Five Questions with Rita Ferrandino, MD, ARC Capital Development

Rita Ferrandino, Managing Director, ARC Capital Development, will be teaching a Master Class on March 9, 2009 at the 10th Annual Education Industry Investment Forum at the Biltmore Resort & Spa in Phoenix, Arizona. She will be joined by her business partner Kevin Custer, currently the CEO of Kinderstreet Operation, LLC.

You can join Ferrandino and Custer by registering now: by clicking on the link to our registration page.

Rita Ferrandino and Kevin Custer Answer Questions about the Future of Education Investment

EIIF: What act of strategic investment in the education industry by any player in the past five years do you admire most, and what was its outcome?

Rita Ferrandino & Kevin CusterStudent Information Systems (SIS) - Pearson bought the two largest players in the student information system market which were PowerSchool and Chancery to add to the Pearson portfolio of SIS offerings.

Thus, Pearson bought their largest competitors and now owns the entire SIS marketplace.

EIIFWhat industry genre will have the most influence in the future of education over the next five years?


RF & KCPreK Education Market Segment

We believe the amount of investment into the PreK education segment will produce results quickly. The traditional school day is finite. The introduction or addition of PreK education is a unique opportunity for upside.

EIIF: If you could name any industry within education that requires the most change, what industry is it and what changes do you think it needs?

RF & KC
Teacher Education

Our future depends on our ability to develop of the next generation of teachers. We need to proactively recruit the best and brightest teachers.

As an industry, we need to improve teacher compensation, training, and keeping highly qualified teachers engaged.

EIIF: What inspirational idea outside of education has had a dominant effect on how you do business?

RF & KC

Web 2.0 technology
The barriers of entry to starting and launching a new business are dropping due to Web 2.0 technology

EIIF:
For an education company or for profit school that is looking to grow, what is the one thing they need to be prepared to do before meeting investors or before launching their product or service into the marketplace?

RF & KC:
Know your customer.
Understand intimately what that customer will pay for.

Details on the Ferrandino-Custer Master Class, 9.00AM March 2, 2009 at the Biltmore Resort & Spa

Maximize Distribution and Ensure Returns on Capital Investment by Utilizing Effective Political and Commercial Marketing Solutions

• Fine tune government interactions by learning political marketing strategies and incorporating their resources into a business plan to ensure rapid uptake of products and ideas in school districts
• Calibrate investment strategies for K12 by leveraging networks, employing best practice in marketing to decision-makers
• Familiarize yourself with technologies that deepen your level of investment and commercial involvement with end users and end practitioners in public schools
• Employ social media and web 2.0 to radically boost investment return and leverage soft-power relationships to further your company and investment house’s interests

Rita Ferrandino, Managing Director, ARC Capital Development
Kevin Custer, Partner, ARC Capital Development

Download the EIIF brochure and register early.

Future Leaders Institute Auction

For the rest of the day you can bid on items up for sale. The auction is put on by The Future Leaders Institute of New York City.

Why China is not Holding the American Economy for Ransom

Many people fear the immense amount of US debt held by foriegn countries. But Richard Spencer makes a case why this is not necessary:

Peston I think is falling into a common trap here of thinking that because China holds 1.9 trillion dollars of foreign exchange reserves, including more than 600 billion dollars in US treasury bonds, it holds all the cards, and America should do what China tells it to. But as I have argued before, this is a symbiotic relationship, in which both sides were caught in a trap - China couldn't stop overproducing, and through its currency interventions ensured that America could happily go on buying. That's what led to the US trade deficit. Both sides failed to bring this imbalance to an end on time, and both sides will now suffer. This goes for Britain too, of course.

Chinese officials themselves are now going around and saying of America that it should be nice to people who lend it money.

But in some ways this is an old saw: it has been common enough for people to talk about the inevitable transfer of power from America to China in the coming years as being the result of China becoming "America's bank".

Yet China is not America's bank. America is China's bank. This is pretty obvious when you think about it. You don't need to be an economist; you just need to think about your own bank accounts.

Why Robert Peston is Wrong.

Student Loan Corporation to Cut 91 Jobs

Saw this on Thomson Financial wire and now on Forbes today: Student Loan Corporation to cut 91 jobs.

Shift Happens

Looking at the web today:

this wonderful collection of insights and facts that is viral by nature. I don't know the original author, but I found it at Chris Knudsen's blog.

* If you are one in a million in China, there are 1,300 people just like you
* The smartest top 25% of people in China represent a population greater than all of North America
* China will soon have more English speakers in its population than any other country in the world
* In the next eight minutes, 60 babies will be born in America. 351 will be born in India
* By the age of 38 you will have had between 10 and 14 jobs
* 1 in 4 Americans are working in the first year of their current job
* The U.S. ranks 20th in the world for broadband penetration.
* In 2002Â Nintendo invested more in R&D than the federal government (excludes military R&D)
* 1 in 8 married U.S. couples met online
* There are 2.7 billion searches on Google each month. Where were these questions addressed to before Google?
* There are more than 6 billion sms messages sent everyday
* There are 540,000 words in the English language -- five times more than there were in 1800
* 3,000 books are published daily
* More knowledge exists in one week of the New York Times than a person was able to access in their entire lifetime in the 1800’s
* 1.5 exabytes of information will be created this year -- that’s more than was created in the previous 5,000 years
* What a college freshman learns this year will be outdated by his junior year of college
* Fiber optics capacity is tripling every six months
* The $100 laptop project will ship 50 to 100 million laptops per year to people in underdeveloped countries. There were 47 million laptops shipped world wide last year
* By 2023 a $1000 computer will exceed the capacity of the human brain
* By 2047 a $1000 computer will exceed the capacity of the human race

New York Mulls Giving Mayor Control of City Schools

The non-profit group Learn NY is campaigning to give New York City mayor Michael Bloomberg control of the city's schools.

Here is the group's website.

No More Money for Day Cares

Technically, there will be money, but in New York City the city controllers are cutting the budgets for day care centers.

Those reductions are part of a package of $62 million in cuts that will affect day care services to struggling working families across the five boroughs. Mr. Mattingly said some hard choices were necessary “to avoid a train wreck” to the city’s day care programs in this time of fiscal crisis.

The rest of the cuts will affect school-age children, who could be served by Department of Education programs, he said. By the start of the next school year, for example, Children’s Services will no longer pay for day care slots for 3,300 5-year-olds who could be served through kindergarten and after-school programs.

It will also stop co-financing slots for 4-year-olds who are enrolled in universal prekindergarten programs. Currently, child welfare funds go to provide enrichment in these classrooms.

More American Students Study In China Than Ever Before

These days, when a student wants a real education, she studies abroad. The New York Times finds that more students than before are choosing China as their hot spot.

As a person formerly employed in China, I highly recommend it. Nothing prepares the American better for participation in a hyper-capitalist global economy than doing business or learning how the world is run from the Chinese point of view.

India Has More Honors Students than America Has Kids

glumbert - Did You Know?

Entrepreneurs, Create the Future of Education

If you are like most entrepreneurs, you value conversations, ideas, and you understand and appreciate the value of risk.

I'm not talking petal to the metal risk. I'm talking about risk that refines your business and takes your ideas into a direction that few people travel.

Are you an education innovator who is out to disrupt traditional education services? Are you online savvy? Do you want to answer the call to action that students are giving you by offering them and their schools a service that addresses real need in the market?

Do you think you have a school idea that would work well in the for-profit K12 and Post Secondary industry?

Sign up to participate in the 11th Annual Education Industry Investment Forum and apply to be on of the Five Entrepreneurs to Watch in 2009.

Are you a John Katzman, founder of 2Tor?

Does your business plan's vision of the future resemble the innovative energy and forward thinking of a Jordan Goldman, founder of Unigo.com?

Do you look at publishing like Jeff Shelstad at Flat World Knowledge?

If so, and even if you are wildly different than these individuals, you have an opportunity to join them at the 2nd Annual FuturED Symposium, a showcase and platform for the latest developments in the education industry.

We look forward to seeing you in Phoenix in March.

Will Tenure for Public School Teachers Disappear in DC?

The Washington, D.C. public schools chancellor Michelle Rhee is floating an eyebrow-raising proposal to abolish tenure plans in the school district and incorporate the investment assistance of private foundations and individuals.

