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Opting Out of the Education Reform Industry

Wayne Au is an associate professor in the School of Educational Studies at the University of Washington at Bothell and an editor of the magazine Rethinking Schools. Jesslyn Hollar is a doctoral student at the University of Washington and director of the Alternative Pathways to Teaching program at Central Washington University.
We believe the opportunity to build numerous multi-billion dollar education enterprises is finally real. The biggest investment opportunity is where there is a problem—the bigger the problem, the bigger the opportunity. There is no bigger problem in the global knowledge economy today than how to effectively educate our populace.

—GSV Advisors, 20121

Big business has long been enamored of public education. Whether shaping systems of schooling along the lines of factory production, dictating what children should learn, or cultivating private-public partnerships to gain access to government monies, corporations and their owners have insisted on being key players in the formation of education policy and practice in the United States. Analysts estimate the value of the K-12 education market at more than $700 billion.2 Beyond their calls for students and workers to adapt to the global capitalist economy through increased competition and “accountability” in public schools, business leaders crave access to a publicly funded, potentially lucrative market—one of the last strongholds of the commons to be penetrated by neoliberalism.3

Business investors and entrepreneurs are already capitalizing on the increasingly privatized education market. GSV Capital is a growth investment company with a sizeable portfolio in education products, including education technology start-ups and online instructional programs. K12 Inc. is a for-profit, mostly online charter school start-up, which, despite operating “public” charter schools, as a publicly traded company, is beholden to the bottom-line demands of its investors and board members.MasteryConnect is just one of hundreds of new ed-tech companies aiding the rollout of the Common Core State Standards (CCSS).4

Venture capitalists and start-ups are not the only groups cashing in on the privatization of public education. So too are established multinational corporations like Pearson and the Educational Testing Service, which control massive portions of the “education industry.” Pearson is paid to create tests, which it is then also paid to administer and grade. The company accordingly markets a slew of test “support tools” for consumers to purchase, including test preparation materials, test-aligned textbooks, mobile apps, and computer software. In an education industry dependent on market competition to increase profitability, there is no better tool to turn teaching and learning into products—ready to measure, compare, and sell—than the high-stakes standardized tests championed by the contemporary education reform movement.

A Nation At Risk: Standardized Tests as Metrics for Mediocrity

The current era of corporate education reform began with the 1983 publication of the Reagan administration’s report A Nation at Risk: The Imperative for Education Reform, prepared by a committee of prominent professors, politicians, teachers, and business executives.5 Not only did the report attack many of the equity-minded federal education reforms that preceded it, A Nation at Risk also manufactured a narrative of public education in crisis, steeped in the language of Cold War military paranoia: “If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war,” the authors wrote. “We have, in effect, been committing an act of unthinking, unilateral educational disarmament.”6 The report also recommended test scores as an essential metric of student learning—the first major use of testing as a tool to convert teaching and learning into data to be measured, compared, and consumed.

The impact of A Nation at Risk was profound. Within a year of its publication, fifty-four state-level commissions on education were created, and twenty-six states raised graduation requirements. Three years later, thirty-five states had instituted comprehensive state education reforms that revolved around standardized testing and increased course loads for students. By 1994, forty-three states had statewide assessments for K-5, and by 2000, every state but Iowa administered at least one state-mandated test.7

Since the report appeared, major business leaders have been consistently and directly involved in U.S. federal education policy. During George H. W. Bush’s and Bill Clinton’s presidential terms, as high-stakes testing was being formally enshrined in state and federal education law, the business community maintained continued influence. Under Bush, David Kearns, the former chair of the Xerox Corporation, was hired by then Secretary of Education Lamar Alexander to develop national academic standards, and during the Clinton administration, corporate executives endorsed the creation of a National Skills Standards Board as part of the Goals 2000 legislation, and similarly supported the School-to-Work Opportunities Act.8

The influence of business on the education policy narrative has also trickled down into the language and structures of school life. As education historian Larry Cuban observes:

