[IAEP] Wired: Pearson’s Quest to Cover the Planet in Company-Run Schools

[Dave Crossland]

Hi

Interesting #longread in Wired this month:

http://www.wired.com/2016/04/apec-schools/

-- 
Cheers
Dave

This article appears in the April 2016 issue.

By Anya Kamenetz (@anya1anya), the author of The Test, a book about
standardized testing in US schools.



FOR DECADES, THE major landmark of Balut, Tondo, a densely populated slum
squeezed against Manila’s North Harbor, was a monumental pile of
often-smoldering trash nicknamed Smokey Mountain. “It used to be sort of
pretty, actually,” says Nellie Cruz, a lifelong resident. She points to the
spot, now bulldozed, across a reeking, garbage-strewn canal from where we
stand with her 13-year-old son, Aki.

The scene is humble, yes, but Nellie, a single mother, isn’t destitute or
desperate. She’s a modern, upwardly mobile megacity dweller, the kind
you’re equally likely to meet in Shanghai or São Paulo, except with better
English skills—the legacy of the Philippines’ history as a US colony and
one key to its current economic growth.

APEC is a different kind of school—one that’s part of a for-profit chain
and relatively low-cost at $2 a day.
Both Nellie and Aki carry iPhones, for example, though the devices were
given to them by Nellie’s sister, a nurse, who lives in the San Francisco
Bay Area. The Cruzes’ immaculate, doll-size family compound has a caged
rooster in the front yard, Christian inspirational wall decals, and a
strong Wi-Fi signal. In contrast to the screen-time panic among US parents,
Nellie is OK with her only child spending time in his attic bedroom, gaming
and browsing science pages on Facebook, rather than out on the street
exposed to the pounding sun, the omnipresent filth, and the drug gangs on
the corner.

The same protective but ambitious impulses were at work when it came to
choosing a school for Aki. He attended Catholic institutions when he was
younger. Then Nellie lost her job in marketing. So for sixth grade, Aki
went off to public school.

“There were 58 students in one classroom,” he tells me. “Only some of us,
the Section 1s”—top performers—“got to sit in the classroom. The others
studied in the corridor.” Nellie didn’t like her quiet, polite child having
to mix it up with kids “from all walks of life,” as she puts it.

So for seventh grade they found a new option at the other end of the street
from the public school, housed in a former umbrella factory. The sign
outside reads “APEC Schools: Affordable World Class Education From Ayala
and Pearson.”

APEC isn’t just new to Tondo or Manila. It’s a different kind of school
altogether: one that’s part of a for-profit chain and relatively low-cost
at $2 a day, what you might pay for a monthly smartphone bill here. The
chain is a fast-growing joint venture between Ayala, one of the
Philippines’ biggest conglomerates, and Pearson, the largest education
company in the world.

In the US, Pearson is best known as a major crafter of the Common Core
tests used in many states. It also markets learning software, powers online
college programs, and runs computer-based exams like the GMAT and the GED.
In fact, Nellie already knew the name Pearson from the tests and prep her
sister took to get into nursing school.

But the company has its eye on much, much more. Investment firm GSV
Advisors recently estimated the annual global outlay on education at $5.5
trillion and growing rapidly. Let that number sink in for a second—it’s a
doozy. The figure is nearly on par with the global health care industry,
but there is no Big Pharma yet in education. Most of that money circulates
within government bureaucracies.

Pearson would like to become education’s first major conglomerate, serving
as the largest private provider of standardized tests, software, materials,
and now the schools themselves.

To this end, the company is testing academic, financial, and technological
models for fully privatized education on the world’s poor. It’s pursuing
this strategy through a venture called the Pearson Affordable Learning
Fund. Pearson allocated the fund an initial $15 million in 2012 and another
$50 million in January 2015. Students in developing countries vastly
outnumber those in wealthy nations, constituting a larger market for the
company than students in the West. Here in the US, Pearson pursues its
privatization agenda through charter schools that are run for profit but
funded by taxpayers. It’s hard to imagine the company won’t apply what it
learns from its global experiments as it continues to expand its offerings
stateside.

The low-cost schools in the Philippines are one of Pearson’s 11 equity
investments in programs across Asia and Africa serving more than 360,000
students. Two of the most prominent, the Omega Schools in Ghana and Bridge
International Academies based in Kenya, have hundreds of campuses charging
as little as $6 a month. They locate in cheaply rented spaces, hire
younger, less-experienced teachers, and train and pay them less than
instructors at government-run schools. The company argues that by using a
curriculum reflecting its expertise, plus digital technology—computers,
tablets, software—it can deliver a more standardized, higher-quality
education at a lower cost per student. All Pearson-backed schools agree to
test students frequently and use software and analytics to track outcomes.