From the article:

Ms. Rhee has not proposed abolishing tenure outright. Under her proposal, each teacher would choose between two compensation plans, one called green and the other red. Pay for teachers in the green plan would rise spectacularly, nearly doubling by 2010. But they would need to give up tenure for a year, after which they would need a principal’s recommendation or face dismissal.

Teachers who choose the red plan would also get big pay increases but would lose seniority rights that allow them to bump more-junior teachers if their school closes or undergoes an overhaul. If they were not hired by another school, their only options would be early retirement, a buyout or eventual dismissal.

In an interview, Ms. Rhee said she considered tenure outmoded.

“Tenure is the holy grail of teacher unions,” she said, “but has no educational value for kids; it only benefits adults. If we can put veteran teachers who have tenure in a position where they don’t have it, that would help us to radically increase our teacher quality. And maybe other districts would try it, too.”

But the proposal that could garner up to US$75 million for increasing teacher salaries is drawing fire from the Washington Teachers' Union.

Washington Teachers' Union

Pre-School Math Critical to Education Growth: Columbia University Report

Faculty at Columbia University's Teacher's College calling for advanced focus on early education in math to boost equality in socio-economic status in the United States.

From the article at Columbia:

Research has clearly shown that nearly from birth, children develop an “everyday mathematics”—informal ideas of more and less, taking away, shape, size, location, pattern and position—that is broad, complex and often sophisticated. Indeed, everyday math is so fundamental to children’s understanding of the world that they could not function without it. And math ability upon entry to kindergarten not only predicts later math achievement, but also may be an even better predictor of success in later grades than is early reading ability.

Low-socioeconomic status (SES) preschool children generally perform more poorly on many simple (particularly verbal) math tasks than do their more privileged peers. But both groups use similar strategies to solve problems, perform as well on non-verbal math tasks and exhibit few differences in the everyday math they use in free play. Both groups have the potential to learn school math.

Join us for the 11th Annual Education Industry Investment Forum on March 9-11, 2009.

Doing Math Like They Do It In India

The New York Times is recommending that young children struggling in math take a lesson from India, literally.

Grand Canyon University

Get ready for the Grand Canyon University IPO at the end of the month. Am I right in assuming this is coming a month late? I thought they would be launching the IPO in October.

The deal is set to price the week of Nov. 17, The Journal said, citing underwriters. Grand Canyon, which filed for its I.P.O. in May, plans to sell 10.5 million shares at a price between $16 and $18, $2 lower than originally planned.

Barack Obama's Education Agenda

A kind reader has alerted me to the location of the Obama education agenda.

You can access it here.

As there has been some commentary lately about the agenda disappearing from the president-elect's Change.gov site, here is the education platform in full:

The Problem

No Child Left Behind Left the Money Behind: The goal of the law was the right one, but unfulfilled funding promises, inadequate implementation by the Education Department and shortcomings in the design of the law itself have limited its effectiveness and undercut its support. As a result, the law has failed to provide high-quality teachers in every classroom and failed to adequately support and pay those teachers.

Teacher Retention is a Problem: Thirty percent of new teachers leave within their first five years in the profession.

Soaring College Costs: College costs have grown nearly 40 percent in the past five years. The average graduate leaves college with over $19,000 in debt. And between 2001 and 2010, 2 million academically qualified students will not go to college because they cannot afford it. Finally, our complicated maze of tax credits and applications leaves too many students unaware of financial aid available to them.
Barack Obama and Joe Biden's Plan

Early Childhood Education

* Zero to Five Plan: The Obama-Biden comprehensive "Zero to Five" plan will provide critical support to young children and their parents. Unlike other early childhood education plans, the Obama-Biden plan places key emphasis at early care and education for infants, which is essential for children to be ready to enter kindergarten. Obama and Biden will create Early Learning Challenge Grants to promote state "zero to five" efforts and help states move toward voluntary, universal pre-school.
* Expand Early Head Start and Head Start: Obama and Biden will quadruple Early Head Start, increase Head Start funding and improve quality for both.
* Affordable, High-Quality Child Care: Obama and Biden will also provide affordable and high-quality child care to ease the burden on working families.
o Reform No Child Left Behind: Obama and Biden will reform NCLB, which starts by funding the law. Obama and Biden believe teachers should not be forced to spend the academic year preparing students to fill in bubbles on standardized tests. He will improve the assessments used to track student progress to measure readiness for college and the workplace and improve student learning in a timely, individualized manner. Obama and Biden will also improve NCLB's accountability system so that we are supporting schools that need improvement, rather than punishing them.
o Support High-Quality Schools and Close Low-Performing Charter Schools: Barack Obama and Joe Biden will double funding for the Federal Charter School Program to support the creation of more successful charter schools. An Obama-Biden administration will provide this expanded charter school funding only to states that improve accountability for charter schools, allow for interventions in struggling charter schools and have a clear process for closing down chronically underperforming charter schools. An Obama-Biden administration will also prioritize supporting states that help the most successful charter schools to expand to serve more students.
o Make Math and Science Education a National Priority: Obama and Biden will recruit math and science degree graduates to the teaching profession and will support efforts to help these teachers learn from professionals in the field. They will also work to ensure that all children have access to a strong science curriculum at all grade levels.
o Address the Dropout Crisis: Obama and Biden will address the dropout crisis by passing his legislation to provide funding to school districts to invest in intervention strategies in middle school - strategies such as personal academic plans, teaching teams, parent involvement, mentoring, intensive reading and math instruction, and extended learning time.
o Expand High-Quality Afterschool Opportunities: Obama and Biden will double funding for the main federal support for afterschool programs, the 21st Century Learning Centers program, to serve one million more children.
o Support College Outreach Programs: Obama and Biden support outreach programs like GEAR UP, TRIO and Upward Bound to encourage more young people from low-income families to consider and prepare for college.
o Support College Credit Initiatives: Barack Obama and Joe Biden will create a national "Make College A Reality" initiative that has a bold goal to increase students taking AP or college-level classes nationwide 50 percent by 2016, and will build on Obama's bipartisan proposal in the U.S. Senate to provide grants for students seeking college level credit at community colleges if their school does not provide those resources.
o Support English Language Learners: Obama and Biden support transitional bilingual education and will help Limited English Proficient students get ahead by holding schools accountable for making sure these students complete school.
o Recruit Teachers: Obama and Biden will create new Teacher Service Scholarships that will cover four years of undergraduate or two years of graduate teacher education, including high-quality alternative programs for mid-career recruits in exchange for teaching for at least four years in a high-need field or location.
o Prepare Teachers: Obama and Biden will require all schools of education to be accredited. Obama and Biden will also create a voluntary national performance assessment so we can be sure that every new educator is trained and ready to walk into the classroom and start teaching effectively. Obama and Biden will also create Teacher Residency Programs that will supply 30,000 exceptionally well-prepared recruits to high-need schools.
o Retain Teachers: To support our teachers, the Obama-Biden plan will expand mentoring programs that pair experienced teachers with new recruits. They will also provide incentives to give teachers paid common planning time so they can collaborate to share best practices.
o Reward Teachers: Obama and Biden will promote new and innovative ways to increase teacher pay that are developed with teachers, not imposed on them. Districts will be able to design programs that reward accomplished educators who serve as a mentor to new teachers with a salary increase. Districts can reward teachers who work in underserved places like rural areas and inner cities. And if teachers consistently excel in the classroom, that work can be valued and rewarded as well.
o Create the American Opportunity Tax Credit: Obama and Biden will make college affordable for all Americans by creating a new American Opportunity Tax Credit. This universal and fully refundable credit will ensure that the first $4,000 of a college education is completely free for most Americans, and will cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students. Recipients of the credit will be required to conduct 100 hours of community service.
o Simplify the Application Process for Financial Aid: Obama and Biden will streamline the financial aid process by eliminating the current federal financial aid application and enabling families to apply simply by checking a box on their tax form, authorizing their tax information to be used, and eliminating the need for a separate application.

