Private equity is expanding its reach into K-12 education, and the Trump administration’s Federal Scholarship Tax Credit threatens to solidify the privatization of public school services at an entirely new scale. That’s one of the key takeaways in a new CEA policy brief.
- Addresses current and potential impacts of private equity on K-12 finances and resource allocations
- Identifies program areas such as special education and tutoring that are increasingly being provided on a contractual basis to school districts by private equity firms
- Explores how private equity firms, including The Vistria Group, Leonard Green & Partners, American Securities Inc., A-Street Capital, and others, stand to benefit from the tax credit
- Demonstrates how private equity-backed education providers are likely to lead to diminished pedagogical, counseling, and therapeutic services
“We have seen what happens in healthcare, housing, and other sectors that have been targeted, bankrupted, and abandoned by private equity firms,” says CEA President Kate Dias. “We’ve witnessed the impacts on nursing homes and hospitals right here in Connecticut, and if we’re not vocal and vigilant, this is what’s coming for our public schools.”
In the Federal Scholarship Tax Credit scheme, contributions flow through scholarship granting organizations (SGOs), brokers that take a cut off the top of public school dollars.
“SGOs are essentially privatized school boards that erase parent and community voice,” says Dias. “That means decisions over the long-term goals and day-to-day operations in schools could become concentrated in the hands of finance and technology investors as opposed to boards of education.”
CEA’s policy brief includes research, recommendations, and future considerations for state and local decision-makers. State governors have until Dec. 31 to opt into the controversial Federal Scholarship Tax Credit, and while many have made their decisions, others await official guidelines from the U.S. Treasury. Those guidelines could be released later this week.
Read CEA’s full report, Private Equity in Connecticut K-12 Education.
