Is The Ed Tech Bubble Ready to Burst?

For anyone who still believes the Ed Deform movement is entirely motivated by compassionate individuals who just want what’s best for our children, a recent article on the burgeoning Ed Tech Bubble posted on Geekwire.com ought to set them straight.

The push to get more technology into the classroom started almost immediately with the advent of inexpensive personal computers in the late 1970s and early 1980s, with high tech magnet schools sprouting up in many districts. I even attended one of these early adopters in middle school and have fond memories of playing the primitive fantasy game, Adventure, during class time. However, I have no memory of learning anything practical and didn’t even own a computer until after I graduated from college. More disturbingly, this magnet school was located in a poor, African-American neighborhood with a few middle class white kids bussed in to take advantage of its new computers and science equipment. During my time at that school, it was only these middle class carpetbaggers who had access to the new technology, perhaps a consequence of the naïve assumption that only middle class students could bring profits to the tech companies who sold the equipment.

By the late 1980s and early 90s tech companies started to push for desk top computers, computer labs and internet access for all students, recognizing that all students, regardless of class, could bring them profits because the school districts, rather than individual parents, were purchasing the hardware, site licenses, tech support and software. They also started to realize that even poor people were purchasing cell phones and apps—an indication that perhaps they could also be sold education technology products for personal use.

Over the last few years, however, things have really taken off, with a plethora of companies squeezing districts for millions of dollars in service contracts, data analysis packages, communication software, online courses, ebooks and myriad other snake oils they argue will solve districts’ academic problems. They are also jumping into political campaigns, especially for school board races and state initiatives, hoping this will increase sales. For example, Bill Gates, the Walton Family and Amazon were large funders of Washington’s recent ballot initiative to increase the number of charter schools in the state, while  Michael Bloomberg and Rupert Murdoch were large funders of candidates for the Los Angeles school board race. While Gates’ connection to technology is obvious, the Waltons, Bloomberg and Murdoch are purveyors of information technology and also stand to profit from the increased use of technology in the schools. The focus on charter schools might also seem obscure. However, because they are less restricted by district regulations and procurement rules, charter schools are seen by many tech companies as an easier sell than traditional public schools, particularly with the growing number of online charter schools that rely on technology hardware and software to deliver their curricula.

Of course some of the ways technology is being incorporated into the classroom reflect its changing role in society as a whole. It would be absurd, for example, to expect students to continue using typewriters when most of the rest of the world abandoned them years ago. Similarly, communication, collaboration and inexpensive web design software facilitate communication between teachers, students and parents. However, much of the new technology is of dubious benefit to students and teachers, but immensely profitable to the people pushing it. Some school districts, for example, have purchased expensive site licenses for software that they don’t even use or that serves no purpose. Even technologies which increase efficiency (e.g., LCD projectors, which replaced overhead/transparency projectors, which in turn replaced chalkboards), do not necessarily improve learning outcomes.

Geekwire notes several indications that the bubble may be ready to burst, including a quote by Susan Wolford, Managing Director of BMO Capital Markets, who said that too much money is being spent on ideas “that should have been left to die.” According to the Geekwire piece, “record numbers of companies are receiving venture funding” for educational technology projects and the Consumer Electronics Association recently named education technology as one of five “prominent technology trends expected to influence the consumer electronics (CE) industry in the years ahead.”

Larry Cuban identifies another potential reason for the bubble to burst: the exaggerated claims or assumptions that simply dumping technology into a school will magically transform academic outcomes for students. This has contributed to massive spending on technology that rapidly becomes obsolete or that gets ignored because teachers and students find it burdensome or useless. He points to several notable cases, including instructional television in the 1960s and desktop computers in the 1980s. Even the One-Laptop-Per-Child initiative (OLPC) has failed to deliver its promised outcomes for poor children throughout the world. So far, the laptops have gone primarily to rural Peruvian children and the outcomes have been mixed, at best. According to an evaluation of the program by the World Bank, there is no evidence that OLPC has improved learning in math or language.

Online Ed: Trojan Horse for Destroying Teachers Unions

Beware of Capitalist Bearing Gifts of Cheap Canned Curricula (Image from Flickr, by Perfecto Insecto)

Idaho teachers and parents are pissed off: Last year, their state Legislature passed a law requiring all high school students to take some online classes to graduate, according to the San Francisco Chronicle. They also mandated that students and teachers be given laptops or tablets to take and manage these online courses. In order to pay for the hardware the state will likely have to slash teachers’ wages. Adding insult to injury, the state expects teachers to manage the online classes, simultaneously adding extra responsibilities and deskilling the teaching profession.