K-12

* Reform No Child Left Behind: Obama and Biden will reform NCLB, which starts by funding the law. Obama and Biden believe teachers should not be forced to spend the academic year preparing students to fill in bubbles on standardized tests. He will improve the assessments used to track student progress to measure readiness for college and the workplace and improve student learning in a timely, individualized manner. Obama and Biden will also improve NCLB's accountability system so that we are supporting schools that need improvement, rather than punishing them.
* Support High-Quality Schools and Close Low-Performing Charter Schools: Barack Obama and Joe Biden will double funding for the Federal Charter School Program to support the creation of more successful charter schools. An Obama-Biden administration will provide this expanded charter school funding only to states that improve accountability for charter schools, allow for interventions in struggling charter schools and have a clear process for closing down chronically underperforming charter schools. An Obama-Biden administration will also prioritize supporting states that help the most successful charter schools to expand to serve more students.
* Make Math and Science Education a National Priority: Obama and Biden will recruit math and science degree graduates to the teaching profession and will support efforts to help these teachers learn from professionals in the field. They will also work to ensure that all children have access to a strong science curriculum at all grade levels.
* Address the Dropout Crisis: Obama and Biden will address the dropout crisis by passing his legislation to provide funding to school districts to invest in intervention strategies in middle school - strategies such as personal academic plans, teaching teams, parent involvement, mentoring, intensive reading and math instruction, and extended learning time.
* Expand High-Quality Afterschool Opportunities: Obama and Biden will double funding for the main federal support for afterschool programs, the 21st Century Learning Centers program, to serve one million more children.
* Support College Outreach Programs: Obama and Biden support outreach programs like GEAR UP, TRIO and Upward Bound to encourage more young people from low-income families to consider and prepare for college.
* Support College Credit Initiatives: Barack Obama and Joe Biden will create a national "Make College A Reality" initiative that has a bold goal to increase students taking AP or college-level classes nationwide 50 percent by 2016, and will build on Obama's bipartisan proposal in the U.S. Senate to provide grants for students seeking college level credit at community colleges if their school does not provide those resources.
* Support English Language Learners: Obama and Biden support transitional bilingual education and will help Limited English Proficient students get ahead by holding schools accountable for making sure these students complete school.

Recruit, Prepare, Retain, and Reward America's Teachers

* Recruit Teachers: Obama and Biden will create new Teacher Service Scholarships that will cover four years of undergraduate or two years of graduate teacher education, including high-quality alternative programs for mid-career recruits in exchange for teaching for at least four years in a high-need field or location.
* Prepare Teachers: Obama and Biden will require all schools of education to be accredited. Obama and Biden will also create a voluntary national performance assessment so we can be sure that every new educator is trained and ready to walk into the classroom and start teaching effectively. Obama and Biden will also create Teacher Residency Programs that will supply 30,000 exceptionally well-prepared recruits to high-need schools.
* Retain Teachers: To support our teachers, the Obama-Biden plan will expand mentoring programs that pair experienced teachers with new recruits. They will also provide incentives to give teachers paid common planning time so they can collaborate to share best practices.
* Reward Teachers: Obama and Biden will promote new and innovative ways to increase teacher pay that are developed with teachers, not imposed on them. Districts will be able to design programs that reward accomplished educators who serve as a mentor to new teachers with a salary increase. Districts can reward teachers who work in underserved places like rural areas and inner cities. And if teachers consistently excel in the classroom, that work can be valued and rewarded as well.

Higher Education

* Create the American Opportunity Tax Credit: Obama and Biden will make college affordable for all Americans by creating a new American Opportunity Tax Credit. This universal and fully refundable credit will ensure that the first $4,000 of a college education is completely free for most Americans, and will cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students. Recipients of the credit will be required to conduct 100 hours of community service.
* Simplify the Application Process for Financial Aid: Obama and Biden will streamline the financial aid process by eliminating the current federal financial aid application and enabling families to apply simply by checking a box on their tax form, authorizing their tax information to be used, and eliminating the need for a separate application.

Joel Klein as Education Secretary Provokes Wrath of Bloggers

Courtesy: Annie Tritt, New York Times

The result of the Klein name being floated, from the perspective of The New York Times, is that the public is not too keen on the role the New York City Schools Chancellor might play in the future of American education.

New York Times commentary on Klein

What are your ideas on who will be education secretary?

What is Obama's education platform? Where is it going right? Where do you think it veers from helping grow a sustainable education future for the United States?

What role can education leaders from other countries -- and the lessons they have learned -- play in forming American's education future?

Please write in your thoughts, or send them to me at dcrets [at] iirusa dot com.

We will post views with your permission.

TASC Pres Lucy Friedman Answers NY Times Questions

You can visit the New York Times CityRoom site today to ask questions about after school activities and programs from children in the city

Answering the questions will be Lucy N. Friedman.

Ms. Friedman is founding president of the After-School Corporation, or TASC, a nonprofit organization dedicated to giving all kids opportunities to grow through after-school and summer programs that support, educate and inspire them.

KIPP Leader Tells Barack Obama to Focus on Early Education

What should the new president do for education in America?

Mike Feinberg, co-founder of KIPP, gives President-elect Barack Obama some suggestions to focus on opportunities in education.

Among his recommendations:

Focus on the early years: Even in this time of economic uncertainty, we need to make critical investments in pre-K and early childhood education.
In his recent book "Whatever It Takes," New York Times Magazine editor Paul Tough notes that by age 3, children in low-income communities have been exposed to 20 million fewer words than their more affluent peers. By providing a language-rich learning environment at an early age, schools can offset this gap and give children the tools they need to succeed.

Within the comments section at the Houston Chronicle, where this article is published, a man named Bob Rose also offers this advice:

Maria Montessori wrote, almost a century ago, that three- and four-year-old preschoolers will learn to read spontaneously if they get "sufficient" practice forming alphabet letters. Although boldly claimed in her "The Montessori Method" this possibility has strangely never before been subjected to a scientific test.

In 2002-2004 I found five kindergarten teachers on the Internet who provided experimental data on 106 experimental kindergarten students as they practiced printing fluency and we monitored their reading ability (and also five other first-grade teachers who did NOT make the effort of inducing printing practice, but who only measured how much of the serial alphabet students could print in a timed, twenty-second period of time, and the correlation with reading skill. These 94 students formed a control group).

The correlation was very obvious in all ten classrooms. We found that all but a very small percentage of students read well, and with good comprehension, shortly after the point in time when they were able to print at least the first thirteen letters within 20 seconds. Multiplied by three, this equates with a fluency rate of 39 letters per minute.

The children enjoyed the practice sessions, and observing their gradual increase in fluency as the weeks passed. No apparent stress was noted, and it was found that the median kindergartner, after spending five minutes daily of each school day practice printing, was "printing fluent" after a mere three months. But printing fluency didn't correlate with reading skill among older students, according to our results with a group of fifty fourth-graders.

The kindergartners wrote and read with about the same skill as the first graders at the end of the winter of school. The fact that kindergartners were reading and writing at a level of children a full grade ahead shows that the early acquisition of literacy in the kindergarten (experimental) group was caused by the dedicated attempt to induce practiced fluency in printing, and not just a coincidental marker of some third, and unknown, causative factor.

At the present time (May, 2008) I have collected another group of kindergarten and first-grade teachers on the Internet. Fourteen K-1 teachers have already submitted correlations of the printing fluency and reading skills of their pupils. In each case the correlation has been obvious and strong. Anyone wishing to join and monitor (or participate on) this free list need only send any email to k1writing-subscribe@yahoogroups.com. Returning the automated "confirmation message" to the computer will result in automatic list membership.

Printing practice and fluency training in the early grades has completely gone out of style during the twentieth century, though it is still practiced (though not specifically tested) in India and China. This rediscovery of this important principle offers an inexpensive and effective means toward ensuring reading and academic success from the earliest grades for children of all races and ethnic backgrounds.

It has also been found that second-graders able to give correct answers to simple addition facts more fluently than 40 answers per minute rarely have problems with math or science thereafter.

Five Questions with Andy Ross, Florida Virtual Schools

Andy Ross, VP -- Global Services, FLVS

Once again, the 11th Annual Education Industry Investment Forum presents 5 Questions, its running series of professional chats with education industry leaders.

Today we talked with Andy Ross, Vice President -- Global Services and Business Development, Florida Virtual School. He shares with us his insights on where technology can take education and what he hopes to do with the FLVS mandate.

Florida Virtual School web site

EEIF: What act of strategic investment in the education industry by any player in the past five years do you admire most, and what was its outcome?

Andy Ross I really have to say it is the investment that the State of Florida has made in the creation of Florida Virtual School and its On-Learning Program. The creation of this K-12 school district has served over 500,000 enrollments during the last 12 years. It is proving to be a cost effective solution for students but more importantly it is proving to be an effective means of learning for today’s students. The data supports that results are exceeding expectations. From credit recovery to Advanced Placement courses this is a very powerful solution for education.