Not every Pearson-backed chain will succeed, but the company can use the
outcomes to assess which models work best. Pearson will have a stake in the
winners; the Affordable Learning Fund takes at least one seat on each
board. The goal is to serve more than a million students by 2020.

Like any global scheme, the fund has a mastermind: Michael Barber,
Pearson’s white-haired, indomitable yet excruciatingly polite chief
education adviser. As a McKinsey consultant to the nation of Pakistan
starting in 2010, Barber implemented an educational system that now sees
nearly three out of four residents of the second-largest city, Lahore,
attend low-cost private schools, many paid for by government vouchers. Now
he’s taking his ideas global with Pearson.

The growth of privatized education is igniting a global debate. Last April,
major teachers’ unions in the US, UK, and South Africa signed a letter to
Pearson CEO John Fallon that read in part: “By supporting the expansion of
low-fee private schooling and other competitive practices, Pearson is
essentially ensuring that a large number of the world’s most vulnerable
children have no hope of receiving free, quality education.” In July, the
United Nations Human Rights Council adopted a resolution that called for
monitoring all private education providers.

Pearson’s corporate reputation doesn’t help matters. In the US, just the
mention of its name is enough to make some education activists apoplectic.
In 2014 the company was implicated in an FBI investigation of unfair
bidding practices for a $1.3 billion deal to provide curricula via iPads to
the students of Los Angeles Unified School District. Meanwhile, in New
Jersey, Pearson monitored the social media accounts of students taking its
Common Core tests and had state officials call district superintendents to
have students disciplined for talking about the exam. Barber himself points
out to me that his face appears as “the seventh-scariest person in
education reform” on an anti-Common Core website.

Yet in many parts of the world, low-cost private schools are a big step up
from existing public schools, where buildings may be falling down,
philanthropic grants are used to line local officials’ pockets, and
teachers don’t bother to show up. The father of Nobel laureate and youth
education advocate Malala Yousafzai himself started a chain of low-cost
private schools in Pakistan.

Barber’s thesis is simple: If his company can offer a better option,
millions of families like the Cruzes will vote with their feet. “Technology
and globalization are going to change everything, including the status quo
in education,” he says.

[image: “People think Pearson is this big company going after these markets
in a predatory way,” says Katelyn Donnelly, managing director of Pearson’s
Affordable Learning Fund. “I’m always like, wow, I wish we were milking
money.”]

IT’S THE LAST week of the first academic year at Aki’s new school in Tondo,
and it feels pretty much like the last week of school anywhere. The
students, four classes of seventh graders totaling 123 kids, are excited,
dressed up for a play; their families are happy and proud.

Katelyn Donnelly, my companion in Manila, is the managing director of the
Affordable Learning Fund. “We started here from the ground up,” she says of
APEC, explaining that she and Barber have taken a more hands-on role in the
Philippines than in any of the other school systems that Pearson has
invested in. “We were struggling to find the next couple of schools to
back. So we thought, OK, well, maybe we can build one from scratch.”

Their Filipino partner is Fred Ayala, who opened the first call center in
the Philippines and eventually sold his business to the Ayala Corporation
(no relation). Taken together, call-center and other white-collar work that
can be done over phones or the Internet account for 1 million jobs in the
island nation. Ayala thinks it should be twice that. “The limiting factor
is the supply of skilled talent,” he says. “You have education systems
producing kids that have good academic foundations but are not as
employable as the employers would like.”

Ayala assembled a board of executives with international experience to
create an education company that would mold middle and high school students
into the perfect entry-level employees for foreign corporations. The execs
had the on-the-ground knowledge and connections; Pearson brought the
educational expertise and a $3 million investment.

The biggest obstacle to expanding here, Donnelly tells me, is the dearth of
available facilities within safe walking distance for kids. So APEC decided
to rent a few rooms here and there, close to students, in neighborhoods all
over the city.

Because space is tight, the schools have no nurse’s office and no science
lab. Some have no gym or play space. One amenity offered everywhere is
closed-circuit cameras, a nod to parents’ paramount concern: physical
safety.

Pearson models do vary by setting and the visions of individual
entrepreneurs. All of them, though, save money on teachers and claim they
still deliver a superior education—even though most research shows that
teacher quality is the single most important factor in a student’s
education. Donnelly and Barber draw parallels to US charter schools, which
employ younger, less-experienced teachers without union protections, and to
Teach for America, which places recent college grads into the country’s
most challenging classrooms with just five weeks of training.

