The Learning Curve

Earnest eggheads came to Texas with an idea that for-profit schools can save public education. So far, it ain't working.

A baseball cap covers the closely cropped, strawberry-blond hair of Marc Alvarez, and a Nike logo pendant dangles from the gold chain around his neck. Baggy jean shorts hover below his hips, drooping toward his leather high-tops with their flashy stripes. Top to bottom, he looks more like a teen-ager than a teacher.

At 31, Alvarez has been a teacher for just three years. He brings more enthusiasm than experience to his classroom, suiting him well for a job at Washington Elementary School.

Though hardly a blackboard jungle, Washington is the worst of the lot in Sherman, a modest farming and manufacturing town of 35,000 about 60 miles north of Dallas, just shy of the Oklahoma border.

Built on the unpredictable fortunes of cattle, wheat, sorghum, corn, and a smattering of peanuts, Sherman has no legacy of great riches, though things are improving with a new silicon wafer plant opening south of town.

Washington Elementary is in the town's poorest neighborhood. It is a bunker of a school, built of tan brick, sitting on a quiet street of handsome trees and once-stately homes that have withered since the school opened 40 years ago.

Compared to the town, Washington is diverse, its student body 20 percent black and 23 percent Hispanic. About 70 percent of its roughly 500 students receive subsidized school lunches. The academic performance of the school's students in recent years has not earned better than an acceptable rating from the Texas Education Agency.

Last summer, promises of something better blew into this unspectacular locale, the kind of promises that proved irresistible for an eager young teacher like Alvarez.

They came in the form of The Edison Project, one of the latest bright ideas from the East Coast for reforming public education. The concept, conceived by media entrepreneur and jet setter Chris Whittle, aims to remake public schools in the image of free enterprise.

Whittle's dream has garnered widespread attention from educators throughout the country grasping for ways--charter schools, local control, year-round classes, anything--to bolster the sagging performance of public school students. Benno Schmidt Jr. even left his job as president of Yale University and threw in with Whittle's company.

The Edison Project's vision is simple:The private company seeks to take over schools from local districts and run them its own way, improving the education children receive and making a profit in the process. Whittle wants to replace musty ideas and cumbersome bureaucracies with cutting-edge programs, modern technology, and lean, efficient management, allowing schools to deftly maneuver the ever-changing currents of public education.

Washington Elementary was one of only four schools in the nation--and the only one in Texas--to sign up for The Edison Project's maiden voyage last year.

When members of The Edison Project's brain trust arrived last summer, they promised to create an educator's paradise. Not incidentally, they also hoped that what they achieved in Sherman and three other towns would help convince Wall Street that the company is a worthy investment.

All of the students at Washington would be issued laptop computers, the company promised. Teachers would receive special training in a rigorous curriculum designed to help the students learn their basics--math, reading, and writing--better than before. All of the students would learn Spanish, and there would be more time for art and music.

It would take longer school days, and a longer school year, than before. But the Sherman Independent School District was an easy sell, signing a five-year contract with The Edison Project, and turning Washington Elementary over to the company. The company receives all of the state and local tax dollars that would normally have been spent at Washington. Whatever it doesn't spend educating the children, the company gets to keep.

But as the second year of the ambitious undertaking dawns, The Edison Project's success in Sherman is middling, at best, raising as many questions as answers about the company's ability to achieve its lofty goals.

Since it started, the company has found itself plagued with a litany of problems all-too-familiar to veterans of public education. Teachers left in frustration. Books weren't passed out on time. Classrooms were more crowded than expected. The school's first principal was transferred from her job. And some parents pulled their children from the school.

Most significantly, student test scores actually dropped, and The Edison Project overran its operating budget, rendering the quest for profit elusive.

The students didn't score better on tests. The company didn't make any money. The Edison Project flunked both of its major tests.

Company managers offer an array of explanations for the troublesome first-year performance. They note that the company has had fewer problems with its three other schools--in Mount Clemens, Michigan; Boston; and Wichita, Kansas.

They point out that the company started its Sherman contract in February 1995, later than it would have liked, and had to open the school in August, earlier than other districts.

Sherman school district administrators also acknowledge that they didn't foresee an increase in enrollment that pushed the student count to 517 at its highest point last year.

Given the time constraints and swelling student population, the company didn't do too badly, supporters say.