EEIF: What industry genre will have the most influence in the future of education over the next five years?

Andy Ross On-Line learning for K-12. When solid content is merged with a solid instruction model the results can be outstanding. The model at Florida Virtual School allows students to learn at their own pace, when they want to learn, how they want to learn and is the ultimate in individualized education.

EIIF: If you could name any industry within education that requires the most change, what industry is it and what changes do you think it needs?

Andy Ross Traditional format of the high school model needs to be reinvented to meet the needs of today’s students. Don’t misunderstand me, though. There are some fantastic experiences in today’s high schools. But we live in a world today where one model does not fit all. We need to have choices for students but most importantly we need to have legislators and education administrators adopt and support a variety of models for their students.

EIIF: What inspirational idea outside of education has had a dominant effect on how you do business?

Andy Ross Use of technology in education and how it can positively affect learning. Over my 25 years of working in this area I have seen many amazing results where technology has made a positive impact on learning.

EIIF: For an education company or for profit school that is looking to grow, what is the one thing they need to be prepared to do before meeting investors or before launching their product or service into the marketplace?

Andy Ross The solution needs to address learning, learning styles, instruction, data collection, and it should have a relationship component to it. The solution also needs to be flexible and not necessarily used during the tradition school day or calendar. The solution needs to address learning, advance learning, and credit recovery.

You can meet Andy Ross and his colleagues from Florida Virtual Schools, at the 11th Annual Education Industry Investment Forum.

Join now and receive a discount for early registration!
We also have discounts available for qualifying members who belong to non-profit organizations and public school boards.

Education Aide to Obama Campaign Dies

Terence Tolbert has died unexpectedly of a heart attack in Nevada, reports The New York Times at the CityRoom blog.

We are reporting it because it is a newsworthy story that directly speaks to the election campaign, which ends tomorrow.

Mr. Tolbert had served since 2006 as the New York City Education Department’s chief lobbyist in Albany and Washington. He had been poised to take a leading role in Mr. Bloomberg’s upcoming fight to convince state lawmakers to reauthorize the law, which expires at the end of June, giving the city’s mayor control of its public schools.

Someone close to Terence has also set up a memorial blog for the man.

We wish his family the best.

Education Industry Investment Forum is You

We've put up a new web site for the Education Industry Investment Forum.

Welcome to your network for the 11th Annual Education Industry Investment Forum.

Just in time for the election, and in the midst of the credit crisis, we're preparing for your participation in discussions on the following:

* Making business decisions based on expert forecasts of changes to No Child Left Behind and the Higher Education Act
* Marketing for your K12 or post secondary school to help you retain more students and increase scale in any economic climate
* The climate for post secondary lending and strategies for school operators that repair damage brought on by the credit crisis

We look forward to seeing you in Phoenix, Arizona in March.

Will the Real Education President Please Come Forward?

Seeing stories claiming Obama is going to win the presidency reminds me of a saying I coined recently to describe people who try to tell a story that has not happened yet.

It's like sending smoke signals before dawn. Lots of smoke, but not a light on to let anyone know the truth. We need more stories telling us the what-ifs, so that the electorate -- investors, school operators, analysts all -- can make our own decisions on November 4.

What if either of the two presidential candidates wins? What will they do with education?

For all the talk in the press about the future of the economy under Sen. Barack Obama, the Democratic presidential hopeful, and Sen. John McCain, his Republican challenger, we see hardly any solid stories on the future of education.

Where is the discussion in the mainstream press? What will these candidates do for the education industry.

We would like to have your ideas on what you think will happen? You don't have to tell us who you are voting for, but tell us, who has the better education package?

When we meet March 9-11, 2009 at the 11th Annual Education Industry Investment Forum, there will be some highly charged discussions about what just happened in November, and what it means for the industry.

Join those discussions now. Send your smoke signals. We're turning on the light for you.

Oregon's English-Only Law

We don't take political views very openly on this site, because we prefer to pass on the latest business relevant news. However, we thought people in the education industry would be interested in what the web site Opposing Views is doing with polls and user participation.

While Obama and McCain slug it out on the national stage, voters in individual states are considering legislation that could have widespread repercussions. In the first of a special election series, Opposing Views examines Oregon’s Measure 58, a proposal that would require “English immersion” in Oregon public schools while limiting foreign language instruction. Do English immersion laws help or harm students? Figure out where you stand now; your state may be next.

Look for more of their commentary online at the Education Industry Investment Forum.

Economic Recovery Initiatives Not Enough: Analysts

At the end of the day, the question being asked is, "How will this affect the investment climate for for-profit education in years to come."

Concerns are turning to worries, as financial market indicators plunged overnight in European and Asian markets, especially in the emerging markets class.

It looks like investors in Asia, Europe and perhaps the United States today will tell us that the bailout activity was either too little too late, or just generally too late.

We will be experiencing some tumultuous fallout financially in the next few years.

But IHT blog "Managing Globalization" thinks it is more likely that most investors are being 'myopic' and silly, sending stock prices down way beyond what they should be discounted for a recession.

With that in mind, is the world really coming to an end? If we are thinking ahead, would there not be some good deals for the education industry going forward?

What will this do to the investment climate for education? Please write in with your comments and we will post them here.

Be sure to also check out The Education Industry Investment Forum in Phoenix, Arizona slated for March 9-11, 2009

This conference will highlight analysis given by the leaders in Education investment and regulation, including:

Gene Hickok, senior policy advisor at Dutko Worldwide and former Deputy Secretary for Education

Who Will Be the Next Secretary for Education?

The two advisers to the Republican and Democratic parties debated at Teacher's College at Columbia University on October 21.

Lisa Graham Keegan, former Arizona Superintendent of Public Instruction and advisor to Senator John McCain (R-AZ), and Linda Darling-Hammond, the Charles E. Ducommun Professor of Education at Stanford University and advisor to Senator Barack Obama (D-IL) spoke about the future of education under the leadership of both potential presidents.

The debate's moderator, Susan Fuhrman, president of Teachers College, asks who each would want to be Secretary of Education. The two advisors do not answer the question directly but allude to two individuals.

Paul Vallas is mentioned. Vallas has since 2007 been the man in charge of New Orleans Recovery School District.

And Dr. Michael McGill is pointed out in the audience at Teacher's College, Columbia University, during the Democratic speaker's time. McGill was named Superintendent of the Year for his work in New York.

Students Worry about the Price of University Education

Students at 69 schools wrote over 1500 letters to the next US President. Only 164 were about education.

Those 164 letters can be read at the Letters to the President website, sponsored by Google and The Writing Project.



Here's a sample letter:

Let's talk about education. You want us to get the best one possible, right? Well, with the way things are going, that's not going to happen for many of us. College is getting more expensive every year. The price of college has skyrocketed 439% since 1982. The average student has $21,500 in college debts according to CNN.com. Is the level of education going up as much as the price? What can we do to change this? Should we have more financial aide programs or have more scholarships available to all students? Should we set up additional benefits to encourage students to attend college? How can you make every child in America attend school until the age of seventeen, but then not give them aide to ensure that they will be able to keep attending school if they want to further their education? I believe that to help our economy, our society should be more highly educated than we are today. More people should be able to get their college degree. One reason I believe this is that our economy is as majorly labor-based as it is logic-based. Many of the labor jobs in factories have moved overseas to countries like China because the price of production is cheaper there.

Putting New Thinking on the Stand

One of the great things about the upcoming Education Industry Investment Forum is that it provides a platform for innovators and iconoclasts to debate the future of education.

On March 11, 2009, founder of Princeton Review John Katzman and Unigo.com founder Jordan Goldman will discuss the role of online innovation in the future of for-profit education.

Why? In short, because they are two people who know intimately what it means to be entrepreneurial. And they are engaging speakers.

What makes John Katzman fun to listen to is his tendency to call things absurd that he thinks are absurd, like his belief that the SAT is not an accurate measure of a student's abilities. He said this in a recent PBS interview.

We need objective measures. If all colleges had were grades, then every teacher, every high school teacher in the country, would have complete control over your future. At the same time, the idea that one test is a perfect measure for several million kids going to several thousand colleges is absurd. You need a flexible system where you can be tested in the things that you are passionate about.