In response, teachers marched on the capital last year to oppose the legislation, accusing lawmakers of being in bed with lobbyists from the tech industry like Intel and Apple. Together with parent groups they gathered 75,000 signatures to put a referendum on the ballot in November to overturn the law.

Online education is one of numerous education reforms currently being pushed by billionaire philanthropists and education entrepreneurial vultures. Supporters argue that it opens up doors for students, providing opportunities to take classes not normally offered at their school, make up classes that they have failed or get ahead. Many also make the claim that kids today are so hooked up to their electronic devices that flesh and blood teachers can’t motivate them anymore, but inanimate computers miraculously can.

While there is no compelling data to support the claim that online courses are better motivators or more effective teachers, one might reasonably ask what’s the harm in letting kids voluntarily take a few online classes at home or on weekends to makeup missing credits or to get ahead, especially if it is the parents’ responsibility to pay for the courses and there is no extra burden placed on school districts and teachers?

In Idaho and many other states, however, the opposite is happening, with online classes being imposed on students, parents, teachers and school districts, without their consent. Everyone pays for these programs because the funding comes from tax dollars. It is a Trojan horse for education privatizers who recognize they can’t outright privatize the education system, but can make billions of dollars by using their lobbying muscle to convince legislators to transfer tax dollars from education budgets directly into their pockets. It is a pretty safe investment, too, since they get millions of obligate consumers (i.e., students). Of course it is even better when the online courses are made a mandatory graduation requirement, as in Idaho. Furthermore, once they have sold their product to a school district, they can lock the district into their hardware and software for years or even decades.

For teachers, managing online courses could be trivial, or not, depending on the course, the software and the technical support provided. However, it certainly deskills and trivializes their profession, turning them into over-trained babysitters, whose main job is to make sure students are working, staying on-task, and not surfing the web and messing around on Facebook. Every minute that a teacher gives up to an online course is a minute that the teacher has relinquished his or her expertise and responsibility for teaching to Microsoft, Apple, Pearson, McGraw-Hill, or some other corporate Ed Deformer, whose objectives are profits, not the wellbeing of students.

Perhaps more insidious are the long-term implications for teachers’ salaries and collective bargaining. So-called “unskilled” and “semi-skilled” workers typically earn less money and have less organized strength than their “skilled” allies because they are more easily replaced by the bosses. Car and electronics manufacturers, for example, can easily export assembly line jobs overseas because little training and expertise are required to handle the work. As teaching and other occupations become deskilled, workers in these fields also lose collective strength for similar reasons. (For more on how this can weaken teachers’ unions, please see Carnegie, Steel and the Busting of Teacher Unions ...)

Consider school librarians, who are being replaced by parents, volunteers and non-credentialed staff in order to save money (see “Less Than 25% of California Schools Have Librarians”). In the past, schools hired librarians who were credentialed and trained both as teachers and librarians and who could deliver curricula and collaborate with teachers to design and implement complex research projects. Today, many school districts are treating librarians like retail checkout clerks, whose only responsibilities are to swipe barcodes on books and prevent theft.

Once online classes become a mandated and normal part of school, the door is opened to getting rid of teachers entirely. What need is there for a highly trained, unionized teachers to make sure a room full of kids is completing an online assignment that was prepared and will be assessed by a private corporation? Districts will argue that the job can be done noncredentialed and lower-paid proctors, which will save the districts lots of money and force more teachers into the unemployment lines. They will also be able to use the threat of downsizing as leverage against the unions to extract pay and benefits cuts and increased responsibilities and work for the teachers.

The Convict Who Stole Public Education—Milken’s Online Learning Cash Cow

Huck/Konopacki Labor Cartoons

We hear plenty about the billionaire boys club that has taken control over much of the education reform debate, the unholy triumvirate of Bill Gates, Eli Broad and the Walton Family Foundation. However, they are just the tip of the iceberg. The rogue’s gallery of Ed Deformers who are buying up charter schools, capitalizing on NCLB, bashing teachers and generally destroying public education as we know it, includes numerous hedge fund managers, bankers, billionaires, millionaires and even a few convicted felons, like junk bond peddler Michael Milken.

