Waiting for a Miricle
By Travis Durfee

Will Edison Schools’ financial turmoil drag down Albany’s controversial experiment in publicly funded, privately operated education?

Beverly Padgett believes in miracles. When her daughter Oceana came home from Albany School of Humanities one day with a handprint on her neck, Padgett decided it was the last straw. “There was so much trouble up there with kids fighting and hitting each other, pushing people down the stairs,” Padgett says. “My baby came home with so many bruises on her, if I had done it, they would have called Child Protective on me.”

Padgett was also concerned with reports from Oceana’s teachers stating that her daughter was not reading up to grade level.

“She was doing bad and she had been there since pre-k,” Padgett says. “Then she got into the third grade and they tell me she can’t read and they want to keep her back. All they kept talking about was holding her back, not giving her help. She was supposed to be in these resource rooms, but it wasn’t doing anything.”

On shaky grounds: New Covenant Charter School. Photo by Leif Zurmuhlen

Observing the success her granddaughters appeared to be having at New Covenant Charter School, which had opened in 1999, Padgett applied for her daughter’s enrollment at New Covenant. Oceana began classes in 2001, and Padgett began to see improvements shortly thereafter.

“For one thing she had a very, very involved teacher, Miss Perkins,” Padgett says. “If Oceana had problems with something, she’d keep her after school and help her out with the work she needed. Not only that, New Covenant offered a longer school day and a more intense curriculum, and she didn’t have to take a bus out of her community. I’m trying to get the rest of the grandkids in there.”

Since entering her daughter in New Covenant, Padgett is no longer concerned with Oceana’s physical safety. She praises the defined equality provided by the three variations on the school’s navy-blue-and-white uniform, and the enforced uniformity of New Covenant’s mechanistic inter-class travel.

“Wearing the uniforms, everybody is the same as everyone else. No one is picking on anyone else. Everybody looks the same and that is the best thing about it,” Padgett says. “They walk down the hall a certain number of inches apart with their hands folded in front of them, no pushing and no shoving. They all march together.”

While Padgett praises the assembly-line curriculum and standards of behavior provided by her daughter’s new school—the first charter school in the city of Albany—New Covenant, and other publicly funded schools run for profit by private companies, have their share of critics.

Though some view charter schools like New Covenant as the potential saviors of struggling school systems, others see them as a dangerous step toward abandoning existing public schools.

Advocates say these schools, individually charted educational institutions that are publicly funded but privately managed, offer opportunities for innovation and creativity in the classroom, which they allege are stifled in public schools by government bureaucracy. But critics claim charter schools drain resources from school districts as a whole for the benefits of a few.

“The overriding question is whether schooling is seen as a public good,” says Alfie Kohn, an education researcher and coeditor of the anthology Education Inc. “I fear that charter schools may be a step in the direction of defining it as a private good. It is a commodity to be purchased for my children and the hell with everyone else. It tends to fragment and divide communities, rather than pulling us together to think about what makes sense for all of our children.”

But for the community of concerned parents, optimistic administrators and idealistic educators who believed in the school’s mission, the opening of New Covenant (which began teaching grades k-five, and since has expanded to k-eight) was testimony to both the desire for an alternative to the city’s public school system and a willingness to seek that end despite the criticism.

Keeping the faith: Ward DeWitt. Photo by Leif Zurmuhlen

“The school was sponsored by the growing dissatisfaction of about 600 families here in the community who felt their educational needs were not being met,” says Ward DeWitt, cochair of the New Covenant board of trustees. “Children were failing and parents were frustrated for one reason or another. They were looking forward to something different. The goal that we started with was to find the keys for these children to unlock that unbridled thirst for knowledge in a nurturing atmosphere, which was not present for many of these families in the schools that they were involved in.”

Debate about the impact charter schools have on the public school system is expansive, but there is no arguing that New Covenant, one of Albany’s two charter schools, has had its troubles. The school opened and operated for an entire year before its permanent building was ready for use. During the year when New Covenant classes were held in modular trailers off of Third Street, its students scored lowest districtwide on New York state reading and writing tests. And the financial difficulties of its then-management company, Advantage Schools, delayed construction of the school long enough that the Charter School Institute—the branch of the State University of New York that supervises charter schools—placed New Covenant on probation and threatened to revoke its charter. Though New Covenant has been referred to as the “Miracle on Lark Street,” its first year seemed less a miracle than a curse.