Katzman has now teamed with the Rossier School of Education at the University of Southern California to run an online community that accentuates current degree programs in Education. It's entrepreneurial, gutsy and an assertive game-changer in the education space.

And Jordan Goldman? He was an early instigator of industry-changing business ideas.

At 18, Goldman created Student Guides, a print publication that gave insight on the college selection process.

He's now done one step better than that and decided to go online, for free, and let students make their own pitches for their own campuses.

He's young, and he's very bright. He sees a future in the social networking and web 2.0 model for college admissions and selection.

He was able to create a model that transforms the possible student population of a school, because it allows more information about that school to be given in a way that makes sense to the potential student. In other words, Unigo.com let's students market their own school to people most likely to attend it.

...in the case of Unigo, it means prospective students who previously couldn’t afford to go on campus tours all across the country, who weren’t able to grab a current student by the arm and ask them questions – now they have a way to find an amazing range of authentic information right from their living rooms. Prospective students have a way to interact with one another and ask each other questions about these schools. And they have the ability to see each college from the perspective of someone just like them. Sure, Columbia is a great school. But is it a great school for African American students? What about students from California? Is it the same experience for a wealthy student as it is for someone a bit less well-off? How about a conservative student, or a gay student? Those are questions Unigo can instantly help you find the answer to. We want to move the focus away from overly broad rankings that don’t tell you much of anything, and over to “What’s the college that’s actually best for YOU?”

You can join them March 9-11, 2009 at the Education Industry Investment Forum.

Register now to benefit from early bird discounts. Early registration

Panic is Never Good

While I am not one to panic about market conditions, today's actions do draw up a bit of concern in my cubicle.

To keep on top of it, I have turned to Floyd Norris at the New York Times, who is blogging about the market collapse? readjustment? recessionary pricing? going on at the NYSE and world markets today.

Have a good one.

NYC Gifted Schools to Base Outside Manhattan Burough

In a change of tactic, Manhattan may be looking to place new gifted schools outside of the city limits in 2009. The story comes from the New York Times CityRoom blog.

Asked whether the Brooklyn and Queens programs would definitely open next year, Andrew Jacob, a department spokesman, said in an e-mail message: “That’s our tentative plan, but it’s too early to say that they will definitely open.” He said that would depend on the department’s ability to find a site, and sufficient demand from families whose children qualify.

The department also announced that all elementary school gifted programs would start in kindergarten next year. Last year, some parents were angered to learn that while their children qualified for gifted kindergarten slots, the programs available in their school districts did not start until the first grade.

Andy Ross, VP Global Services, Florida Virtual Schools

The EIIF is very happy to announce that Andy Ross, Vice President of Global Services for Florida Virtual Schools, is joining the conference to speak on March 10, 2009.

To offer some insight, I link to a NACOL paper that mentions FLVS about one of their programs. I offer it as some independent insight into what the school does.

NACOL's Credit Recovery Practices review

Florida Virtual School Credit recovery courses delivered by a state-led supplemental program Florida Virtual School (FLVS) is the largest online program in the United States, and one of the oldest.

In the early days of the program most of the program’s students were seeking Advanced Placement courses, accelerated learning opportunities, or scheduling flexibility. In recent years, credit recovery has become an increasingly important part of the program, to the point that nearly 20% of students in FLVS courses are seeking credit recovery, or grade forgiveness as it is referred to in Florida.

Unlike many online programs for credit recovery or at-risk students that use mostly (or entirely) a blended learning approach, FLVS primarily offers fully online, distance education courses that are self-paced. FLVS students who are recovering credit are not segregated into special class sections and mix readily with their peers. In many instances instructors are not even aware the students are enrolled in the course for credit recovery.

In addition to the fully online model led by FLVS teachers, FLVS is also partnering with nine school districts to provide online curriculum delivered by the local school district instructors. In these instances, the local school district provides the teacher of record and retains the FTE funding for the student. FLVS is also establishing physical e-learning centers in schools across the state where all types of students take FLVS courses on their school campus. FLVS provides the teacher of record and often the school provides a mentor or facilitator to provide additional assistance to the student.

“One of our challenges is to demonstrate the effectiveness of online learning for these students,” according to Brenda Finora, Public Affairs Liaison for Southwest Florida. “Some people still raise the question ‘If the students are not motivated enough to pass the course in the classroom, how can we expect them to be self-motivated in an online course?’ We find very little difference in the level
of motivation between students seeking credit recovery and other FLVS students. They all come to FLVS for specific reasons with a drive to succeed.” If motivational or behavioral issues do arise, FLVS provides counseling or refers the student back to the local school counselor to work with the student individually.

“As more data is gathered it confirms what so many of us believe, that online learning gives students seeking credit recovery the individual attention they need to be successful,” reports Cindy Lohan,eSolutions Manager for FLVS. Success rates for students recovering credit have been remarkably similar to rates for the entire FLVS student population. In the 2006-2007 school year, FLVS students who self-reported taking courses for credit recovery had a passing rate of 90.2%, similar to the 92.1% passing rate for the entire FLVS student population.

A significant number of online programs outside Florida use FLVS curriculum, and the use of FLVS online curriculum for credit recovery has risen dramatically in recent years. This growth, in part, drove the development of diagnostic testing as part of the FLVS courses. For example, pre-tests in math courses identify both the material the student has mastered and the material that is still problematic.

Diagnostic tests are being added to the FLVS courses most often needed for credit recovery.

Jordan Goldman, Founder, Unigo.com Joins Forum

We are happy to announce that Jordan Goldman, the young entrepreneur who founded Unigo will be joining the Education Industry Investment Forum to discuss student-led marketing for universities.

He joins a fantastic cast of speakers, including Michael Haggen, Deputy Superintendent for the New Orleans Recovery School District, and Arthur Benjamin, CEO of ATI, who will be speaking on the main conference day.

If you would like to register for the conference, please visit the main page for the Education Industry Investment Forum.

Is America Giving Up On Education?

Sequoia Capital Warns Businesses to Trim Expenses

This is a slideshow presentation making the rounds of the market in a panic.

Will G7 Meeting Guarantee All Interbank Lending?

Rumors are swirling. During a financial panic that has wiped more than 1/3 off the market value of several international exchanges, the G7 is preparing to meet in the US to solve the pandemic.

Marc Chandler, analyst at Brown Brothers Harriman, said despite the grim outlook, the G7 still has some options to help calm the storm.

"We are hesitant to spread rumors, but there is increasing speculation that the G7 meeting could take another major step and that is to guarantee all interbank lending," he said.

"This talk is having a demonstrable impact on the interest rate markets. It is difficult to evaluate the likelihood, but it is important to note that officials generally recognize that current measures are not yet sufficient to turn the corner of the crisis."

G7 Gathering to Solve the Market Collapse

Humility

The bloggers at 2Tor have pointed out an enlightening instance of candor and humility in education.

New Forum for Education Industry Executives and Investors

We've set up an Education Industry Investment Forum for you to join. Please sign up so that you can be among the first to receive information about changes to the event and to learn about new speakers.

You can also participate in lively discussions and debates about the industry, the executives you admire and want to meet, as well as the issues that will define the future of investments in the industry.

Arthur Benjamin, CEO, ATI

We are proud to announce that Arthur Benjamin, CEO of ATI, will be hosting a special executive master class on marketing post secondary education.

The master class will be held on March 9, 2009, in the morning, so participants are encouraged to mark their calendars and to be there early, as the session will fill up.

Stay tuned for the registration brochure at at the official Education Industry Investment Forum, which will be published in a few weeks.

For now, here is a short biography of Mr. Benjamin, a native New Yorker:

Arthur Benjamin was born in NYC and lived in that metropolitan area until leaving to attend Clark University in Massachusetts. Since then he has lived in numerous cities throughout the USA, England, Colombia (SA) and for a short time in Denmark and Spain. Currently, he lives in Delray Beach (FL), Dallas (TX) and Salt Lake City (UT).

Mr. Benjamin has over two decades of experience in marketing and sales, in school marketing and operations, and numerous years in corporate management. Prior to joining Datamark in 1993, his employment history included executive and sales positions at CBS, Group W, Major Market Television and Connecticut Public Broadcasting. He has started several companies, grown them, and sold them as well. He has been responsible for operations as diverse as the publication of a regional magazine, a TV production company, an ad agency, a media buying service and over 50 colleges. He has also led civic efforts including sharing responsibility for a $13 million capital campaign and co-developed a number of successful real estate subdivisions.

