Education companies profit from ‘No Child Left Behind’

Educators may disagree on its merits, but there’s no question it’s been great for business.

By: Melinda Sherwood
   Educators may disagree on the merits of the No Child Left Behind act, but one thing is certain — it’s been great for businesses.
   Companies that provide assessment tools, tutoring and professional-training products and services to schools are enjoying brisk business as a result of the Bush administration’s education plan.
   Educational Testing Service in Princeton Township, the global test company that publishes the SAT exam, has beefed up its kindergarten through 12th grade division as a result, and will release several products that tie into the NCLB legislation later this year.
   McGraw-Hill Education, a unit of The McGraw-Hill Companies in New York City, has also responded swiftly to the growing consumer mentality in public education with technology-based products to boost both teacher and student performance.
   And companies like Princeton Review, the 20-year-old test-prep company, are poised to step in with "intervention" services, such as tutoring, when schools fail to meet benchmarks established by states in accordance with NCLB.
   Signed by President George W. Bush in 2002, No Child Left Behind requires public schools to meet state-determined proficiency levels in math, reading and science through incremental annual benchmarks, called Adequate Yearly Progress, with an emphasis on raising the proficiency of students in several subgroups, including students with disabilities, minority students and those with limited English skills. The goal is to have 100 percent of students meet state standards by the 2013-2014 school year.
   Students will be tested in reading and math in grades three through eight, and at least once during grades 10 through 12. By the 2007-2008 school year, schools will also have to administer science tests in grades three through 12.
   ETS identified a growing demand for elementary- and secondary-school products as NCLB was in its formative stage, and managed to secure several important multiyear testing contracts with New Jersey, Puerto Rico and California — contracts worth $242 million in total.
   NCLB’s emphasis on accountability and measuring progress also opened up a potentially huge secondary testing market for ETS. "NCLB has provided an impetus in some school districts and some states to do more diagnostic testing and use ETS’s tools and capability in curriculum development," said Kurt Landgraf, ETS’s CEO.
   "What NCLB high-stakes tests do is point out areas of need," explained John Oswald, who runs ETS’s new elementary and secondary unit in San Antonio, Texas. "They’ll say you have a real problem in mathematics in fourth grade, but that doesn’t help you as a teacher. So in order to improve learning, you need diagnostic tests that provide you information — like this student needs work in subtraction or fractions and this student needs work in geometry. That’s what we see as the secondary market that’s emerging out of NCLB."
   McGraw-Hill Education, the largest pre-K through 12th-grade publisher in the U.S., is also responding to trends in public education with products that not only help teachers track student progress, but incorporate technology in the classroom.
   ProgressPro, an online measurement tool that helps teachers assess student progress, and TechCONNECT, an online program that teaches computer applications to students in the context of subjects like math, language arts and social studies, have an added advantage in that they fulfill another element of NCLB — that technology be part of all classroom instruction by 2006.
   NCLB will also foot the bill for "intervention" services at schools that fail to meet AYP — which was the case for 271 out of 361 schools in New Jersey last year.
   Schools that fail to meet AYP two years in a row will be required to spend a portion of federal funds on tutoring. Test-prep companies like Sylvan Education Services, Kaplan and Princeton Review will be among the top competitors for contracts.
   Princeton Review is offering classroom tutoring in small groups at roughly $35 per hour per student. Other companies price anywhere between $40 and $80 per hour.
   "Before NCLB was passed, this type of product didn’t exist," said Deb Fienberg, Princeton Review’s interim general manager for K-12 services.
   All of the educational companies are expecting teacher assessment and training tools to be big sellers too, since NCLB requires that states develop plans to ensure all teachers of core academic subjects are "highly qualified" by the end of the 2005-06 school year.
   ETS, which publishes the PRAXIS teacher-certification exam already used in many states, is the most obvious winner. "I think you’ll see PRAXIS grow in importance as a certification tool," said Mr. Landgraf.
   ETS has also created professional-development tools like PATHWISE, a mentoring program for first-year teachers, and PATHWISE School Leadership Series, a tool designed specifically to keep superintendents, principals, assistant principals and other administrators on the cutting edge of their professions.