"It was heroic that we did as well as we did," says Janet Hickey, a general partner in the Sprout Group, a venture capital firm that has poured $12 million into The Edison Project.

"The issues and problems in the school were not really problems of instruction or quality of teachers; they were about organizational building," says John Chubb, the director of curriculum for The Edison Project.

Even without the unanticipated problems, Chubb and Schmidt now say, observers shouldn't have expected a new curriculum to produce results, especially better test scores, in just one year. "You don't change a cohort of kids' mathematical abilities overnight," Chubb says.

But even as the company casts about for more schools to manage--and more investors--it is obvious that free enterprise offers no quick fix for public education.

The Edison Project, in fact, finds itself in much the same position as Alvarez: eager, fledgling, and offering more dreams than experience.

Alvarez soon will begin teaching at the school for the second year. He has spent his summer devising an Internet home page for the school. Alvarez believes that The Edison Project still affords him more educational tools than he could have imagined at his previous school.

"People think things happen right away. They don't," he says. "It takes time."

Marc Alvarez is exactly the kind of teacher The Edison Project wants. Chris Whittle, Edison founder and guru, says he knows this from swapping messages with Alvarez through the company's Internet chat room. "He's great," says Whittle.

That the 49-year-old Whittle knows, much less e-mails, a teacher in North Texas speaks volumes about his fervor for his for-profit education venture.

Whittle came to this curious calling from a background that gave little hint of a future running elementary schools. Before he unveiled The Edison Project in 1991, Whittle owned Esquire and Seventeen magazines, and founded the cable educational television station Channel One.

He lived the quintessential jet-setter life frequently chronicled in the pages of his magazines, with lavish homes in his company's hometown of Knoxville, Tennessee, and in the Hamptons. He had an apartment in Manhattan at the Dakota, where John Lennon lived. In 1990, Whittle married Priscilla Rattazzi, the niece of Italian industrialist Gianni Agnelli.

Whittle's business world, like his life, was populated with the glitterati. To help run his wide assortment of ventures--which at one point included a women's pro baseball team--Whittle hired the likes of William S. Rukeyser, the former editor of Fortune magazine, and former Jimmy Carter advisor Hamilton Jordan.

Whittle had what were often seen as wild ideas: a commercial television channel directed at schoolchildren, one-issue magazines for doctor's offices, and, of course, his innovative schools.

In the late 1980s, Whittle's far-range thinking attracted an impressive array of investors. Time Warner, for instance, invested more than $185 million in his ventures. The electronics corporation Phillips Electronics, U.S. subsidiary of a Dutch conglomerate, also poured in considerable sums.

Throughout the summer and fall of 1992, Whittle began assembling the intelligentsia he wanted to help him launch The Edison Project. He hired former Yale President Benno Schmidt Jr. and a truckload of other celebrity thinkers, vowing to transform--for a profit--the way America educates its children.

Schmidt's hiring created a splash on the pages of Newsweek, Time, and The New York Times, but Whittle attracted a long list of other well-credentialed academicians for his fledgling company.

John Chubb, part of the early group, was a Brookings Institution fellow who had co-written Politics, Markets and America's Schools, a book that launched much debate about the standards of schools.

Journalists were also among those hired, including Lee Eisenberg, a former editor of Esquire, and Dominique Browning, a former editor of the back-of-the-book section at Newsweek.

During the heady early days, when The Edison Project was all plans and promise, Whittle would bring his flashy hires together at his sprawling corporate headquarters in Knoxville. By 1993, the press began reporting the company's bold plans: Whittle was talking about spending $2 billion to set up programs for 100 campuses, serving 150,000 students, by 1996. He was planning on educating some 2 million students by the end of the decade.

But by the time Business Week dubbed Whittle "a New Age Marshall McLuhan, or an old-time Elmer Gantry," he was already in financial trouble, and those early projections seemed ludicrous.

Whittle's finances on other fronts began to fall to pieces, and by early 1995, he sold all of his companies except The Edison Project.

As he lost all of his other significant commercial assets at fire-sale prices, Whittle was forced to substantially scale back his vision for The Edison Project, and to scramble for money.

Many of Whittle's one-time backers, including Time Warner, soured on what were now perceived as his wild ideas.

Looking to raise cash to keep his plan afloat, Whittle found a new investor, the Sprout Group, a New York-based venture capital firm that agreed to put up $12 million.

