School Privatization Heads To Remedial-Education Class

Despite high-profile failures, businesses say they can still improve public-school management

BRINGING private management companies into the public schools has been a lightning-rod issue from its conception.

Supporters boast such action will boost underfunded schools, providing solutions for everything from deteriorating facilities to a lack of computers. Critics counter that for-profit businesses make extravagant promises for reform while putting the bottom line ahead of solid educational practices.

So last week, when the school board of Hartford, Conn., fired the private business that was managing its schools, it appeared the educators, parents, and teachers' unions who opposed the for-profit enterprise were vindicated.

But even the messy breakup between Education Alternatives Inc. and the 32-school Hartford system - and EAI's rupture with nine Baltimore schools in November - seems unlikely to persuade many educators to abandon such partnerships. Though for-profit education has only a handful of players and every success or failure bespeaks volumes, many say that business involvement in schools remains a viable means for improving education.

''I'm not critical of what EAI was trying to do,'' says Michael Casserly, executive director of the Washington-based Council of Great City Schools, an association of the 50 largest urban school districts. ''But the way they were trying to do it was flawed.''

The theory behind private management of public schools is simple: Many schools have languished under the weight of poor resources and heavy bureaucracy. Private business can move in and shake up entrenched practices, developing new curriculums and balancing budgets. Outsiders can manage these areas in much the same way as they have provided textbooks and busing services.

''We've given this concept the term 'privatization,' but what we're really doing is contracting,'' says John McLaughlin, editor of the Education Industry Report, a newsletter that tracks private businesses in education. ''We're saying: Here's what you do, here's what we want, in order for you to be paid.''

When EAI joined the Hartford school system, it promised to create safer, more-efficient schools and markedly improve student achievement - while cutting costs. But by its second combative year, observers say EAI was tripped up by unrealistic goals and an inability to win the public over to its methods.

To for-profit school detractors, EAI's faltering is taken as evidence that private businesses have no role in public schools. ''I'm hoping this will discredit America's absolute reliance on the marketplace for solutions,'' says Michael Katz, professor at the University of Pennsylvania.

But all sides credit EAI with being a pioneer. And, they say, EAI's trials offer some lessons:

* Less is more. In Hartford, EAI was managing the entire school district - the first time a private company has taken so large a role in a school system.

Deborah McGriff, senior vice president of public-school partnerships of the Edison Project, a for-profit education service, says that was a mistake. ''We don't want to manage a whole district,'' she says. ''We don't even think it's appropriate for a business to manage a whole district. Systems should offer a variety of schools. Parents should have a choice.''

* Negotiate a contract with care. A sound agreement is key to success, says Steve Struthers, an associate of Public Strategies Group Inc., a for-profit business working with the Minneapolis schools.

Improved student results should be the goal, not saving money, he says. In its arrangement, PSG is paid a fixed amount only if the district meets specific, measurable standards. EAI, by contrast, earned its money when it cut the district's costs.

* Make sure the welcome mat is out. The Edison Project requires ''unanimous or near unanimous'' approval by the local teacher's union of any district in which it opens a school. Public Strategies Group credits its smooth sailing in part to support by the Minneapolis Federation of Teachers. In Hartford, EAI blames the teachers' union for conducting a ''campaign of disinformation'' that led to a deterioration of relations between EAI and the community.

Perhaps most notable, however, is the conclusion that the ingredients for a successful for-profit school are no different from those required for a top public school: adequate funding, site-based management, dedicated teachers, and a vision that is shared by the entire community.

The role private companies often play is that of agitator, says Mr. Struthers. More than their ability to cut costs or prune bureaucracy, a private company can bring new ways of thinking into a sometimes static institution.

The Edison Project, the dreamchild of communications whiz Christopher Whittle and now headed by former Yale University president Benno Schmidt, claims to be founded on that basis. All of its innovations, says Ms. McGriff, are based on successful models found in the public sector.

The Edison Project offers its schools - there are four nationwide - a combination of what it says are the best curricula in math, science, and reading. It also allows them to make decisions and spend money free of the confines of municipal government.

At the Edison Project's Boston Renaissance Charter School, that freedom and the fact that they are starting from scratch has allowed the school to create a stunning setting: a bas-relief ceiling graces the library and enough brass sparkles in the lobby to be the envy of Wall Street.

Every classroom boasts a bank of computers, and next month every student's home will be equipped with a computer - courtesy of the school. Students will complete homework assignments on the computer and parents can send electronic messages to teachers.

But while its foundations are promising and parents are complimentary, the school opened its doors only last September, making it too soon to judge the success of innovations such as ordering reading classes by performance, not grade level, and encouraging good behavior through positive incentives.

What remains to be seen is whether businesses can help schools with limited resources and daunting socioeconomic problems. Edison, for one, requires school districts to pay at least the national average in per-pupil funds before getting involved.

Despite its troubles in Hartford and Baltimore, EAI may take on yet another big-city challenge in Washington, D.C. But it is also exploring smaller, more suburban districts such as Wappingers Falls, N.Y., and Hillsboro, N.H.

Gene Baten, EAI's Hartford manager, denies that EAI is giving up on the toughest districts. He asks: ''Is there the will and capacity to focus on the children? Is there the support of the community? It's not a matter of whether it's urban or suburban, but a matter of the conditions that exist in the district.''