With the New Covenant board of trustees on the verge of ending its relationship with Advantage Schools, the nation’s largest educational management firm, Edison Schools Inc., made New Covenant an offer: The company, which manages approximately 150 schools educating 80,000 students nationwide, offered a $13 million loan to complete construction of the school building in return for being hired to manage New Covenant. The offer was accepted, and Edison began managing New Covenant in 2000.

But Edison, too, is having its troubles. In the past year, the company has seen its market worth fizzle and its accounting practices questioned by the Securities and Exchange Commission. As the mountain of bad press and critical academic research piles higher, it seems the company could use a management firm of its own. Times looked so dire for Edison at one point a few months back that the Charter School Institute advised all schools contracted with Edison to consider how to manage their schools should the company go belly-up.

Members of the New Covenant board of trustees said they are in preliminary stages of putting together a plan to keep the school running should Edison Schools fail.

In July 2001, Edison Schools received an uncontested bid from Charles Zogby, the Secretary of Education for the state of Pennsylvania, to evaluate the Philadelphia school district. Many claimed Edison should not have been allowed to review the schools, considering the company was looking to run them.

“The state hired Edison to do an assessment of the Philadelphia school system without competitive bidding,” says Chris Lubienski, professor of historical, philosophical and comparative studies in education at Iowa State University. “They just hired Edison, who did an evaluation, and surprise, surprise: They found that the schools were failing and they needed to hire Edison.”

The alleged chicanery sparked the interest of the U.S. Department of Education, but it eventually deemed the case a state matter and turned it down. The matter remains unresolved; Pennsylvania’s auditor general is continuing the case. But the backdoor deal left a bad impression in Philadelphia, and Edison was awarded contracts to fewer than half of the district’s schools. That translated to less than half of the financial adrenaline boost that investors wanted to see, given the company’s ailing finances at the time. And even Edison will admit to that.

“Wall Street was expecting Edison to win a contract for roughly 45 schools, and we got about half that,” says Adam Tucker, Edison spokesman. “Wall Street is all about expectations. We think it simply had an adverse reaction to our stock, and the rest of the market overreacted.”

Edison’s stock plummeted during the past year from nearly $30 a share to as low as 14 cents. But the drop in stock price did not result from a general distrust of the stock market. Many argue that it was due to a general distrust of Edison.

“Some people have called them the educational Enron,” says Lubienski. “From the beginning, there was a lot of hype about what Edison might do, but they still have yet to turn a profit. They are several years down the line and their investors are getting edgy.”

The Philadelphia debacle, coupled with the SEC’s inquiry into the company’s accounting practices earlier this year, scarred Edison’s financial well-being enough to send investors fleeing. But Tucker says it was just a misunderstanding.

“When Edison reported revenue, we would report gross revenue, all the revenue that we received,” Tucker says. “It has no impact on our bottom lines. It was an accounting technicality.”

The technicality was to the tune of about $154 million, according to The New York Times. The Times reported on May 15 that of the “roughly $376 million in revenue that Edison reported . . . $154 million had never landed in Edison’s bank account.” The company was reporting as revenue money given to it by school districts for expenses like teacher salaries, busing and food costs, but Edison’s revenue-reporting practices, according to the Times, “had no effect on its profits—or more accurately, its losses.”

While Edison’s financial troubles may eventually be chalked up as signs of the times, there also is much debate on the company’s performance in the educational arena. Several studies critical of Edison have been released in the past few years; each has been countered by press releases and/or full-page ads in The New York Times from Edison, rebutting what they say is malicious rumor. But according to one researcher, Edison will go further than buying ad space when it deems necessary.

“Edison tried to sue my university, and it held up our report for over six months,” says Gary Miron, principal research associate at the Evaluation Center at Western Michigan University. Though Tucker says these events took place before he signed on with Edison, Miron, who coauthored An Evaluation of Student Achievement in Edison Schools Opened in 1995 and 1996, says Edison officials tried to stop the release of his findings because they weren’t pleased with the results.

Miron set out to verify if students enrolled in the company’s schools make the large achievement gains that Edison’s annual reports repeatedly indicate. The study states that students in the Edison schools he studied often lag behind district performance and almost always perform below state levels. But Miron says finding that information wasn’t very easy, as Edison often refuses to release information on its students’ achievements to researchers.

“For me, if it is going to be researched, it has to be verifiable and replicable, which means somebody else can take the data and run an analysis and hopefully they’re going to come up with the same results,” Miron says. “All of our data is there; the method section clearly spelled out how we did the ratings. This is research. We can’t see that with Edison’s. You look at the charts in their annual performance reports, and we don’t know how they count, we don’t know how they do that. Now marketing is another thing.”