“You’re getting younger, not-formally-qualified teachers, so you’re paying
them a lot less,” Donnelly says. “You’re providing a lot of the content and
the training centrally and trying to figure out how you can make them
successful. Each of our investments is doing that in slightly different
ways.” In the Philippines, teachers are supervised by a more experienced
“master teacher” who floats between schools. In its first year, the school
in Tondo had smaller class sizes than the nearby public school, but it
doesn’t plan for it to stay that way.

[pull quote: They may not be dissecting frogs, but they know how to shake
hands and put together a PowerPoint.]

The curriculum, designed with much input from Pearson, hints at innovative,
progressive ideas about education, like interest-driven learning and
collaboration. Every classroom has computers and Internet access. There are
also frequent standardized tests and a custom-built software system that
uses analytics to manage applications, admissions, parent satisfaction, and
student outcomes.

Most important, all instruction is in English; that’s the number one
academic priority the parents I talk to mention. Students tutor each other
in various subjects—Aki is a mentor in English and science but a mentee in
math. Through the Life Labs curriculum, students work in groups to create
public information campaigns on topics like safe smartphone use. They may
not be dissecting frogs, but they know how to shake hands and put together
a PowerPoint.
ABOUT A MONTH after my visit to Tondo, I sit over tea and sandwiches with
Michael Barber in a cozy chamber at his airy offices on London’s Strand.
The white art deco building, overlooking the Thames, sports the largest
clockface in the city, nicknamed Big Benzene for the building’s first
tenant, Shell oil. Barber, 59, is in the midst of treatment for a rare form
of skin cancer. Although he’s pale and thin, with a fresh scar behind his
left ear from surgery, he makes a point of saying he has never felt better.
He spent the previous day cycling some 50 miles in the English countryside.

Barber’s quest to transform education began when he was a young man,
married with three daughters, teaching school in a newly independent
Zimbabwe in the early 1980s. His initial idealism about the yearning of
rural black Africans for education and the aspirations raised by self-rule
faded to frustration with the slow pace of change. Later he became a key
member of Tony Blair’s administration, where he focused on schools, health,
and literally running the trains on time. Next came his stint at McKinsey,
during which he started his work in Pakistan, and then he brought his
mission to Pearson. He depicts working in the private sector as the
ultimate expression of his pragmatism. “Are we going to get more children
education by building more and more public schools?” he asks me. “In the
developing world, that plan hasn’t worked.”

Pearson’s Affordable Learning Fund, on the other hand, is winning the
“ground war” of creating higher-functioning school systems, he says. Now
it’s time to tackle the “air war” of public opinion. “We want to be judged
on our performance,” he says.

The most comprehensive global review of research on low-cost private
schools was published in 2014 by the UK’s Department for International
Development—and it’s worth noting that Barber advised the agency on
education in Pakistan at that time.

The review found strong evidence of better learning outcomes—that is, test
scores—at private schools than at public schools. That’s probably in part
because the teaching is in fact better. Compared with teachers at
government-run schools, which can be dogged by corruption, those at
tuition-charging schools in developing countries are more likely to show
up, to spend more time providing effective teaching, and to be paid
regularly for it.

However, other analyses have pointed out that the students at fee-charging
schools tend to come from families with a little more money, which
generally correlates with higher test scores. There’s an X factor too,
harder to quantify: It could be that for-profit schools attract more
parents like Nellie, who place more of an emphasis on education and whose
children would therefore do better in any setting. Critics of charter
schools in the US make a parallel argument, accusing them of “creaming off”
the most engaged families.

On the negative side, the 2014 review found “weak and inconclusive
evidence” that low-cost private schools are truly affordable or accessible
to the poor.

Research by groups that oppose for-profit schools goes further. The
Privatization in Education Research Initiative reports that when schools
aren’t free, poor students must work one day and go to school the next, and
boys are educated in favor of girls. The official position of many groups,
including the UN’s Committee on the Rights of the Child, is that charging a
fee, no matter how low, excludes the most needy and magnifies social
divisions—like those between Aki and his neighbors in Tondo, for example.