Mr. Benjamin was the Chairman & CEO of Datamark, Inc., the nation's largest comprehensive marketing company exclusively for colleges and proprietary schools and amongst the top 20 direct marketing agencies in the U.S. until 2005. He served as its President and thereafter Chairman & CEO having joined it in 1995 after serving on its board of directors for two years. In just 10 years, Mr. Benjamin successfully grew the company by over 2,000 percent. He was also Executive Vice President of its public parent company, eCollege, after it acquired Datamark, a technology corporation that creates the online educational platforms for numerous colleges and universities.

Mr. Benjamin joined ATI, a nationally-accredited group of private postsecondary schools and colleges, as its President & CEO in April of 2005, after serving on its board of directors, and currently serves as its Vice Chairman & CEO. Since then, he has dramatically expanded the depth and breadth of the management team, improved processes, and begun new initiatives the achievement of the future growth of the company. ATI expanded, in just the past twenty months, from eight to twenty campuses (15 in full operation and 5 in the build-out/approval process) under his leadership.

In 2006, he along with two partners founded EdExperts, a new comprehensive marketing company specializing in colleges and proprietary schools and employing unique best-in-class partnerships. Just last year, it grew 300%.

Late last year, in 2007, he was also instrumental in the creation of American Institutes, a group of private postsecondary schools training in the upper end of allied health fields. Primus Capital Funds joined Randy Proto (who will serve as its CEO), a life-long partner of Mr. Benjamin, and a group of investors including Mr. Benjamin (who will serve on its board) in the enterprise.

Mr. Benjamin is a former Commissioner of the Accrediting Commission of Career Schools and Colleges of Technology (ACCSCT), former chair of several organizations: the Utah Central Region Workforce Council, The Living Planet Aquarium, and Women Beyond Cancer; he is also a former board member of: the Utah State Workforce Investment Board, the American Heart Association and the L.A. Film School Foundation and former trustee of the Career College Foundation (AKA Imagine America Foundation). He has served on a variety of campaign finance committees for elected officials.

He currently serves as a board member of Franklin Templeton Bank & Trust, ATI Enterprises and the Florida Association of Postsecondary Schools and Colleges (FAPSC).

Mr. Benjamin believes that, in George Bernard Shaw's words, life is no brief candle but is a splendid torch that we've got hold of for the moment, and he's committed to making his burn as brightly as he can, while its in his care, before passing it on to future generations.

California Needs $7B Loan to Meet Schools Obligation

Three billion dollars of the $7B California Governor Arnold Schwarzeneger is requesting will go to to pay 1,000 school districts.

It's customary for California to borrow billions of dollars at the start of the fiscal year to fill its coffers until the usual flood of sales tax receipts comes in after Christmas and income tax receipts arrive in the spring.

"California is so large that our short cash-flow needs exceed the entire budget of some states," Schwarzenegger wrote.

The cash needs to be in the state's bank account by Oct. 28 to be available to fund a scheduled $3-billion payment to more than 1,000 school districts.

Citigroup Talks End, Wells Fargo to Buy Wachovia

Remember that Wachovia-Citigroup merger? Never mind that.

Wells Fargo is taking Wachovia in a US$15.1B all stock deal.

The Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp., but the Wells Fargo deal for Wachovia will be done without it. Shares of Wachovia and Wells rose in morning trading, while Citigroup shares fell.

"This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," Robert Steel, Wachovia's president and chief executive, said in a statement.

The Wachovia-Wells deal, announced Friday, comes in a turbulent time for banks and financial firms as they grapple with the ongoing credit crisis, which led to the recent bankruptcy of Lehman Brothers Holdings Inc. and the failure of Washington Mutual Inc.

"Wachovia Corp. shareholders will receive 0.1991 shares of Wells Fargo for every share of Charlotte, N.C.-based Wachovia stock they own, valuing Wachovia at about $7 per share."

Bank Limits Credit Lines to Schools

The entire New York Times article sits behind a registration wall, so here it is in full:

Bank Limits Fund Access by Colleges, Inciting Fears

By SAM DILLON and KATIE ZEZIMA
Published: October 1, 2008

In a move suggesting how the credit crisis could disrupt American higher education, Wachovia Bank has limited the access of nearly 1,000 colleges to $9.3 billion the bank has held for them in a short-term investment fund, raising worries on some campuses about meeting payrolls and other obligations.

Wachovia, the North Carolina bank that agreed this week to sell its banking operations to Citigroup, has held the money in its role as trustee for a fund used by colleges and universities and managed by a Connecticut nonprofit, Commonfund.

On Monday, Wachovia announced that it would resign its role as trustee of the fund, and would limit access to the fund to 10 percent of each college’s account value. On Tuesday, Commonfund said that by selling some government bonds and other assets held in the fund, it had succeeded in raising its liquidity to 26 percent.

Still, Wachovia’s announcement sent shock waves through higher education, sending hundreds of college presidents rushing to check their financial vulnerability on every front.

Some smaller colleges that had not previously arranged lines of credit were feverishly seeking to negotiate those on Wednesday. And some large institutions said they were facing, at the least, a major financial inconvenience as a result of Wachovia’s action.

The University of Vermont, for instance, said that about half of its liquid operating assets — $79 million — were invested in the fund.

“It appears that the asset is secure,” said Richard H. Cate, vice president for finance and administration at the University of Vermont, because, he said, much of the $9.3 billion is held in securities that will become available when they mature. “But we’re not real thrilled with the fact that we can’t access all of our money when we want it.”

Wachovia’s action was perhaps the most tangible signal yet that the credit crisis could have a powerful impact on higher education. Another sign came on Tuesday as Boston University, saying it needed to respond to the financial crisis with cautionary steps, announced an immediate hiring freeze and a moratorium on new construction projects. That decision was unrelated to the action by Wachovia, where Boston University was not an investor.

On Tuesday, officers of Commonfund held a lengthy conference call to provide details of Wachovia’s action to representatives of more than 900 colleges and universities, many of whom were upset, said W. Judson Koss, a spokesman for Commonfund.

“The whole issue is liquidity,” Mr. Koss said. “This is a fund that has been in operation for over 35 years, and is invested in nothing but Triple-A government and corporate paper, all top-notch equities.

“We’ve been going along just fine, but Wachovia had a liquidity concern. They asked, ‘What if there’s a run on the bank and we can’t redeem these securities?’ So they were the ones who pulled the pin on the grenade.”

Colleges have used the fund, formally called the Commonfund Short Term Fund, almost like a checking account, depositing revenues including tuition payments and withdrawing funds daily to finance payrolls, maintenance expenses, small construction projects and other short-term needs, college officials said.

Nearly 60 percent of the securities in the fund are scheduled to mature by Dec. 31, and thereafter would be available to investors, Commonfund said in a statement. When the remaining funds would become available was unclear. The fund said it was seeking a trustee to succeed Wachovia.

To date, none of the securities have defaulted, and all were continuing to pay timely principal and interest, the statement said.

But for the time being, some institutions that have relied on the fund were scrambling to secure money for operating expenses.

Augsburg College in Minneapolis is one of more than a dozen Minnesota colleges with investments in the fund. Augsburg was fortunate, its president, Paul C. Pribbenow, said, because its holdings were just $13,392.

“But this certainly raises the specter that we can no longer take anything for granted,” Dr. Pribbenow said. “It shows just how vigilant we need to become about every financial relation we have.”

The University of Akron had $800,000 invested in the fund, a small part of the university’s total portfolio of operating funds, which typically range from $100 million to $150 million in a semester, said John Case, the university’s chief financial officer. Shortly before Wachovia’s announcement, the university withdrew $80,000, but has since been unable to withdraw any of its remaining money, Mr. Case said.

Matthew Hamill, senior vice president of the National Association of College and University Business Officers, said, “This is a pretty significant event, in the short run, because it’s going to cause dislocation and uncertainty.” Mr. Hamill added: “My estimate is that in the long run, investors will wind up with their money back. But they don’t have access to cash in the short run, so it’s going to cause significant financial and operational changes.”

Molly Broad, president of the American Council on Education, which represents 1,600 colleges and universities, said: “A widespread credit crisis will affect a large number of our institutions very quickly. Those folks who’ve been saying that the economy could be seized by a liquidity crisis, well, it’s unfolding before our eyes, and it’s having an impact on colleges and nonprofits.”