Schmidt ponied up $1 million of his own money. ("When I joined Edison, I was putting something much more important than money into it--my career," Schmidt says). Schmidt also convinced two other investors to contribute $1 million apiece.

Whittle sold his Dakota apartment to raise cash for the venture, and poured $15 million of his own money into the project. "This is his passion, his baby," says Janet Hickey, general partner of the Sprout Group.

All together, Whittle managed to raise $30 million in new capital by March 1995.

By the time The Edison Project actually started managing schools later in 1995, it had burned through some $75 million in development funds, and the scale of its operations was much more modest than the grand visions originally concocted at Whittle's Tennessee estate.

Though Whittle had dreamed of starting out with 100 schools in the program, in its first year the company landed contracts at only four schools. There was one each in Boston; Wichita, Kansas; and Mount Clemens, Michigan.

And then there was Washington Elementary School in Sherman, Texas.

Bob Denton, the superintendent of the Sherman Independent School District, first heard about The Edison Project at an educator's convention in 1993, when he ran into Bill Kirby. Whittle had hired Kirby, a former Texas Education Agency commissioner, to drum up clients for the project.

Denton had been in Sherman for only one year; he had come from the district in Dripping Springs. He was looking for ways to fire up the slow-moving SISD, and The Edison Project seemed an opportunity to do that.

"This was a real old, stodgy district. Change didn't come easily," recalls Phil Garrett, executive director of planning and budgeting for the SISD.

Denton liked the idea of The Edison Project, but didn't want to force it down the throats of his new administration. So, at first, Denton simply passed out written information on the project to all six elementary school principals in his district. Three of them responded immediately: They wanted no part of it. Denton pushed no further.

But principals at the elementary schools in the town's wealthiest and poorest neighborhoods were receptive.

It was Denton's call to put the program in the poorest neighborhood, at Washington Elementary. "It just kind of sifted out the needs at Washington," he recalls. The school had high student turnover, and its achievement test scores were slipping.

The Edison Project managers, who were eager to sign up as many schools as possible for their first year of operation, willingly let the SISD superintendent make the decision. "The truth is, they were desperate to get some schools open," recalls SISD administrator Garrett.

The SISD agreed to hand over $2.1 million a year--about $4,500 per student--in state and local tax revenues to The Edison Project.

Even in those early days, the town had its skeptics. John Blystone, a SISD school-board member who has since resigned, voted against signing the contract with the company.

Blystone says he wanted someone else to be the guinea pig. "My position was, 'Let's wait and see. They'll be interested in us in a year,'" he recalls.

But the rest of the board approved the deal at an April 1995 meeting, and The Edison Project got its franchise in Sherman.

All was happy at the ribbon-cutting ceremony for the new school the next August. The Edison Project managers became Sherman's heroes. Whittle and Schmidt accepted keys to the city, and the national press trundled to Sherman to record the moment. Washington Elementary was going to be "one of the most high-tech schools in America," Schmidt told a reporter from The New York Times.

But behind the scenes, the company was already racing to keep up with its plans. The hurried nature of the school's opening created stress from the outset. "They were literally sweeping the floor as the parents walked in," says Gail Hoogendoorn, who was then a teacher of bilingual education and recently was named the new principal of the school.

Signing up with Sherman so late, The Edison Project managers had been left with only four months to interview, hire, and prepare teachers for the August opening. (Sherman schools this year start later, in September, due to districtwide building renovations.)

Rushed, The Edison Project managers also got news late about increased enrollment. In those first weeks, they realized the school had at least 25 more students than expected, says Manuel Rivera, The Edison Project's director of schools, who directly supervises the principals. The school had to install a portable classroom and hire five more teaching assistants.

As Washington Elementary's organizational problems mounted, Rivera, a 20-year veteran of the well-respected Rochester, New York, school district, began to come down to the school so often--two or three times a month--that he had time to form and reform his opinions about the most efficient route from the Dallas/Fort Worth International Airport to Sherman.

But for Linda K. McDougal, a fourth-grade teacher, The Edison Project managers were not coming often enough. The school wasn't functioning effectively, she says, and the managers weren't correcting the problems. Even the simplest of matters, she says, became impossible in the chaotic environment. A month after classes began, McDougal recalls, her class still didn't have the books it needed, because the principal hadn't distributed them.