Though a number of studies side in opposition to Edison, the company claims that a recent federal study trumps the rest. A report released on Oct. 29 by the General Accounting Office says existing academic literature, including Miron’s study, is insufficient to make an accurate assessment of the educational success or failure of schools run by for-profit management firms. But Miron argues it isn’t the findings of the various studies that the GAO report had problems with, but the methods with which those studies arrived at their conclusions.

“The GAO set the bar very high. In the end, they said only one study was of sufficient quality,” says Miron. “The one that the GAO said was up to snuff, this one found that Edison was not holding up to their promise. They found that Edison was doing slightly worse than the control group. The GAO should have said there are four other studies that did not have as good statistical controls, but all of those four studies found the same thing.”

It is a wonder, even to those who the company claims are out to get it, that many academic studies show Edison schools are performing remotely close to comparison groups.

Both Miron and Lubienski agree that Edison presents a well-rounded and cutting-edge educational model. Its curriculum is stacked with some of the most lauded ideas in educational research, including Johns Hopkins University’s highly touted Success for All reading program and a renowned math program designed at the University of Chicago. Classrooms in New Covenant are equipped with sleek, jet-black IBM personal computers. Families with children in grades three and above are eligible to take home a computer for the duration of their child’s education with an Edison school.

“Edison has a good model. It is a sincere model, meant for the whole student,” Miron says. “Just looking at their model, common sense tells me that they’d be doing better than comparison groups, and the big question is: Why aren’t they?”

But Lubienski has two words for another aspect of Edison Schools’ approach: cookie cutter.

“One of the ideas behind charter schools is one size doesn’t fit all, you know,” Lubienski says. “What works in one neighborhood and with one group of kids, doesn’t necessarily work with these others. But Edison is promoting its curriculum as a best practice, so one size does fit all where they’re concerned. A kid could leave an Edison school in one state and find it pretty much the same in another. How effective is it as far as student achievement? That’s controversial.”

But Tucker counters that Edison offers variations on its theme.

“There is a model,” Tucker says, “but the beauty is that it is customizable. Edison is hired to help the board achieve its vision, but you walk into an Edison school across the country and they look very different. We have huge amounts of play. It is not cookie cutter at all.”

But Lubienski says that “customizable” runs counter to the company’s economic approach.

“One of the big incentives for Edison to get involved in this to begin with was for the economies of scale,” Lubienski explains. “If they managed enough schools, they could save money, and that is where their profit margin would be. Part of generating economies of scale means employing standardized practices. They are not going to let local school managers try different things in different areas. They just apply the standard Edison curriculum. That is how they save money.”

And from the very beginning, making money has clearly been the goal of Edison and its founders. The company was formed in 1992 as the brainchild of Chris Whittle, who’d already made a fortune from an endeavor as loathed as it was profitable: Channel One, which broadcasts a “free” news program with reports on issues affecting teenagers in exchange for the undivided attention of 8 million students in 12,000 schools nationwide—which the company then sells to advertisers for a bundle.

“Since Channel One was so successful at that time, he thought he could do similar things with schools—bring marketing-style practices into the provision of education and make a profit out of it,” Lubienski says. “And that upset a lot of people. His intention wasn’t to educate kids. It was to sell Snickers bars to make the endeavor profitable. He wasn’t embraced right away by a lot of educators because he was bringing self-interest into education, a field where a lot of people see themselves as philanthropic.”

Edison’s business priorities were made apparent to New Covenant school officials during the 2001-02 school year, when Edison let New Covenant know that enrollment at the school needed to increase in order to show prospective investors that the school was growing and thus making Edison stock a worthwhile venture. And it was that cents-before-sensibility ideal that drove New Covenant’s last principal, a highly respected local educator, to quit.

Though Eleanor Bartlett speaks highly of the opportunities New Covenant provides, it takes only a breath for her to switch to criticism of what she has experienced in an Edison-run school. After an extended career encompassing various positions throughout the Albany City School District and a seat on the state Board of Regents, Bartlett became principal of New Covenant around the time Edison was hired to manage it.

Bartlett says that the education of the children at the school is compromised by Edison’s focus on the bottom line. Edison’s desire to boost enrollment numbers translates into overcrowded classrooms, she says, which can lead to less-individualized attention for students. Bartlett explains that the first year she arrived at the school, enrollment was 350. The second year it was up to 720. She says Edison’s goal for New Covenant is to pack 900 children into the school by next year.