At Boston University, President Robert A. Brown sent an e-mail message to faculty and staff members on Tuesday saying that the university would temporarily freeze hiring, with the exception of public safety employees and professors whose hiring process was under way, and that it would postpone all capital projects that had not begun.

Joseph Mercurio, the university’s executive vice president who oversees its budget, called the steps pre-emptive.

“We have a lot of economic uncertainties that have to do with the national economy,” Mr. Mercurio said, “and in light of those conditions we’re going to take some prudent steps right now.”

Allied Capital Covers Bankrupt Unit for US$150M

Followers of the Education investment industry will be interested to know what is happening at Allied Capital. The holding company has just paid out US$150M to cover the costs of bankruptcy proceedings for Ciena, one of the company's portfolio companies.

Financial distress collapses Ciena.

The company attributed Ciena's troubles to the uncertainty in the financial markets, which it said forced it to write down the value of its loans to businesses to the point at which Ciena became insolvent. It voluntarily sought Chapter 11 bankruptcy protection, and Allied stepped in to guarantee Ciena's obligations to its lenders.

Allied said it would use $150 million in cash and other liquid securities and may borrow $170 million on its revolving line of credit to cover Ciena's obligations. Allied also will guarantee a remaining balance of $10 million on Ciena's line of credit.

EIIF Welcomes Gene Hickok to the March 2009 Forum

The EIIF team is pleased to announce that Gene Hickok, Senior Policy Advisor for Dutko Worldwide and one of the most eloquent speakers on education in America will be speaking at the Education Industry Investment Forum March 9-11, 2009.

Gene Hickok, Senior Policy Advisor, Dutko Worldwide, image courtesy Dutko Worldwide site

Mr. Hickok is former Deputy Secretary at the U.S. Education Department and former Secretary of Pennsylvania's education agency.

Mark your calendars. For more information on the Education Industry Investment Forum, please visit the EIIF website.

Hickok profile at Education Week magazine:

Gene Hickok, seen here in his Education Department office, disdains the Washington insider culture. But those watching say he uses his charm and savvy to excel in that environment.

During six years as Pennsylvania's secretary of education, Hickok often faced a hostile roster of education advocacy organizations. He spent 16 years as a political science professor at Dickinson College, in Carlisle, Pa., where his conservative politics set him apart from other faculty members. And he helped coordinate the defection of several state schools chiefs from a leading Washington advocacy group in 1995.

But now, holding the No. 3 position in the federal Department of Education, Hickok seems to be acquiring a leadership style that allows him to blaze a path toward his educational and political aims— without burning bridges. Spearheading the implementation of the "No Child Left Behind" Act of 2001—the Bush administration's signature educational endeavor— he appears to be adopting a more flexible tone and easing aside the ideological blinders some say he wore to Washington.

The Financial State of the Union

The Education Industry Investment Forum has created a survey that asks for your opinion on the current financial meltdown?

Who is to blame? What happened?

Click Here to take survey

Where will this take us?

Click Here to take survey

Have we started a global recession?

Click Here to take survey

Results will be posted Tuesday afternoon.

Wachovia Did Not Fail, But Citigroup Takes Them Whole

It happened over the weekend. Wachovia and Citigroup worked with the government to secure another stunning transformation in banking caused by the subprime collapse.

According to an AP story, Citigroup will buy Wachovia's banking operations.

Citigroup Inc. will acquire the banking operations of Wachovia Corp., one of the nation's largest banks, in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.

The FDIC asserted that Wachovia didn't fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

Of course they didn't fail. Citigroup bought their US$42 billion in losses.

Notice that a government entity becomes a shareholder in a bank. Someone please correct me if I am wrong, but is this normal?

Wachovia to Merge with Citigroup?

Wachovia has started talking to Citigroup about a possible merger.

Friday's Panelists

Just before the weekend, but not before you are ready to leave your desk for home, here are some new commitments to the panels in March 2009.

The Education Industry Investment Forum proudly welcomes:

Vishal Garg, Founder, MyRichUncle.co
Mark Pelesh, Executive Vice President – Legislative and Regulatory Affairs, Corinthian Colleges
Jennifer House, President, Red Rock Publishing
Dayna Stewart, CEO, Camelot for Kids
Karen Symms Gallagher, Dean, Rossier School of Education, USC
Cathy Snood, Assistant Director, Huntington Junior College
Barbara Dryer, CEO, Connections Academy
Joy Smith, Director – Business Development, Florida Virtual Schools
Alfred DeSeta, President and COO, Penn Foster College
Kenneth Hartman, Academic Director, Drexel eUniversity Online
Michael Connelly, CEO, Mosaica Education
Toby Chu, CEO, CIBT Education
Rex Bird, President, Laurel Springs School
Michael Cooney, Chairman, Wisconsin Education Aids Board
David Dies, Executive Secretary, Wisconsin Educational Approval Board
Jo-Ann McDevitt, Vice President – Sales, Marketing and Business Development, Association of Education Publishers
Jeff Shelstad, Co-Founder and CEO, Flat Earth Knowledge
Christopher Stephen, CEO, Read How You Want
Neil Goff, CEO, Weekly Reader
Sandy Fivecoat, CEO, We Are Teachers
Michael Ross, Senior Vice President, Encyclopedia Britannica Online
Tricia Roth, Managing Director, Read How You Want
Malgosia Green, CEO, LearnHub

Today's New Panelists

EIIF announces some new panelists for the upcoming EIIF

The Forum will be held March 9-11, 2009 in Phoenix, Arizona.

Stay tuned for tomorrow's acceptances, we have some great speakers we will announce on Friday

Key Experts in Lending, Analysis, Investment and Strategy, Including:

Todd Nelson, CEO, Education Management
Mark DeFusco, Managing Director, Berkery Noyes
John Ebersole, President, Excelsior University
Stuart Udell, CEO, Penn Foster College
John Chubb, President, Edison Learning
Dr. Yoram Neumann, President and CEO, TUI University
Peter Leyton, Partner, Ritzert & Leyton
Michaël Bijaoui, Managing Director, MESA
Susan Wolford, Managing Director, BMO Capital
Michael Musante, Director – Government Relations, Edison Learning
Mark Jopling, Managing Director, Jopling Associates
Larry Brown, CEO, Beam Reach Education
Michael McQueeney, Managing Director, Summer Street Capital
Arthur Benjamin, CEO, ATI

China Banks Told to Stop Lending to American Banks

China tells its banks to stop lending to American banks for now.

I had earlier written on another blog that China's Central Bank was suffering from a potential lending crisis.

EIIF Announces New Speakers for 2009

The following speakers are coming to EIIF in Phoenix March 9-11, 2009:

Mark Kantrowitz, Founder, Finaid.org
George Bernstein, CEO, Nobel Learning Communities
Howard Block, Managing Director, Knowledge Investment Partners
Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III
Mark DeFusco, Managing Director, Berkery Noyes
Peter Leyton, Partner, Ritzert & Leyton
Ted Mitchell, Managing Director, New Schools Venture Fund
Charles Thornburgh, President, Kaplan Virtual Education
Matt Leavy, CEO, eCollege
Daniel Pianko, Principal, Noah Fund
Rita Ferrandino, Managing Director, ARC Capital Development
John Katzman, CEO, 2Tor and Founder of Princeton Review
Jordan Goldman, Founder, Unigo.com

and there are over 45 other names.

Stay tuned to the blog for the agenda, and please consider your company for a presentation at the 2nd Annual FuturEd Symposium where you could be one of five innovative companies presenting to investors.

You can also visit our homepage for the latest in registration news, and administrative information.

A white papers site is coming soon. That will be a one-stop resource for all of the information you need to stay ahead in the education industry.

FuturEd Symposium, Year 2 Application Online

If you want to present your company to a forum filled with investors, analysts and high-level executives in the for-profit education industry, you can fill out an application and send it to the conference production team at the Education Industry Investment Forum.

We'll gladly take a look.

Michael Milken Offers $186M for Nobel Learning

A phone call yesterday alerted me to the recent bidding action of Michael Milken for Nobel Learning Communities.

The Price: $186M, valuing Nobel at $17 per share, a little more than 33% over Nobel’s Friday closing price of $12.74.

That's evidence that even in a worsening economic climate, childhood care and learning is vital, valuable and can attract a premium.



Milken, who graduated from the Wharton School at the University of Pennsylvania, already owns a significant share of Nobel.