Other business influences also have become obvious. School boards renamed superintendents CEOs and their deputies “chief operating officers” and “chief academic officers.” Many urban school boards have inserted performance clauses in their superintendents’ contracts that pay bonuses when students’ test scores rise. Many districts have “outsourced” to private firms transportation, building maintenance, food services, security, purchasing, and, in some instances, entire schools. School policymakers and administrators (but rarely teachers) salt their vocabulary with such terms as “satisfying the customer,” “benchmarking,” and “marketing our services.” District administrators have imported from the private sector such business mainstays as marketing studies, strategic planning and “total quality management.”9

Groups like the Business Roundtable (BRT) further illustrate the increased influence of the interests of capital on federal education policy. The BRT was founded in 1972 as an association of corporate CEOs who took up the mission of analyzing and advising on issues affecting the U.S. economy. In 1989 a group of Roundtable CEOs from the largest 218 corporations met and decided how best to implement the National Education Goals developed by state governors, and by 1995, the BRT had established what they termed the “Nine Essential Components of a Successful Education System.” As might be expected, the BRT advocated high-stakes testing and national standards, and a careful look at the list reveals a notable coincidence: each of the Nine Essential Components were included in the design of No Child Left Behind.10

No Child Left Behind, Accountability, and Corporate Education Reform

In 2002, the No Child Left Behind Act (NCLB) was passed into law with bipartisan support, and it was built almost entirely around the use of high-stakes testing to trigger school reform. NCLB required that all students be tested in grades three through eight, and once again in high school, in reading and math. The accountability measures imposed by NCLB implicitly rejected any argument that racial and economic achievement gaps were the result of broad societal inequities, such as the effects of poverty. Instead, schools and teachers became either saviors or scapegoats in the narrative of education reform.11

This federal policy paved the way for private wealth accumulation from public education funds. If schools did not show improvement on state tests, meeting Adequate Yearly Progress (AYP) goals for test score growth by race, economic class, special education, and English language proficiency, among other categories, they would face severe sanctions, ranging from the diversion of federal monies intended for tutoring, transportation, and other “supplemental services,” to a total loss of federal funding. Additionally, NCLB decreed that all students in all subgroups were expected to test at 100 percent proficiency by 2014, and schools with persistently low test scores would be subject to further sanctions, including reconstitution under new management.12

Corporate influence likewise shaped the logic of NCLB, which established a policy paradigm for schools, districts, students, teachers, and states to compete with each other within what was conceived as an educational marketplace. In this vision, failing schools would be shut down or reorganized, and successful schools would attract more students, now recast as consumers seeking the best product. As George W. Bush asserted in a presidential campaign speech delivered to a conservative think-tank, the Manhattan Institute:

Federal funds will no longer flow to failure. Schools that do not teach and will not change must have some final point of accountability. A moment of truth, when their Title 1 funds are divided up and given to parents, for tutoring or a charter school or some other hopeful option. In the best case, schools that are failing will rise to the challenge and regain the confidence of parents. In the worst case, we will offer scholarships to America’s neediest children.13

Thus, schools would become like any other business enterprise, where efficiency and competition rule. In this model, “bad” educational producers go out of business and are removed from the market, while “superior” educational producers survive and thrive—the same logic advanced by charter school advocates now. NCLB was significant not only because it codified the neoliberalization of federal education policy; it also opened the gates for commercial access to the public funds supporting public education, entrenching the already-dominant corporate power and influence over federal education policy.