“So every year is a start-up year because you’ve got all these kids coming in and you can’t settle down to do anything,” Bartlett says. “Maybe there are other ways of paying for the building that are better than adding more children to pay for it.

“I went to the board in December and basically pleaded with them to find other ways to pay for the school without bringing in all the extra children,” Bartlett continues. “And that next month they unanimously voted to bring in the kids. Going to that board and the whole board votes against you, I felt there was no reason to go on. You think there is a cavalry behind you and you turn around and there is nobody but you.”

Bartlett also has taken issue with the Edison curriculum, as she has witnessed both teachers and students struggle with the company’s challenging educational model.

“Their curriculum is very structured,” Bartlett says. “In every curriculum, there is some flexibility for creativity, but Edison’s is very scripted. It is a good curriculum, but in order to be real successful with it, you have to have a good foundation. And if they don’t have a good foundation, they’re going to have difficulty.”

After some waffling, Bartlett retired from her post as principal. Soon thereafter, she discovered that her willingness to fight for the best interests of the school’s children—rather than those of a corprate board on Fifth Avenue—had not gone unnoticed.

Caught in the middle: students at New Covenant. Photo by Leif Zurmuhlen

Bartlett says a number of New Covenant parents asked her to continue in a leadership role with the school by filling a vacancy on the board of trustees. She was appointed, and continues in that position today, hoping that the mounting criticism of Edison doesn’t taint the school and community that has formed around it.

“There is a lot of potential there, and if we find the right way of doing this it can be a great place,” Bartlett says. “There is such a sense of community, and it does offer parents whose children are failing or at risk of failing an alternative. And if nothing else, it creates competition among schools, so they don’t get complacent.”

Bartlett emphasizes her enthusiasm and hope for New Covenant’s mission.

“This, from the start, was a community-type school with parental involvement,” Bartlett says. “A lot of times what was happening was a lot of the kids are coming to us two or three grade levels behind. Parents were finding out that their children couldn’t read. They were saying, ‘We want another choice.’ ”

On Wednesdays during the school year, Beverly Padgett’s daughter Oceana takes part in Delicate Diamonds, New Covenant’s female social club.

“They teach little girls how to be young ladies,” Padgett explains. “They plant vegetables in the community garden, have bake sales to raise funds for field trips outside of school. On the 25th of this month they’re going down to Equinox to volunteer their time in the community to help feed the homeless. It’s a cool little group.”

Oceana has been involved with the Delicate Diamonds, a feminine counterpart to the school’s Distinguished Gentlemen’s set, for two years, and Padgett is pleased with the manners, etiquette and allowance management her daughter continues to learn. Children at the school can also involve themselves in the chess and TV-writers clubs, and New Covenant junior varsity basketball and cheerleading are to begin this winter. And by their nature, the charter school attracts a committed group of adults.

“The school has called for more community involvement, and we have quite a few loyal parents and teachers involved in fund-raisers and community activities,” says Padgett, who recently accepted a nomination as parent representative on the New Covenant board of trustees. “The school being right there, right down the street, it is that much easier for me to keep tabs on how Oceana is progressing.”

Padgett reports that Oceana is making progress in New Covenant, and the school’s test scores suggest that she may not be alone. Though New Covenant initially fared worse than schools in the Albany City School District on New York’s standardized English tests, the school’s scores have steadily increased over the last three years, which is not true of the district average.

While the school’s board of trustees have yet to finalize a contingency plan in the event of Edison’s demise, its members try to be as reassuring as possible. But there are concerns that should Edison go bankrupt, creditors will line up for returns on their investments: the books, the technology—possibly the school itself.

“There is certain information that we need to know as a board before we even go ahead with a contingency plan,” Bartlett says. “For instance, what do we own and what does Edison own? If Edison goes bankrupt, what happens? We don’t know that. You’ve got to know those kinds of things before you even get to a contingency plan.”

Though Bartlett, Padgett and DeWitt have various concerns about the future of the school, they and other members of the New Covenant community continue to express faith in their new covenant, knowing that without it, the “Miracle on Lark Street” could prove much less than miraculous.

“It is new, it is unique, and hopefully it will provide some innovative approaches to this thing we call education, and we can see them replicated or picked up in the public school system at large,” DeWitt says. “The goal is not to compete with public schools, but to try to find the answers to moving our children forward. The education of our children, wherever they are, is probably the most important mission of all of our communities.”