the battle over school choice

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interview: david brennan


Brennan is Ohio's largest operator of a publicly funded, for-profit school business, the White Hat Management Company, and an Akron, Ohio entrepreneur, developer, attorney, and major Republican Party donor. Brennan helped initiate the Cleveland voucher program in the mid-1990s and his White Hat company is now a major operator of Ohio charter schools, including Hope academies and Life Skills schools.
Give me an overall picture. What's the whole purpose of life skills?

Life skills is based on the premise that a large number of students are unable to accomplish their high school education in the traditional high school, either public or private, for whatever reason. Some alternative method of dealing with these persons is necessary. We have discovered that there is no other alternative for these youngsters. If they drop out or are forced out of high school, at any age, there is no place for them to go. . . .

This program, as I understand it, is basically organized around computer instruction? What's the thinking behind that?

The organization is really around individual instruction plans, which are tailor-made for computer delivery. You can do the same without computers, but that is tutoring one-on-one, which is economically prohibitive. So you end up with a technology tutor. Much of the learning process that a student goes through is learning, not teaching to. The student knows certain basic things, and then has the motivation and the ability to advance at his or her own pace. . . .

A traditional school requires so much seat time to earn a credit hour. In our program, the student can test out of a credit hour. If, in two weeks, a student has absorbed all the material necessary to evidence the mastery of that subject, they get the credit hour and move on. So the very bright students here are moving very, very fast through the system. All the students tend to be good in one thing and not good in others. They really rush through the programs they're good in, and then they spend more time in the ones where they need to spend time. The individualized nature of the instruction is what we start with here. The computer just happens to be the best way to deliver that.

To the extent that you can measure these things, is this working so far?

Yes, and your qualification is important--"to the extent you can measure these things." Data collection is what we're about now, trying to understand what is happening with the students that we have. We have a fairly large number that don't last very long, that don't stay here. I don't want to quote numbers because I'm not that close to it. But it's more than I would like it to be. We have a larger number that are staying here and are tackling their problems and are proceeding, who taking the state proficiency examination and passing, attaining their credit hours and who are going to graduate. . . .

You were not trained as an educator. In fact, you came at this from a very different career. Give me a little background history.

I began my companies 25 years ago. We discovered early on that our company employees were terribly undereducated and could not advance at the pace of factory automation on the factory floors, due to their own limitations and basic skills. So we went into the learning center business at our factories. We discovered early on in the process that, again, computer-aided instruction was a wonderful tool to bring the employees along, because they saw a direct connection between being able to work the computer system successfully and what was happening to their jobs on the factory floor. We had great success with that. . . . We have substantial improvement. On average, our factory testing was, on average, fifth-grade achievement in literacy and numeracy. After about five years, that got to about tenth grade.

You became a big believer in and supporter of vouchers?

Yes. . . .



What about the Cleveland voucher program? It's been around several years. There has been a court case. It's still something that is being debated, and it may go all the way to the Supreme Court. How do you assess that experiment?

Cleveland and Milwaukee are the only two voucher programs operating in the country. Others are now coming along in Florida, and that is using a religious school supply base. Opponents are concentrating on the First Amendment separation of church and state as an argument to defeat the voucher programs. I fully expect that the Supreme Court will decide that the First Amendment is not a prohibition against voucher programs, as they had been constituted in Milwaukee and in Cleveland. I wish that were an assurance the opponents would then stop, but I'm reasonably sure they'll find some other reason to object. The opposition essentially is that there should be no choice for parents, that parents should be forced to send their children to the place where government dictates it should go-- should be taught the way the government dictates they should be taught. If they don't like it, that's too bad.

vouchers are the answer for the problem.  Charters are a way station on the way to getting full choice through vouchers. The Cleveland voucher program is successful by every measure I can imagine. There are 4,000 students in the program now. I admire those families so much. The program has been under constant attack for four years, hanging on by its fingernails, never knowing whether it's going to be there or not be there.

The children are being very well educated. They are involved in 60 private schools that they never would have had a chance to go to otherwise. All this is going on and the Cleveland school population has gone up by 5,000 students in the last five years, on top of the 4,000 kids going to this program, on top of the 2,500 kids in charter schools. So charter schools and voucher schools are educating children for one-fourth to one-half of public school cost. If neither program had been in place, Cleveland would now have another 6,500 kids that they're educating, 89,000 per year. It is such a bargain. But the opposition doesn't pay attention to that.



