At an estimated $2 billion per year, the market for Supplemental Educational Services (SES)–the voluntary tutoring programs that must be offered to students who attend certain underperforming schools, as required by the No Child Left Behind Act (NCLB)–has become one of the hottest money-making propositions in public education.

Since NCLB’s inception in 2001, hundreds of educational service providers have lined up to cash in on the law’s prove-it-or-lose-it philosophy, which threatens dire consequences for any school that cannot boast improved test scores for all subgroups of students.

Countless salespeople have been dispatched to school communities from coast to coast in hopes of wooing parents and eligible students with incentives ranging from cash prizes to basketball tickets. But as the competition for tutoring dollars heats up across the country, some industry watchers question whether SES might soon be headed the way of another multibillion-dollar school funding initiative that has taken recent heat for fraud, waste, and abuse: the eRate.

“It’s a lot of money, and it’s a lot of money going into an industry fast,” said Patty Sullivan, director of the nonprofit Center on Education Policy (CEP), a Washington, D.C.-based organization that recently released a report on NCLB, including an analysis of the rapidly expanding SES program.

Compounding the problem is that many of these school systems don’t fully understand the economics of for-profit companies, she said. Like the eRate, the federal tutoring provision has opened the door for corporations to work with schools in a capacity the players are all unfamiliar with.

“There’s a lot of working together and getting to know each other, with plenty of opportunity for one to take advantage of the other,” Sullivan said.

The eRate, the $2.25 billion-a-year federal program responsible for providing discounted internet and telecommunications services to eligible schools and libraries, has been the subject of much conversation on Capitol Hill, as lawmakers have sought to rid the program of the waste, fraud, and abuse that have marred its reputation in recent years. Critics say lax oversight is to blame for the program’s troubles.

Though the programs rival each other in size and impact, Sullivan said there are also some stark differences between the two–differences that should help SES avoid the rampant misuse that continues to plague the eRate.

Unlike the eRate, where money flows from the federal government directly to the service providers, “the state is the primary entity that is responsible for the entire operation” of the SES program. Sullivan said that alone should make the program more accountable.

But Congress isn’t taking any chances. Hoping to avoid a repeat scenario with the equally lucrative federal tutoring industry, lawmakers in April held their first-ever hearing on SES.

In a meeting with members of the House Committee on Education and the Workforce, educators and service providers agreed that greater accountability is needed to keep the program in check. Despite the industry’s rampant growth, participants said, it’s difficult for schools and parents to judge the effectiveness of one program versus another. In all cases, they said, more regulation and oversight are needed.

“We, along with all state-approved providers, welcome full accountability for the results of SES programs,” said Jeffrey Cohen, president of Catapult Learning Inc., which provides tutoring for students in 35 states. “We believe there are several accountabilities inherent in the process of implementing SES programs.”

Cohen said that, under law, SES providers must be accountable to the districts in which they provide services. He said providers also must be accountable to the parents who select the programs for their children.

“Still, we realize that these ‘built-in’ accountabilities are not enough,” he said. “Under NCLB, the state has the responsibility to approve providers and evaluate their effectiveness.”

To do that more effectively, Cohen suggested that states use a variety of methods, including standardized test results, survey data, and compliance with provider applications.

Donna Nola-Ganey, assistant superintendent for the Louisiana Department of Education’s Office of School and Community Improvement, offered an overview of how Louisiana tracks and monitors SES providers. The state uses its web-based Student Tracking and Reporting System (STARS), an internally developed database, to document whether a particular SES provider complies with the tutoring model approved by the Louisiana Department of Education, including class sessions, student attendance, and academic progress on assessments.

The U.S. Department of Education (ED) also has set up a division to monitor SES programs and provide guidance to parents and teachers. Called the Supplemental Educational Services Quality Center, or SESQ, the organization is directed by the American Institutes for Research. Its web site–http://www.tutorsforkids.org–aims to improve overall coordination of the program while helping parents make the right choice for their children.

And those choices have grown exponentially over the last two years. For-profit companies make up the bulk of the approved service providers in most states, but school districts–and even two teachers’ unions–have entered the fray.

In March, one of the nation’s largest metropolitan teachers’ unions was approved to provide assistance to students marooned in under-performing schools. The United Federation of Teachers (UFT), the influential union representing more than 80,000 educators in the New York City public school system, will begin tutoring students this fall. The program will be added to a list of at least 50 other tutoring services provided by the city for parents to choose from. UFT joins the Rochester, N.Y., teachers’ union as the only unions in the nation to successfully to enter the federal tutoring landscape, which has been dominated since the law’s inception by a bevy of for-profit service providers.

Joseph Colletti, UFT’s special representative for educational programs, believes his organization’s relationship with city teachers–combined with its knowledge of the local education landscape–will help bridge a burgeoning “disconnect” between daily classroom lessons and federally mandated interventions taking place after the bell.

“A lot of these third-party providers are very reputable, and most of them are doing a great job,” explained Colletti, “but they aren’t rooted in the New York City school system.” Colletti says UFT’s program will help allay parents’ concerns–ensuring the remediation students receive outside of school is aligned with what goes on inside the classroom.

