Critics Doubt For-Profit Edison Schools' Ability to Profit on Education

Edison Schools, Inc. is under increasing pressure from investors to prove its ability to make a profit. Critics question whether the for-profit education company, which has 82,000 students and 150 schools in 23 states, can make money. Edison's stock is now trading at 33 cents per share, down from its high of $21.68. The company is under intense scrutiny, especially due to its contract to run 20 Philadelphia schools-the largest attempt ever to privatize public education..

Edison's business model is based on the idea that a private corporation can use market strategies and economies of scale to manage a school district more efficiently than the government. Many doubt, however, that a private company can make money in education. "My own view of is that the economies of scale in this industry are pretty tough for the for-profits," said Henry M. Levin, director of the National Center for the Study of Privatization in Education at Teachers College at Columbia University.

The article, entitled "Critics Doubt For Profit Edison Schools' Ability to Profit on Education" appeared in the September 25th edition of the Philadelphia Inquirer .

Published Tuesday, Nov. 19, 2002