they often look at teacher unions with unvarnished distaste. Several hedge-fund managers have launched their own charter-school chains. You’d be hard-pressed to find a hedge-fund guy who doesn’t sit on a charter-school board.

Apparently what hedge fund managers like in education are (a) charter schools, (b) competition and (c) accountability. They don’t like teachers’ unions. It might seem innocent enough, but let’s drill down a bit.

Charter schools were initially established to create competition for public schools. That, in itself, was a controversial idea because it involved siphoning money from the public school coffers and directing it toward individual schools outside the system. The teachers in those schools did not have to be unionized, so that created a threat to public school teachers. But the upside would be that these new schools could go in their own direction and use techniques that often-calcified public schools rejected out of hand. They could focus more on the needs of the individual students without having to protect a system that was top heavy with a large bureaucracy. In a sense, it would be a marriage between the independence of private schools with the access to public monies that public schools have.

Since large urban public school districts were mostly in financial distress, it would have been difficult to imagine that schools affiliated with the systems would make money. But hedge fund managers, and before them “education companies,” knew where to look for profit sources. The plan with charter schools was to make their operation more efficient than public schools, to reduce expenses so that there would be a profit to skim off the top. Additionally, charter schools set up profitable arrangements with universities in partnerships, presumably to improve the educational offerings to students. Large corporations saw charter schools as opportunities for philanthropy, and then the possibility of claiming partial responsibility for how well these charter schools could do.

But how would they know if the charter schools actually did “better” than public schools? The answer lay in standardized test scores. The model had been tried for decades, with companies like Princeton Review and Kaplan offering tuition-based courses to high school students to improve their college admission test scores. That seemed to work, in part because what Princeton Review and Kaplan were doing was to prepare students to take tests that they were more-or-less indebted to take.

The standardized test factor was a great metric, if the idea was to find a way in which elementary and secondary schools could be tracked. But what did it measure? Well, it measured students’ abilities to perform well on tests, and teachers’ skills in preparing them. Never mind that this was a perfect storm to create cheating, and it did, but it was somewhat like the tail wagging the dog. In this case, the tail was the standardized tests and the dog was the students.

Is this really what America wants to provide learning opportunities for its children? Schools that are test-driven and sources of profit for corporations that include hedge fund managers. Where is each individual student’s curiosity, critical thinking skills, and pure love of learning? It’s time to “stop the madness,” but neither hedge fund managers nor charter school companies have been known for doing that. Perhaps they should take a renewed look at the movie, “Race to Nowhere,” which questions so much of what they are doing.

Arthur Lieber Arthur Lieber (472 Posts)

Since 1969, Arthur Lieber has been teaching and working in non-profit educational organizations. His focus has been on promoting critical, creative, and enjoyable learning for students in informal settings. In the 2010 mid-term elections, he was the Democratic nominee for US Congress from Missouri’s 2nd Congressional District.


  • Stacy Mergenthal

    Public school teachers I have spoken to have said they hate standardized testing, or teaching to the test. It takes a huge chunk of time out of the regular curriculum, it causes severe stress and anxiety in the children, and there is no obvious benefit to either student or school. Learning is supposed to be fun. I don’t think anyone but teachers are even considering the students’ health and well-being; they’re certainly not a factor for hedgefund managers. But the kids are the bottom line, the entire point of our efforts. Every year prior to standardized testing periods there is a flurry of emails and letters coming home urging parents to make sure the kids get enough sleep, eat a healthy breakfast, and take advantage of after-school study sessions. It makes me angry and sad; a reminder of the stress our children are unnecessarily undergoing and how that affects their attitude towards school and learning. I wish there were a way for parents to opt their children out of it in every state.

    Please keep having this conversation. Real education reform should be about what’s best for the children and their needs, with teachers and parents working together, not Wall Street vampires.