Under NCLB, schools that fail to meet their state’s standards for Adequate Yearly Progress, or AYP–a set of benchmarks for annual improvement established individually by each state–for two consecutive years are required to put away five to 20 percent of their federal antipoverty money, known as Title I funds, for the purchase of SES programs. The funds have given way to a whole new industry in education–one that analysts estimate could exceed $2 billion a year within the next couple of years. Since the law’s inception in 2001, more than 1,800 SES providers have lined up across the country to begin taking advantage of these revenues.

Though eligible students have been slow to sign up for SES programs–less than 18 percent of eligible students reportedly signed up in 2004-05, according to a March report from the CEP–service providers and schools have been engaged in building awareness around SES eligibility and expect those numbers to climb significantly in the coming year.

In New York City, supplemental service providers can reap as much as $1,800 per child. Multiply that number by the 80,000-plus students currently enrolled in SES tutoring programs in the nation’s largest school district, and the sum amounts to more than $144 million worth of services in New York City alone.

With so much taxpayer money up for grabs, it’s no wonder a cadre of service providers has begun aggressively courting school systems and parents for their business. Aside from recruiting district teachers to help deliver their services, companies trying to break into big-city markets have reportedly begun offering everything from cash to gift cards as incentives to choose their programs over the competition.

No law prevents companies from wooing parents with gifts, but critics of the program say some service providers go too far.

Last year, for instance, police in Clark County, Nevada, actually had to escort a group of overzealous service providers from a school where they were soliciting parents, according to an example cited in the CEP report.

Parents also have raised concerns over aggressive marketing tactics in New Jersey and New York City. Officials in New York have since opened an inquiry into the practices of every provider in the district. In New Jersey, educators have adopted a code of ethics designed to keep providers from overstepping their bounds with parents. The guidelines, provided by the nonprofit Education Industry Association, include agreeing not to compensate school district employees personally in exchange for the use of school facilities and not offering students any form of compensation simply for signing up. The guidelines, however, do allow providers to dole out “reasonable” incentives, including door prizes and refreshments to students for achieving certain performance and attendance benchmarks.

To compete with the myriad of SES providers already doing business throughout the city, Colletti said, the UFT will engage in an aggressive marketing campaign that includes running several ads with local newspapers and television stations, but the union will not “do any wining and dining of parents.”

Rather then spend additional money on “questionable” marketing tactics, Colletti said, the UFT–which does not intend to turn a profit on the endeavor–would prefer to pump additional money back into the program, where it can do some good.

When the UFT’s tutoring service rolls out in the fall, it will provide targeted remediation for struggling students in grades 2-5. Though details about the exact nature of the program were scant at press time, Colletti said each tutoring session will be directed by a certified city teacher and will be aligned with district standards. Using some of the money it intends to save on marketing, the union also will provide workshops for parents and professional development courses for teachers–a few added benefits, he said, that are rare among third-party providers.

The union decided to move ahead with its tutoring program last year after the city’s own Department of Education was forced to abandon a similar project for fear of reproach from the federal government. Under the law, only those districts that meet their state’s AYP goals are allowed to provide such services. Realizing it would fall short of the standard, the district closed down its tutoring program.

The move allowed New York to avert the sort of controversy already erupting in places such as Chicago, where last December school officials received a letter from the federal government demanding that it halt tutoring services for as many as 80,000 students–about half of whom reportedly were receiving tutoring via the district.

Upon receiving the letter, district officials reportedly were stunned. The news elicited outrage from Chicago Public Schools (CPS) Chief Executive Officer Arne Duncan, who branded ED’s ruling “a slap in the face” and an “appalling disservice to the children of Chicago.”

But ED held its ground, stating that CPS should have taken more time–and made sure it was in compliance–before deciding to tutor students itself (see “SES ruling leaves thousands behind“).

While schools located in underperforming districts cannot provide their own tutoring services, teachers that work within these schools are allowed to serve as tutors, as long as they are contracted out by a state-approved entity.

“If you hire a plumber to fix your sink and he doesn’t deliver, you don’t reward him by hiring him to fix the bathtub,” said Committee Chairman John Boehner, R-Ohio, during the April hearing. “The same principle should apply when it comes to school districts.”

He continued: “The tutoring options made available to students through No Child Left Behind are meant to provide a supplement for the questionable education those children are receiving from their public schools–not an expansion of that questionable education.”

Realizing numerous service providers already were recruiting teachers to staff their various SES programs, the UFT decided it was time to apply its influence.

“We feel we can offer as good or better services than some of these third-party providers,” Coletti said.

Links:

United Federation of Teachers
http://www.ctredpol.org/

Education Industry Association
http://www.educationindustry.org/

Center on Education Policy
http://www.ctredpol.org/

Chicago Public Schools
http://www.cps.edu/

New City York Department of Education
http://www.nycenet.edu/default.aspx

U.S. Department of Education
http://www.ed.gov

Supplemental Educational Services Quality Center
http://www.tutorsforkids.org/resources.asp