History suggests they are right. Starting in the 1980s, the World Bank, as
a condition of lending, pushed about 90 poor countries to raise revenue by
charging fees to attend public schools. When evidence showed the tuition
was excluding millions of children, a global campaign to abolish the fees
gained traction, and in the early 2000s the World Bank dropped the policy.
David Archer of the international development group ActionAid, who
cofounded that campaign, believes that the power of “free” is one good
reason school enrollment has risen by 50 million worldwide in the past 15
years. “The clear evidence is that when you charge children, the poorest
cannot afford to go,” he says.

Barber has an answer for that too: government-funded vouchers to make
private schools free to the poor. “The question is, how do we get every
child a good education? Not how we fix our public system,” he says.
“Parents know that education for their children is the only route out of
poverty, and they have often been frustrated with public schools. Those who
oppose choice for parents are really only opposing choice for the poor—the
wealthy always have choice.” Vouchers, he says, level the playing field.

Jishnu Das, a lead economist at the World Bank’s Development Research
Group, has questioned the data behind Barber’s claims of great improvements
in Pakistan’s schools. He doesn’t think much of the voucher idea either. He
says it’s perfectly fine for private providers to compete in the free
market, just as they do in the preschool market in the US. If Nellie can
afford $2 a day for her only child to have a chance at a better future,
that’s her prerogative.

But it’s a real mistake, Das says, for government to put a thumb on the
scale by diverting large amounts of cash away from already struggling
public schools toward private providers: “If the government can’t be
trusted to run schools, it can’t be trusted to price vouchers.”

[image: Some fear that Pearson’s privatized school chains, like APEC in the
Philippines (above), abandon the world’s poorest and most vulnerable
students.]

DONNELLY FIRST MET Barber at McKinsey. She worked closely with him in
Pakistan and came with him to Pearson in part to advance the low-cost
model. “People think Pearson is this big company going after these markets
in a predatory way,” she says. “I’m always like, wow, I wish we were
milking money.”

Starting schools in the developing world is far from a quick or easy
buck—margins are thin, costs and red tape must be cut as much as possible.
“It’s a struggle getting these companies breaking even and getting growth
and trying to wade through a mire of regulations,” she says.

The only check on its progress will be the tests that Pearson itself
creates.
Still, in the Philippines at least, the odds favor Pearson’s bet on APEC
schools. The government is in the midst of a huge expansion of its school
system, making 11th and 12th grades compulsory by 2017. That’s 2.7 million
more students in just two years. APEC’s competing low-cost model is off to
a good start, with 24 branches and 3,300 students and plans to add 5,700
more next school year.

It’s hard to argue with the mission of local entrepreneurs like Fred Ayala
who strive to offer a better educational option to their communities. In
Tondo, Aki’s mobile phone and his impeccable English, both of which he’s
currently using to learn about global warming and interstellar travel,
really do look like catalysts for a better life for his family.

But a matchup between a $9 billion public company and the impoverished
governments of developing countries looks lopsided, to say the least. If
Pearson achieves its vision, only the most destitute would remain in public
schools in the world’s largest and fastest-growing cities. Or those schools
would close down altogether, as governments increasingly outsource
education—a fundamental driver of development and democracy, a basic human
right, and a tool of self-determination—to a Western corporation. Teaching
would become a low-paid, transient occupation requiring little training.
And Pearson would try to bring the lessons it learns in Africa and Asia to
education markets in the US and the UK.

One morning in Manila, I had breakfast at a five-star hotel with James
Centenera, who had worked closely with Donnelly and was key to launching
the APEC schools. In his view, for-profit schools have quickly become an
accepted part of the educational landscape here—just another option. “I’m
glad people have stopped asking whether the schools are better.” Startled,
I realized his remark spoke to a mantra of Barber’s: irreversibility.

In other words, create enough momentum around any change and you’re no
longer arguing the merits of your idea. You’re simply treating it as a fact
on the ground and rallying others to the cause.

What makes this a most effective path to change is also what makes it
terrifying and infuriating to critics. Inserting itself into the provision
of a basic human service, Pearson is subject to neither open democratic
decisionmaking nor open-market competition. The only check on its progress
will be the tests that Pearson itself creates.

Barber’s temperament doesn’t allow for a wisp of doubt. He downplays “nice
little initiatives” and “little boutique projects.” To him, the only scale
that matters is global—historic. His heroes are Churchill, both Roosevelts:
leaders who slammed their fists down on the table of world events,
rearranging all the figures on the game board at once. Ever polite, he is
nonetheless unyielding. “I recognize that to get really good things to
happen is a bit of a struggle.” So Pearson’s grand experiment on 360,000
kids continues—capturing just a little more of that $5.5 trillion with each
passing day.
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