Virtual Charter Schools Provide Virtually No Benefit to Children (But A Lot To Investors)

K12, the largest U.S. operator of taxpayer-funded online charter schools, has become a cash cow for Milken, according to a recent report in Bloomberg Business Week (cross posted in 4LAKids). K12 has 81,000 students enrolled full-time in its online programs and is expected to generate $500 million in revenue this year (it made $21.5 million in profits last year). Since the company went public in 2007, its stock has doubled in value. K12 online purchased Kaplan Virtual Education this year, a deal that should vastly increase K12’s value and profits, as well as its share of the online learning market.

Online charters make a lot of sense for entrepreneurs. Not only can they do away with teachers unions, but they can do away with teachers entirely (or at least significantly reduce their numbers). They do not need to pay for facilities, counselors, nurses, bus drivers, custodians, librarians, or cafeteria services, and they offer no athletics, band or theater. While most school districts do not pay them the same amount that physical charter schools receive, many argue that even their reduced funding is far too high. In Pennsylvania, for example, K12’s schools receive 80% of what physical charter schools receive, according to the Bloomberg report, an awful lot when you consider how few of the services of traditional physical schools they actually offer. Furthermore, every penny they get from a school district is money taken away from physical schools.

K12 was cofounded by Ron Packard, a former Goldman Sachs banker. K12 has 2,400 employees, including curriculum developers and former executives from PBS and the Smithsonian. Packard created K12 after serving as an executive for Milken’s for-profit education company Knowledge Universe, back in 1999. Startup funds came from Milken and his brother Lowell, who together invested $90 million in the venture, and Larry Ellison, CEO of Oracle, who added another $10 million, according to Bloomberg. Milken and his brother retain a 19% interest in K12, a share that is worth $260 million.

Huck/Konopacki Labor Cartoons

Billionaire Crooks, Eugenicists and Reprobates Bilking Taxpayers and Killing Public Education

Milken is possibly the largest investor in private K12 education. Prior to Knowledge Universe, he also owned Knowledge Learning Inc., (with Rupert Murdoch on its board) and was a major share holder in LeapFrog (See Susan Ohanian). In 1996, Milken formed a partnership with his brother and with Ellison which invested $750 million in 50 ed tech companies. One example was Andy Rosenfield’s internet university, UNext, which Milken and Ellison lavishly funded, according to a CNN report.

Milken, as you may recall, was indicted on 98 counts of racketeering and securities fraud in 1989 as a result of his insider trading and junk bond scamming. As part of a plea deal, he admitted guilt to six securities violations, but was never convicted of any of the racketeering charges. Sentenced to 10 years in a tennis club prison for white collar crooks and permanently banned from Wall Street, he ultimately served only 22 months, paid a hefty $1.1 billion in fines, but bounced back in better shape than the vast majorities of Americans could ever dream of, with a net worth of over $2 billion in 2010, according to his Wikipedia biography.

Larry Ellison, the richest man in California and the sixth richest in the world, is not typically considered part of the education deform network. Nevertheless, he has not only pumped millions into the private digital education sector, primarily in partnership with his criminal crony Milken, but he has made a nifty return on his investments. Furthermore, Ellison also managed to rob several Bay Area school districts of hundreds of thousands of dollars of revenues, each, doing what billionaires do best in their spare time: slashing their tax liabilities. In 2008, Ellison had his Woodside mansion reassessed, receiving a 60% tax cut on his home and a $3 million refund, according to the Almanac Online. The Portola Valley School District saw a revenue decline of between $250,000 and $300,000, as a result, while Sequoia, San Mateo Elementary and San Mateo Union High School Districts also saw big losses from Ellison’s windfall.

Ellison, like Milken, has had his own problems with the Securities and Exchange Commission for insider trading. In 2001 he sold off $900 million in Oracle shares at $30.76 per share just before the stock dropped to nearly half that value on news of low quarterly earnings (InfoWorld.com). Unlike Milken, though, he was able to buy his freedom with a paltry fine of $100 million, which he was able to pay in the form of a donation to his own philanthropic foundation.  He may have been guilty of insider trading again, in September, 2010, when he sold off $217 million worth of Oracle shares, after hiring former HP exec. Mark Hurd, which boosted the value of Oracle shares. However, there doesn’t seem to be any interest by the SEC to investigate this latest scam.