When Chris Whittle himself observed McDougal's class in September 1995, the veteran teacher recalls, he complimented her on her math lesson. It was exactly how The Edison Project's chosen program, known as the University of Chicago math system because of its origin, was supposed to be taught, McDougal recalls Whittle telling her. "I said, 'That wasn't Chicago math, that was fly-by-the-seat-of-your-pants math because we don't have the books.'"

Her class got its books the next day, McDougal says. But she wasn't satisfied. "When he came down, it got done. But you couldn't always go to him," McDougal says. She did contact Whittle by e-mail, as he tells both teachers and students to do. But she resented the fact that the local leadership wasn't more effective, she says.

In the winter, McDougal threw in the towel and asked for a transfer. She believed she was working too hard for too few results, hampered by leadership deficits at the school. "I was coming in at 7 [a.m.] and leaving at 8:30 [p.m.]. I don't mind that. But there needs to be a movement forward," McDougal says.

Another fourth-grade teacher, who declined to be interviewed for this story, left at the same time.

The two teachers' defections created significant disruptions. Former Principal Ruby Jo Williams, who declines to discuss the matter in detail, says that she believes upheaval in the fourth-grade teaching ranks ultimately hurt student performance on standardized tests.

By this summer, The Edison Project looked back on a school year that did not inspire confidence.

Five of the 31 teachers who started in the program had left, and two more scheduled to teach this year have asked the district for transfers.

Last April, the out-of-town Edison managers announced that they were replacing Williams, a 27-year district veteran, as school principal. Williams has been moved to a somewhat nebulous job in recruiting and community development for the district, and it is unclear whether The Edison Project or SISD will continue paying her salary.

Hoogendoorn, an English-as-a-second-language teacher from Washington Elementary, was chosen in early August to take over the principal's job, shortly after the company received the worst kind of news from the Texas Education Agency: disappointing scores on the Texas Assessment of Academic Skills (TAAS) tests.

When Edison launched its program at Washington in August 1995, Schmidt had said he wanted more than half the students to outperform similar Sherman students on the TAAS tests.

But TAAS scores from the 1995-1996 academic year for the school's third and fourth graders--the only group given the tests--showed that the school's performance actually dropped, nearly 6 percentage points on the reading portion of the test, 7 percentage points on the mathematics sections, and 2 percentage points on the writing exam.

And Washington did not fare well on the financial front, either. The company overran its $1.8 million operating budget by more than 12 percent, according to investor Hickey of the Sprout Group. That doesn't include the $1.5 million the company sank into start-up costs.

As the school's new principal, Hoogendoorn hopes for better this year. She plays down the teacher departures as normal turnover. Teachers at the Edison-run school are expected to work as a group. "Have you ever brought six people together? It doesn't always work. Teamwork doesn't occur automatically," Hoogendoorn says.

Says The Edison Project's Schmidt, "Our schools are not for all teachers--not even for all good teachers."

Undoubtedly, The Edison Project school suits Marc Alvarez, whose full cheeks and slightly bent pug nose--like his hip dress code--add to his youthful appearance. Alvarez still overflows with enthusiasm for the school-management company.

After teaching for one year at a traditional public school in Sherman, Alvarez says The Edison Project is dramatically better.

At his old school, Alvarez says, he wanted to teach the way he does at the revamped Washington Elementary, but he did not have the support or materials. "I couldn't do what I do now, but I tried to do it," he says.

He better be eager. Despite Alvarez's relatively scant experience, Hoogendoorn has designated him the point man to help shore up the math curriculum. "He believes in the concept," she says. "He is a dedicated, reflective teacher."

From the outset at the school, Alvarez has enjoyed the time he spends on professional development, new technology, and the classroom materials he has been given to help teach his kids.

Before the school year even started last August, Alvarez, like his colleagues, attended four weeks of training in the new curriculum. He then spent one week at Lake Geneva in Wisconsin at a conference the company hosted for all its teachers from throughout the country.

Alvarez says he has finally been given the physical tools he has always wanted for his classroom to teach his children math, things like geometric shapes, scales, multisided dice, and play money. The Edison Project's math curriculum uses everyday issues to get across math concepts. Primary-grade students, for instance, might produce their own personal telephone books to work on recognizing and drawing numbers.

Alvarez also likes the extra time he has under The Edison Project's design. At his old school, Alvarez spent 60 minutes a day reading with his class. Now, the longer day allows him to spend 90 minutes. He and other teachers in the primary grades form a team to separate the children into small groups. Under The Edison Project's plan, aides and music and art instructors all chip in at reading time, so the student-teacher ratio is extremely low.