This has been a fierce battle. Who is your opposition?

Our opposition is anybody who is somehow associated with the current public education structure. The leading funder of the opposition appears to be the national teacher unions. But right behind them are the school administrator associations, the association of school boards, the law firms that do work for the school systems, the accounting firms that work for school systems, the colleges of education who have terribly inbred relationship with both unions and public schools. They all are saying that the current system may be a bit difficult, but we understand it; we like it; we're in it. We don't like something that may cost us our jobs. I fully understand their desire to defend their turf. I am always mystified by people giving any weight whatsoever to their objections, since it's100 percent self interest that they're saying.

There's no logic to their opposition. Parents are the first line of direction for the education of their children. The United States Supreme Court said that in 1925, in Little Sisters of the Poor versus Oregon, in defending the right to have private education at all in this country. They just didn't get quite to the issue of how can we pay for that. People don't realize that part of that the government is trying to do is to stop all private education. That's what the current battle is all about.

. . .

Have you sort of withdrawn from the voucher battle, and are now engaged more in charter schools?

I have not withdrawn from the battle at all. We changed direction because we felt we had to. About a year ago, our parents in our two schools in Cleveland were very concerned, because at that time it looked like the supreme court of Ohio--which had not yet ruled--may well rule against the program. . . .

The charter school legislation had just become effective in the previous fall of 1998. That was not an option before. The funding of the voucher schools is only $2,250 per child. The funding of the charter schools is $4,500 per child. We were unable to pay sufficiently high salaries to keep our teachers at $2,250 per student. We didn't have the attraction of being a religious school. A lot of teachers want to teach at a religious school, and they'll take less pay for that. But we didn't have that. We were just like any other school--we had to pay competitive salaries.

Combining all those reasons together, we decided to close our voucher schools as of June, and coincidentally, charter legislation permitted us to open schools in those same locations and that's what we did. But I probably feel more forcefully than I ever have that vouchers are the answer for the problem. Charters are a way station on the way to getting full choice through vouchers.

What do you say to the opposition argument that vouchers drain away resources from the public schools--the public schools, in particular, who least can afford it?

It is such a spurious argument. It would be the same thing as saying that WalMart should have legal protection to prevent you from going to a Target store because you're taking money away from WalMart to go to the Target store. After all, the costs go with the money. It isn't just that money is leaving the public system. The student is leaving the public system. And there is no question that, if the student leaves the city of Cleveland and moves to Akron, the money goes with the child. Cleveland doesn't complain about that, nor should they. But if instead of going to Akron, you go to some other school, they say that's wrong. There's no logic to that. It is a very spurious argument. The cost of delivery of education to the students there has been reduced, because this is a reduced number of students.

I'm quick to acknowledge if only one or two students leave a classroom, there's no savings to the school that lost the students. But that's the problem. No choice program has yet been widespread enough to have the volume transfers that are I think clearly waiting to happen, which will effect a substantial savings in the cost of administering government schools. Since the alternatives are about half as expensive, we will end up way ahead of the game financially. . . .



What's your principal motivation in this? Why bother, after having a successful career as a businessman?

I saw what was happening in our companies with undereducation. I worked for three years here in Akron in the public school system, and threw my hands up; it was going to go nowhere. I began to pick up the things we had already learned. I have been far more successful in my life--professionally, economically, personally--more satisfaction than anything I ever dreamed would be the case. And I'm of a school that believes very, very strongly that I'm obligated to contribute back to the society, whatever I can, in exchange for what is given to me.

I'm not alone in that feeling. I'm very comfortable. Most people I know who have had the degree of success that I have feel exactly the same way. Most are striving to find a way to do that. And for a variety of reasons, I stumbled across the way to do that, because if we don't solve this problem, our society will disintegrate in 10 or 20 years. The vast number of undereducated people in this society will be such a drain on society. I'm not talking economics. I'm talking about social problems, criminal problems--the other problems that go with undereducated people who cannot support themselves. If I can make a contribution before I die, that may leave something better behind me than I found when I came, and help pay back for all the good that has happened to me. So this is the project.