Packard initially convinced the Bill Bennett, former secretary of education under Reagan, to partner with him on his K12 venture. Bennett eventually resigned after saying on his radio show "I do know that it's true that if you wanted to reduce crime, you could—if that were your sole purpose—you could abort every black baby in this country, and your crime rate would go down." While acknowledging that he found such a policy reprehensible (a Christian conservative certainly couldn’t be promoting abortion, could he?), he did not back down from his presumption that black people are responsible for most crime or that making them all go away would be good for society. Profits trump ideology. So Packard had no choice but to let him go. After all, we don’t want racists running a school (or in this case a virtual school system), do we? Yet, apparently it is quite alright to have a convicted criminal running a school, in the case of Milken, who still consults with Packard on a regular basis about their enterprise.

Bennett, of course, is not simply a conservative racist who lacks the self-control to refrain from demonstrating his genocidal bigotry on national radio. (He also told Larry King that beheading drug dealers was morally plausible, ostensibly because they’re all black). He has also demonstrated hostility toward teachers, children and public education through his support for merit pay, national testing, vouchers, slashing federal college scholarships, trying children as adults in criminal court, and promoting religion in school). Oh, and let’s not forget that while he sends all the drug dealers to the guillotine, and preaches morality to our youth, he himself has lost as much as $8 million in high stakes gambling (see WSWS expose on Bennett’s gambling addiction).

Virtual Schools and Educational Quality

Aside from the greed and corruption inherent in private virtual charter schools, there are some obvious problems with online learning in terms of the quality of education they provide. This is particularly true for K12’s 81,000 full-time students, who do all of their schoolwork from their homes. They are not getting the socialization and live, in-person interactions that students receive in traditional public schools. They are not learning how to cooperate, resolve conflicts and work in teams the way they would with real live classmates and adults. Proponents argue that online education helps avoid the negative aspects of socialization, like drugs, bullying and sexual activity. However, this isn’t true. Cyber bullying is well-known, as is the phenomenon of kids developing online relationships, including ones with sexual predators. Furthermore, kids can still learn about drugs and succumb to on-line peer pressure. They can still obtain drugs from neighborhood kids, at the park, or the other usual places where drugs can be found. In fact, there is no reason to believe that a sheltered existence provides any protection at all. Rather, it could just make children more naïve and ignorant and thus more easily victimized.

Another problem is that virtual schools, like college online learning, presume that students will spend a certain amount of time in front of their computers, doing homework, reading, and generally maintaining a level of self-discipline and organization, something that does not even happen with all virtual college students. However, here we are talking about high school, middle school, and in some cases elementary school students, who are expected to do all this work at home, often unsupervised, as their parents may work outside the home. The Bloomberg article suggests that at least 15% of the students in Pennsylvania’s Bangor District cyber schools were regular truants.

Not surprisingly, 75% of K12 schools failed to show adequately yearly progress on their state exams. This is significantly higher than the 45% of physical schools that are currently failing to meet this federal benchmark. Packard blames the statistic on his students, who tend to be lower income. While he may be true (lower income students do tend to perform more poorly on standardized exams), he still needs to be held to the same standards (as stupid as they are) as traditional schools. Furthermore, in urban districts like Los Angeles, New York, Chicago, Washington, large percentages of the students are also low income. In San Bernardino, California, 85% of the students are on free or reduced lunch. In Fresno and Santa Ana it is 76% and 75%, respectively. In Los Angeles and Oakland, it is 74% and 73%, respectively. (Data from the California DOE website). Therefore, I find Packard’s justification specious.

Teachers, needless to say, are not thrilled with virtual classrooms like K12. The Chicago Teachers Union sued the Illinois State Board of Education in 2006 to challenge the state’s decision to spend taxpayer dollars on the nonprofit Chicago Virtual Charter School (See David Randall’s piece in Forbes). The school, like many virtual schools, does not provide sufficient certificated teachers, which the union said was tantamount to making taxpayers pay for homeschooling.

Despite K12’s lack of success in terms of improving student achievement, they have been so successful financially, that they have attracted others to their cause. In April, Technology Crossover Ventures invested $125 million to K12’s accelerated expansion plan (see Gilfus Group).