Public Monies for the Private Good

As states rushed to comply with NCLB’s testing mandates, corporations reaped the rewards. The testing industry has become a premier example of the neoliberal project of creating private markets from public goods. As educational researcher Patricia Burch explains:

Test development firms have sought to use NCLB mandates to attract new business. Major suppliers of test development and preparation firms explicitly reference the No Child Left Behind Act on their Web pages, and several named the law as spurring revenue in their recent financial statements. In addition, they all have links to the Department of Education’s Web site on No Child Left Behind, and include in their marketing materials references to how their products can help districts comply with NCLB.14

The Education Sector, an independent education think tank, reported that during the 2005–2006 school year alone, the twenty-three states that had not yet fully implemented NCLB’s testing requirements would have had to administer 11.4 million new tests in reading and math to meet the federal mandate. This was in addition to the estimated 45 million K-12 tests already required under NCLB at the time.15

The testing market, likewise, reached incredible heights in the wake of NCLB. Sales of test-related printed materials rose from $211 million in 1992 to $592 million in 2003, and for-profit companies offering NCLB-related content and services to school districts saw revenues of nearly $1.62 billion in that same year.16 Eduventures, Inc. estimated that the total value of the tests, test-prep materials, and testing services in 2006 in the United States was $2.3 billion. This total included $517 million for all NCLB related test development, publishing, administering, analyzing, and reporting during the 2005-2006 school year alone. Eduventures also estimated that 90 percent of the revenues generated by statewide testing was collected by only a handful of companies including, Pearson Educational Measurement, CTB/McGraw-Hill, Harcourt Assessment Inc., Riverside Publishing (a subsidiary of Houghton Mifflin), and the Educational Testing Service.17

Race to the Top: Funding Neoliberal Education Reform

In 2009, as popular dissent and a divided Congress left the federal government unable to secure reauthorization of NCLB, the Obama administration developed the Race to the Top (RTTT) grant competition. The money for this grant came from the American Reinvestment and Recovery Act of 2009—itself the result of the risky investments made by banks and investors that brought on the 2007–2009 financial crisis. With state budgets shrinking during the Great Recession, the $4.35 billion dollars attached to RTTT was a tantalizing carrot for state education departments. However, the grant came with strings attached, ones directly aligned with the corporate drive to privatize public education. RTTT explicitly rewarded applicants for implementing market-based education reforms, including high-stakes testing, support for charter schools, large data systems for evaluations, and restructuring plans for “failing” schools.18

RTTT also added support for two key policies that NCLB did not: using test score gains or losses to evaluate teacher effectiveness (sold as “models of value added measurement”), and a commitment to “common standards”—which in this case meant adoption of the Common Core State Standards, since no other national standards existed for states to use. Now, instead of just mandatory annual testing and punitive measures for struggling schools, cash-strapped states—who had little choice but to pursue the multi-billion-dollar grant money—were made to implement specific federally supported education reforms.19 In the end, despite the Obama administration’s efforts to distance itself from NCLB, and the failure of NCLB’s testing mandates (in particular the mandated but statistically impossible 100 percent proficiency rates), the act’s design provided the policy blueprint that led to RTTT. The latter only further entrenched high-stakes testing, and extended nearly every other neoliberal measure of NCLB into state and federal education policy.

Neoliberalism, Bill Gates, and the Common Core

The story of the Common Core illustrates just how tightly the logic of neoliberalism has grown intertwined with federal education policy. From the start, the CCSS was developed with the support and influence of corporate interests. In April 2009, Achieve, Inc. was contracted by the National Governors Association to develop national standards in reading and math. Spearheaded by David Coleman, these workgroups were staffed almost entirely by employees of major testing companies like the ACT and the College Board, accountability and school-choice advocacies like America’s Choice, Student Achievement Partners, and the Hoover Institute, as well as employees of Achieve Inc. itself. Several members of the workgroups also had direct ties to Pearson.20 In all, twenty-four people—only one of whom was a K-12 teacher—drafted the initial standards, and while these were sent out for feedback, this original workgroup of twenty-four was given final power over the CCSS.21

