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Want to save your district $3 billion on edtech?


Study shows a lack of pricing transparency from ed-tech vendors is a key culprit in overspending

School districts are routinely being overcharged by at least $3 billion on ed-tech products, including hardware and software, each year–the equivalent of 54,000 first-year teacher salaries, according to a new study from the Technology for Education Consortium (TEC).

The study on ed-tech purchasing reveals schools spend an estimated $13.2 billion on ed-tech products each year. This includes $4.9 billion on hardware such as tablets, laptops and desktops, along with $8.38 billion on instructional and non-instructional software and content.

The authors note that a lack of price transparency makes it difficult for districts to find cost-efficient options to fund their technology initiatives, resulting in over-spending.

It analyzes pricing data from 130 school districts around the country. TEC found that prices varied between 20 and 40 percent for hardware and software products, with no correlation to district size.

Next page: Huge price discrepancies when different districts purchase the same iPad, Chromebook bundles

The study illustrates price variations for iPads, Chromebooks, and Accelerated Reader 360 licenses. A key component of this price variation came from seemingly random discounts applied by vendors to the total cost of purchases, which keeps actual price paid per user or device unclear.

For instance, districts can pay up to $115 more for the same iPad bought by another school district. Between April and June 2015, schools purchased 1.1 million iPads. Based on the study’s findings, the per unit price difference varied between $112-$115 for popular iPad models in 2015, such as the iPad Air 2 16GB and 64GB. If districts saved $112 per unit price difference, that would equal to around $500 million saved in iPad purchases, according to the study’s authors.

The same can be said for Chromebooks, where price differentiation concerns warranty terms and management software bundles. Some districts paid up to $90 more than other for the same device and service packages. If all districts paid a uniform price, they could have collectively saved roughly $500 million, the authors estimate.

“Quantifying the amount of money that districts can save is another step toward a level playing field,” said Hal Friedlander, co-founder and CEO of TEC. “Vendors are able to overcharge school districts because it’s incredibly difficult for district administrators to know if they are getting a good price with the existing convoluted pricing structure. We need more transparency in the ed-tech market.”

TEC currently partners with more than 190 member districts, representing 4 million K-12 students and approximately $400 million in ed-tech spending. To collect district pricing data, member districts share contract and pricing information that TEC analyzes–and fully anonymizes–to produce the national price reports. TEC’s membership initiative is designed to transform district technology procurement into a more efficient, cost-effective use of taxpayer funds. Currently, districts can join TEC at no cost.

The full report can be found here.

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Laura Ascione

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