Usually, in American society, there is a strong financial incentive for people to do whatever activity they undertake. But is it possible to actually make money in education from the private side?

I would say it to you differently. If the private alternative offering of education cannot be done profitably, then it is not the answer. Any economic activity as substantial as education is, as part of our gross domestic product, as a building block of the rest of our society, must be delivered in an economically sensible, profitable way. If it can't be done that way, then it shouldn't be delivered. We have to find out what that way is. One of the first tests that I have been embarked upon is to find out if that is possible, and the answer is "Absolutely."

We need absolutely good management. Education is first, last, and always, a business. If it's run like a business, it can be done profitably. I hire engineers and technicians and specialists to do things in my company that I can't do. Education is the same way. We hire people who are very good at what they do. But to expect them to be businesspersons at the same time is ludicrous. No other enterprise in our society requires that. Education does it the other way around. They put the educators in charge of the business functions and the organization, and look what has happened.

One of the major issues in what is an effective reform is, what makes economic sense? There are never enough resources to go around in any society. An economy allocates those resources in the most efficient way possible. When we force feed money into one system that isn't working, we're misusing resources. We're hurting some other part of our society. We are force-feeding money into education that isn't working. Let's go to the alternatives of choice. Do it economically. There will be plenty of dollars left to allocate to other things we have to deal with. . . .

One criticism of charter schools is that, at least in these early stages, there's not much supervision. For instance, a military academy here has since closed. Does that create some problems for you?

Yes. I've been talking about this for a long time and I always make the point that some schools will fail. Whether voucher schools or charter schools, they will fail. The market works in supplying a quality product in the delivery of services because failure is not tolerated by the market. If you fail, you go out of business. I'm amused at the complaints about that, because in my lifetime, I have never heard of any public school being closed, no matter how incompetent they are in what they do. The market is far more efficient at getting rid of the incompetent supplier. The complaint is made that the students suffer in that regard. That's true. That's short-time suffering for those students. But that's a whole lot better than 12 years in a school that's not teaching them anything. So we will have failures. We hope to learn from those. . . .

This whole movement for choice has shaken up the educational establishment. If you look at public school systems around the country now, you hear a lot about alternative schools, magnet schools.

. . . My opponents don't believe me, but I want to improve public education. I want to improve all education. And I am quite satisfied that, if we're good at what we do, we'll make public education better. They don't want to make these changes, because they don't have to. After I was involved here for three years, I left the day that I happened to look back at my file, and the agenda was identical to the first agenda I'd done three years ago. It was a similar meeting with a different date. And that's when I walked out and never went back.

Public education, like all bureaucracies, particularly in monopolies, does not want to change from inside, and will not. So we are the force of change. In the Netherlands, 30 percent of the students are still in government schools. Fine. If they're competing with the 70 percent that are not, I guarantee you those are good schools, by whatever standards exist in that country. That's what we seek. We'll be better with more competition. We know that, too.

. . . Do you need to do this for the money?

Absolutely not. I've been very blessed, as I said to you earlier. Money is a way to keep score in business. If you don't make money, you lose money, and if you lose money, you're out. Those are principles I believe in deeply. . . . Our management company is not yet two years old. It was organized in July of 1998. And we have incredible people, many of whom took a pay cut to come with us. But they believe in it, and I want to reward that. The way to reward that is you make them shareholders. And if indeed it becomes profitable because of their efforts, they can make some money. That's the American way. Are we hurting children because of them? I don't think so. If we only made profits out of an enterprise where everybody else is losing money, is that bad? Someone has to tell me why. I can't figure that one out.

The argument is that somehow you're going to be shortchanging the students to make a profit.

Yes. That's the wonderful thing about the American system. People who make the kind of statement you make don't realize, because they've never been in the American system. They've been on the government dole all their lives. . . . The power of choice in the hands of the consumer is the most awesome power to guarantee quality, effective cost, effective delivery, and consumer responsiveness. It's incredible because--and every one of our people in our organization knows--if these participants aren't getting what they need, we won't be here. . . . The demands to satisfy the needs of the users drive quality. If they have captive users, where's the drive? We don't have any users unless we do the job. It isn't my experience or my conviction that is compelling here. It's the example of our society as a whole, that the quality products don't come from government-dictated regulation. They come from competition.

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