The extra hours and days also mean Alvarez gets more professional development during the school year. At his old school, he met with other teachers to discuss his work for 45 minutes a day. Under The Edison Project's plan, he has doubled that to 90 minutes a day.

Last year, Alvarez's class won the friendly competition that was waged to get all Sherman school students equipped with laptop computers. The Edison Project expects all students to get their parents to attend a computer training class before the children can tote their Macintosh notebooks home. Alvarez says he got his kids so excited about the machines that the children all nagged their parents to get trained. Because his class was the first to get all families on-line, his students got to celebrate, at the school's expense, with a pizza party.

Once the kids and parents were on-line, Alvarez took full advantage. He posted his weekly lesson plans on-line so all parents could see them and comment. He e-mailed some parents almost daily.

In one such note, for instance, Alvarez gave parents the following bulletin: "The roughest day we've had in a while. [Your child] sits by himself at the back of the room, and is not allowed to socialize with others or take part in any special activities until he earned 10 points."

Alvarez also e-mailed good news. "We need more kids who come to school so eager to learn and be a good friend to those around her," Alvarez wrote to one parent.

This year, Marc Alvarez and Gail Hoogendoorn again will try to provide the proof for The Edison Project's theories. For now, Washington Elementary is not one of the company's shining stars.

In a press release that The Edison Project sends reporters, the Sherman school is curiously absent from a list of "Evidence of Customer Satisfaction in Edison Partnership Schools."

Edison Project spokeswoman Debra Doorack says Sherman was excluded because the school had not yet turned in some necessary data.

It seems clear that the three other schools managed by the company last year chalked up more impressive results than did Sherman.

Wichita, specifically, is where the company chooses to dispatch national news reporters who want to write stories about the company's first year. In Kansas, the student turnover was reduced from 36 percent to 7 percent, and 320 families are on a waiting list. Some 97 percent of the parents attended teacher conferences. When The New York Times wrote about the school earlier this summer, the headline for the story was one The Edison Project executives might have written themselves: "Grading For-Profit School: So Far, So Good." (The Times reporter did not mention any visits to Sherman.)

As another measure of its progress, The Edison Project has scheduled openings of eight new schools this fall, including four new elementary institutions and four middle schools. In that count is a classroom wing at the Dillingham Intermediate School in Sherman, which The Edison Project has contracted to manage. The company's most modest expansion plans are in Sherman.

Notably, none of the other new schools is in Texas. "I think because Sherman wasn't the rousing success, we haven't had it as a reference point," says investor Hickey.

School economics also make Texas a harder territory for The Edison Project. The state has lower per-student spending and higher teacher salaries than some other regions. "I think there are a lot of places it will work in Texas, but it's close to the line,'' says Schmidt.

Texas also is the only state, obviously, where The Edison Project must contend with TAAS scores. The testing, instituted as part of an earlier statewide education reform, is decried by some as unfair. TAAS tests are the bane of some teachers, who complain they spend more time teaching for success on the tests than success in life. But they remain the single most visible measure of achievement in Texas public schools, and The Edison Project has to live with them like every other school administration in the state.

Washington's slip in the TAAS results this year unquestionably hurt The Edison Project's reputation and smarted the company. "Someone asked me," says departed Washington teacher McDougal, "'Did you expect them to go up?' I said, 'No, but I didn't expect them to go down.'"

The Edison Project's Chubb says the company is paying an independent service to conduct another, more comprehensive test in reading for its school's students, as well as for a control group from the rest of the Sherman elementary-age population. He will put more stock in those results, Chubb says, than the quirky TAAS. Standardized test scores typically dip with a new program, Chubb and other proponents of The Edison Project say.

Still, in Texas, TAAS is the accountability measure. "You could have a lot of explanations, but they sound like excuses," says SISD administrator Garrett.

Pressed, even Chubb concedes: "The TAAS were not good. We'll be looking closely at that next year."

There are four years left to The Edison Project's contract in Sherman, and a lot is riding on those years: the education of Marc Alvarez's students and the future of Chris Whittle's dream of molding American public education to his vision.

No one should expect The Edison Project to quit Sherman anytime soon. "When we go into a district, it's a long-term relationship," says Whittle. "I'm not going to tell you we would never leave, but it would only be under dire circumstances.

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