Corporate interests were also involved in the development of assessments tied to the CCSS. Pearson has contracts with two new groups—the Smarter Balanced Assessment Consortium and the Partnership for Assessment of Readiness for College and Careers—to help develop and administer the tests and assist in their rollout.22 The Bill and Melinda Gates Foundation also played a concerted role in the development, adoption, and introduction of the CCSS, paying out $233 million in grants to the organizations involved, as well as to think tanks that produced reports supportive of the CCSS, and to strategists engaged in “public-policy philanthropy,” promoting the standards and pushing for their adoption at the state level.23 Federally, the influence of the Gates Foundation went far beyond mere money: then-Secretary of Education Arne Duncan hired a senior Gates Foundation official to be his chief of staff, a Gates Foundation program officer to head his office of innovation, and a former chief operation officer of the Gates-funded New Schools Venture Fund to lead the RTTT grant initiative.24

The Gates Foundation’s efforts proved extremely effective. The first public draft of the CCSS was released on March 10, 2010, and the “final recommendations” were released less than three months later. States seeking to compete for RTTT money were required to adopt the CCSS by August 2, 2010. By 2011, all but ten states had adopted the CCSS, and by 2013 all but five states were on board.25 Undergirding the Gates Foundation’s commitment to the CCSS was the neoliberal belief that free markets will cure public education’s problems. In 2009, in the run-up to the mass adoption of the CCSS, Bill Gates remarked: “When the tests are aligned to the common standards, the curriculum will line up as well—and that will unleash powerful market forces in the service of better teaching. For the first time, there will be a large base of customers eager to buy products that can help every kid learn and every teacher get better.”26

The CCSS are a huge financial windfall for testing companies, consultants, and other education corporations. The Fordham Institute estimated that the CCSS cost $12.1 billion from 2012 to 2015.27 The conservative Pioneer Institute and American Principles Project estimate a mid-range cost of $15.8 billion over seven years for the CCSS, with $1.2 billion spent on assessments, $5.3 billion on professional development, and $6.9 billion for tech infrastructure and support.28 According to the New York Times, in part due to the CCSS, venture capital investment in public education has increased 80 percent since 2005, to a total of $632 million in 2012, a figure that has no doubt increased since.29 Bill Gates and Microsoft have cashed in on this lucrative market: in February 2014, Microsoft announced it was partnering with Pearson to install Pearson’s Common Core materials onto Microsoft’s Surface tablet.30

The Future of Testing

It is critical to recognize that all of this profit-making from new standards and standards-aligned materials, as well as the more general perversion of public education into a competitive marketplace, relies on high-stakes standardized testing. The entire education reform industry depends on the data produced by these tests, because tests render children, teachers, administrators, schools, districts, institutions, and communities into numbers. In this rendering, social and historical conditions, complex issues of power and culture, even the life and spirit of people, are flattened into simple quantities for inspection, comparison, and ranking. In turn, test scores become a form of currency, used as the basis for decisions about educational “choice,” school closures, charter schools, and the evaluation of teachers and schools. Within the neoliberal educational framework, test scores become both the means and ends of education, alienating students and teachers from their labor while turning the test scores themselves into fetishized commodities that obscure the very people they purport to represent.31

ESSA: The Everything Stays the Same Act

As of this writing, NCLB has been declared deceased, and RTTT seems to have withered and vanished in the triumphant narrative surrounding NCLB’s demise. Now, victory has been declared in the next generation of U.S. federal education policy, the Every Student Succeeds Act (ESSA), signed into law by President Obama in December 2015. However, it will come as no surprise that despite growing nationwide resistance, the federal government has reaffirmed its commitment to annual high-stakes standardized testing and accountability measures, and to linking those scores to school funding. Coupled with the continued testing and accountability fetish are dangerous provisions that will serve to diminish the quality of the teaching workforce in favor of a competitive teacher preparation market, whose graduates’ worth will be measured by their ability to raise student test scores, and little else. So although federal education policy now operates under a new name, in the ESSA we still have the same testing, conceived within the same neoliberal framework.

