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Growth of for-profit education management organizations slows

Aug. 1, 2008

KALAMAZOO--The use of for-profit education management organizations for public institutions is leveling off after a decade of rapid growth, according to a report developed by Western Michigan University researchers. But many states, including Michigan, still have up to 80 percent of their charter public schools contracting out management services to private companies.

The 185-page "Profiles for For-profit Education Management Organizations 2007-08" was released July 30 by researchers from WMU and Arizona State University to track trends between public schools and the use of EMOs.

View the full text of the report online.

The report found the number of schools these EMOs operate has decreased slightly. However, since these schools continue to increase their average enrollment, the number of students in these privately operated public schools is still growing, though at a slower rate.

There are a number of likely factors for the slowed growth, says Dr. Gary Miron, WMU professor of education. These include limits on charter school growth in some states, and the fact that many charter public schools are realizing that they can better use the money they have been setting aside for management fees. Many of the larger EMOs are now diversifying and are seeking to expand into supplemental education services such as tutoring and summer schools. Michigan has about 240 charter schools operating in the state, more than 80 percent managed by EMOs and one of the highest percentages in the country.

Key findings of the new report include:

  • For-profit EMOs increased by just two between 2006-07 and 2007-08, bringing the total in the United States to 50.
  • The overall number of schools managed by EMOs declined by 11 during the past year for a current total of 533 schools. Edison Schools Inc. had the largest net decrease in the number of schools that it reported managing, from 97 to 80 schools.
  • Total enrollment in the EMO-managed schools increased by 16,000 students during the last two school years to 254,413 students.
  • Eighty-five percent of EMO-managed schools are charter schools, and 8 percent are virtual schools.
  • Eighty-four percent of for-profit schools are managed by EMOs that manage more than 10 schools. Schools run by these large EMO's account for 89 percent of students enrolled in for-profit schools.
  • About 60 percent of EMO-managed schools are primary schools, and these primary schools run by large EMOs have a higher median enrollment than primary schools run by medium- and small-size EMOs.

WMU's research team also is filing a report on non-profit EMOs, Miron says, which will be available in September.

For more information, contact Gary Miron at gary.miron@wmich.edu or (269) 387-3771.

Media contact: Deanne Molinari, (269) 387-8400, deanne.molinari@wmich.edu

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