NCPA - National Center for Policy Analysis

Educational Entrepreneurs To The Rescue

January 4, 2000

Never have the opportunities for private enterprisers to rejuvenate education in the U.S. looked so abundant as they do today, analysts say. Dissatisfaction with public schools, coupled with the explosion of Internet-based learning and copious amounts of available capital, promise to greatly expand for-profit school ventures.

  • Revenues of for-profit education companies account for only 10 percent of the $780 billion spent on education.
  • The total market capitalization of education stocks makes up less than 1 percent of U.S. capital markets.
  • But in 1999, the amount of private venture capital pouring into education quadrupled -- to $3.3 billion, according to the market research firm
  • The number of publicly-funded charter schools soared from fewer than 100 in 1994 to nearly 1,700 last fall -- and experts predict they will hit 2,300 this year.

While most charters are nonprofit, charter operators acting for profit are gaining market share and growing rapidly, according to reports.

Although education stocks generally lost money in 1999, analysts are predicting a recovery in 2000.

Source: William C. Symonds, "Education," Business Week, January 10, 2000.


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