Saturday, July 19, 2014

For-profit schools

I’m not opposed to for-profit schools (either in the K-12 or higher ed arena) (I’m a hedge fund manager after all!) – I’m just opposed to the messed up system we have that allows for-profit operators to run amok. We could learn a lot from how Brazil is doing it:

After equally hectic expansion, Brazil’s for-profit institutions have three-quarters of the country’s higher-education market—and fees are low and quality is rising fast. And since a degree boosts wages by a bigger multiple in Brazil than in any other country tracked by the OECD, a club of mostly rich countries, graduates can make back their tuition fees in just a few years.

Soon Brazil will become home not only to the world’s liveliest for-profit education sector, but to its biggest for-profit higher-education firm, too. Last month the antitrust regulator, CADE, approved the purchase by Kroton, the biggest such firm in Brazil, of Anhanguera, the second-biggest, to create a giant with a stockmarket value of around 18 billion reais ($8 billion).

“Quality [in education] is easy,” says Rodrigo Galindo, Kroton’s energetic young boss. “And so is quantity. What’s difficult is combining the two.” The trick, he explains, is to abandon “handcrafted” teaching methods for scalable ones: online course materials and tutors; star teachers’ lessons broadcast by satellite; tightly specified franchise agreements with hundreds of local teaching centres staffed by moderators. The company has invested heavily in “adaptive” learning materials—computerised courses that react to users’ progress by offering further explanation and examples where answers suggest they are struggling, and moving on swiftly where they are not.


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