KLC of Portland, Ore., has more than 1,800 centers in 38 states serving more than 200,000 students under the Kindercare/Knowledge Beginnings and Childrens Creative Learning Centers names.

KLC’s parent, Knowledge Universe Education of Santa Monica, Calif., was founded by former junk-bond magnate Michael Milken and his brother, Lowell Milken.

Blesbok LLC, which Michael Milken manages, owns a little more than 3.86 million shares, or 37 percent of Nobel, according to Yahoo! Finance and Securities and Exchange Commission documents.

Unigo founder Jordan Goldman

Jordan Goldman, who founded Unigo by taking a business plan stencil from the Internet and filling in the blanks, now threatens to unseat the dominant college guidebook publishers with a free service that collects student-created reviews of their own schools and presents them to high school students looking for information they can't find in school-sanctioned info sessions.

A tremendously creative idea, but is it seasonal only? And will it be relegated to only offering reviews? It looks like the perfect platform for creating a social network scene like Facebook. Facebook, if you remember, was used only by students in universities before it was opened to include anyone who wanted to register. Currently, Facebook has over 100 million users.

It would be interesting to see Unigo slip into this domain and take audience share from Facebook.

Five Questions with John Katzman

John Katzman, CEO, 2Tor

New Speaker for Education Industry Investment Forum

EIIF is proud to announce that
John Katzman, the iconic founder of Princeton Review and the entrepreneurial energy behind the new 2Tor.com, will be speaking at the forum in March.

We ask him five questions about the industry:

EIIF: What act of strategic investment in the education industry by any player in the past five years do you admire the most, and what was its outcome?

John Katzman: Denver Public Schools investment in teacher comp reform. So far, so good—most teachers like it, and performance is up; I think this will prove a useful way-station.

EIIF: What industry genre will have the most influence in the future of education over the next five years?

JK: For-profit and hybrid colleges.

EIIF: If you could name any industry within education that requires the most change, what industry is it and what changes do you think it needs?

JK: Student finance. More transparency and simplicity.

EIIF: What inspirational idea outside of education has had a dominant effect on how you do business?

JK: Apple, which proves that product matters.

EIIF: For an education company or for profit school that is looking to grow, what is the one thing they need to be prepared to do before meeting investors or before launching their product or service into the marketplace?

JK: Explain how they will achieve both financial and educational excellence.

Digital Media and Learning Competition

Are you thinking of applying for the second annual Digital Media and Learning Competition?

HASTAC and the MacArthur Foundation held the first Digital Media and Learning Competition in 2007. A total of two million dollars was awarded to 17 projects representing compelling work in the field of Digital Media and Learning.

The second (2008) Competition similarly seeks to mobilize the field of Digital Media and Learning through a $2 million open call, supporting learning entrepreneurs, educators, communicators, and innovators. The Competition supports pioneers who use new technologies to envision the future of participatory learning.

The theme for this year’s Competition is Participatory Learning. Awards will be made in two categories: Innovation in Participatory Learning, and Young Innovators, a special category designed to promote the contributions of 18-25-year-old innovators to digital media and learning.

If so, we would like to talk to you.

Please contact Douglas Crets at dcrets [at] iirusa dot com.

Plurk and Brightkite

Two new web and mobile applications that will expand your professional and social networking horizons...

Plurktakes the Twitter example and puts it on a graphic time line, but allows your friends and acquaintances to react to your "plurks." The idea is visually stimulating and it is very easy to meet new people using the technology.

If you are familiar with Mini Hovels, which are sponsored at Korean web company CyWorld, then you will get this. You can design your own Plurk page and look great doing it!

Brightkite is an invite only mashup of mobile phone images, GPS location beacons and Google maps, among many other things. The application will keep track of where you are, show you on a map, and even offer a 360 Google Street View of where you are.

You can also do what you do on Twitter, typing in updates as they happen.

The American Economy: How Bad Is It?

Do you agree with these sentiments published in the German Der Spiegel this morning?

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that's changing. Bear Stearns, Lehman Brothers, Merrill Lynch -- overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and -- at least in Morgan Stanley's case -- have prepared themselves for the end.

"Nothing will be like it was before," said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. "The world as we know it is going down."

Or is it just hyperbole usually found in newspapers and magazines when market panic sets in?

The most breathtaking aspect about this week's crisis, though, is that the life raft -- which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac -- is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

"I fear the government has passed the point of no return," financial historian Ron Chernow told the New York Times. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams."

The story can be found here: Time to panic?

CGI Boosts Teacher Procurement Process in Canada

California company Ariba is helping out with a procurement system for the entire Ontario school system.

In the first phase of the marketplace, CGI will assemble an electronic retail environment in which educational institutions can order various goods and services. In the second phase, procurement groups will be enabled to issue and execute requests for proposals for major purchases.

"CGI was selected as our partner because it has demonstrated an understanding of OECM's vision and has the depth of experience that comes from successfully managing other electronic marketplaces in both Canada and the United States," stated Frank Erschen, acting president of the Ontario Education Collaborative Marketplace.

There's a non-profit in China that is doing this for the energy industry. I know that's not education, but I'd thought I'd put that out there.



CGI to build and run Ontario public education 'marketplace' in $40M contract

Princeton Review Founder to Challenge U of Phoenix

John Katzman, who founded Princeton Review and took on the standardized testing industry, will now take on the market that companies like University of Phoenix and Capella and Walden Universities, by launching an online Master's degree program with the USC Rossier School of Education, with his new company, 2Tor.

The story is:

2Tor is starting in a field with which Katzman is familiar, and where the need is great: teacher education. On Monday, 2Tor will announce that it is teaming up with the University of Southern California’s Rossier School of Education to create an online version of its master’s of arts in teaching, called MAT@USC. Within a decade, in Katzman’s grand vision, the online version of USC’s program — which now produces about 150 students a year — could produce 5,000 or more, helping not just California but many states meet the desperate demand for teachers in high-need (urban, rural, low-income) schools.

But it is not just about volume, say Katzman and Karen Symms Gallagher, the Rossier school’s dean. There are no shortage of teacher education schools, nor even of teacher prep programs offered online. But at a time when higher education institutions are facing significant pressure to increase the number of students they educate, and to be more innovative in how they do so, most of that growth and much of that innovation has been relegated, Katzman notes, to large for-profit providers (notably the mammoth University of Phoenix Online), niche for-profit institutions (Capella and Walden Universities) and ambitious but less prestigious nonprofit institutions, like Nova Southeastern University and the University of Maryland University College.

Katzman faces a challenge to build exclusivity and brand value in an education field where there have been few -- though remarkable -- successes.

What do you think of the technique, which appears to be linking with an esteemed partner to further both companies brands? Who will win in this deal? Is it the win-win that it appears, or more of a win, short-term for 2Tor?

"Philanthropy is the Gateway to Power!"

That's perhaps a cynical view. If you are a cynical person you might think that people get into philanthropy becuase they want to advance their own social status and the ethical brand of their company.

Is it time for a re-assessment of why people get into business, and what they do when they get there, in the first place?

A post at the Fast Company blog "Leading Companies for Good," made me wonder.

One thing has changed, however. By the 1980’s, corporations shifted their giving and service programs to be more aligned with the corporate mission and more strategic in accomplishing measurable outcomes for the company and the community. Volunteerism also became more inclusive involving employees of all levels, fostering team-building and community spirit, as well as productive service.

Look Deeper

Non-profits are not just exemplary institutions because they do something for the social good. That's a non-starter conversation. Of course, that is what they are known for. That may bring a considerable amount of social value to your company, if you are involved in one.

Non-profits a lesson in doing business

A large measure of financial and business methodology experimentation and laboratory work happens in non-profits. Non-profits are just as much a businesses as any other business. Cost efficiency, outcome efficiency and streamlining and scalability are just as important.

Look at the successful non-profit charter schools like KIPP and Green Dot Public Schools.

Successful non-profits in education like these schools are really good at pinpointing where education is failing, and driving a solution that leads to measurable outcomes, better efficiency in training, educating, maintenance and blending study materials with student choices and needs.

Those are lessons that from a macro point of view any business would want to learn to enable better strategies in reaching its consumers and driving profit and brand value. Success, even if it is not for profit, is about knowing what you are doing and doing it well within a confined set of restrictions, whether those restrictions are economic, cultural, regulatory or otherwise.