All of which makes the Opt Out movement so critical. High-stakes tests provide the data that is the very fuel of the corporate education reform machine. By opting out of these tests, students, parents, and teachers have the power to take away the data. With the data seized and the machine deprived of its fuel, the corporate reformers cannot produce public education for private gain. This is why opting out is so threatening to the reform industry—and it should be.


  1. Michael T. Moe et al., “Revolution 2.0: How Education Innovation Is Going to Revitalize America and Transform the U.S. Economy,” GSV Asset Management, July 4, 2012,
  2. National Center for Educational Statistics, Digest of Educational Statistics, 2012,
  3. Michael Fabricant and Michelle Fine,The Changing Politics of Education: Privatization and the Dispossessed Lives Left Behind (Boulder, CO: Paradigm, 2013).
  4. Lee Fang, “Venture Capitalists Are Poised to ‘Disrupt’ Everything About the Education Market,”The Nation, September 25, 2014.
  5. National Commission on Excellence in Education,A Nation at Risk: The Imperative for Educational Reform (Washington, D.C.: U.S. Department of Education, 1983), 65. The full report is available at
  6. Ibid., 5.
  7. Wayne Au,Unequal by Design: High-Stakes Testing and the Standardization of Inequality (New York: Routledge, 2009).
  8. Larry Cuban,The Blackboard and the Bottom Line: Why Schools Can’t Be Businesses (Cambridge, MA: Harvard University Press, 2004).
  9. Ibid., 63.
  10. Kathy Emery and Susan Ohanian,Why Is Corporate America Bashing Our Public Schools? (Portsmouth, NH: Heinemann, 2004).
  11. Au,Unequal by Design.
  12. Ibid.
  13. George W. Bush, “A Culture of Achievement,” speech delivered in New York City, October 5, 1999.
  14. Patricia Ellen Burch, “The New Educational Privatization: Educational Contracting and High Stakes Accountability,”Teachers College Record 108, no. 12 (2006): 2582–610.
  15. Thomas Toch,Margins of Error: The Education Testing Industry in the No Child Left Behind Era (Washington, D.C.: Education Sector, 2006).
  16. Burch, “The New Educational Privatization.”
  17. J. Mark Jackson and Eric Bassett,The State of the K-12 State Assessment Market (Boston: Eduventures, 2005).
  18. U.S. Department of Education,Race to the Top Program Executive Summary (Washington, D.C.: U.S. Department of Education, 2009).
  19. Ibid.
  20. William J. Mathis, “The ‘Common Core’ Standards Initiative: An Effective Reform Tool?” Great Lakes Center for Education Research and Practice, July 2010,
  21. Mercedes Schneider, “Those 24 Common Core 2009 Work Group Members,” deutsch29 blog,
  22. Mercedes Schneider, “Incompetent Pearson ‘Wins’ PARCC Contract. Big Surprise,” deutsch29 blog, May 2, 2014.
  23. Lyndsey Layton, “How Bill Gates Pulled Off the Swift Common Core Revolution,”Washington Post, June 7, 2014.
  24. Michael Klonsky, “Power Philanthropy: Taking the Public Out of Public Education,” in Philip E. Kovacs, ed.,The Gates Foundation and the Future of U.S. “Public” Schools (New York: Routledge, 2011), 21–38.
  25. Mathis, “The ‘Common Core’ Standards Initiative.”
  26. Bill Gates, speech delivered to the National Conference of State Legislatures, July 21, 2009.
  27. Patrick Murphy and Elliot Regenstein with Keith McNamara,Putting a Price Tag on the Common Core: How Much Will Smart Implementation Cost? (Washington, D.C.: Thomas B. Fordham Institute, 2012).
  28. Common Core State Standards Estimated Cost is $16 Billion for States,” Pioneer Institute, February 22, 2012,
  29. Motoko Rich, “NewSchools Fund Attracts More Capital,”New York Times, April 30, 2013.
  30. Layton, “How Bill Gates Pulled Off the Swift Common Core Revolution.”
  31. Au,Unequal by Design.
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