McGraw-Hill folds it cards. Can't compete in current high-stakes testing market.

McGraw-Hill/CBT is pulling out of the $1.1 billion high-stakes testing market. The reason? Too much volatility. It seems that the wave of political protests and the parent opt-out movement have forced McGraw to move to greener more peaceful pastures. And, as the common-core tests have rolled out, the overall market for state assessments has largely flatlined

According to EdWeek:

The market has also proved volatile, fraught with legal protests, mounting opposition from parents and politicians to testing, and major disruptions in online assessments for which vendors, including McGraw-Hill Education/CTB, have been blamed.

“Let’s be clear—people in the assessment industry are not living in poverty,” said Scott Marion, the associate director of the National Center for the Improvement of Educational Assessment, which consults with states and districts on testing. Yet the profit margins, he said, are “thinner than a lot of people want to believe.”

McGraw-Hill apologized in 2013 for interruptions after its digital testing service disrupted exams in Indiana and Oklahoma. About 3,000 students in Oklahoma lost their connections to the testing provider’s servers. And nearly 80,000 out of a half million Indiana students who took the company’s tests in the spring had their testing postponed and about 30,000 were kicked off of the testing platform on a single day of testing. One Indiana charter school has said the errors are to blame for its F grade from the state.

Twenty years ago, McGraw-Hill Education, Harcourt, and Riverside Publishing controlled large portions of the summative-testing market. Today, all of those companies have either largely abandoned that market or been absorbed by other testing entities.

Svigos buys another closed Chicago school

Svigos Assets bought Peabody. Put a charter in it. 

After they sat as empty blights on the community for nearly three years, the sell-off of closed CPS neighborhood schools has begun in earnest. Board members on Wednesday approved the sale of three vacant schools that were shuttered in 2013, providing "a small windfall of cash for its struggling budget".

Liza Balistreri is in charge of real estate at Chicago Public Schools and is running the sales of Near North Elementary in Noble Square, Overton Elementary in Bronzeville, and Von Humboldt Elementary in Humboldt Park.

Among the developers looking to make a profit on CPS real estate is Svigos Asset Management Corp. based in suburban Buffalo Grove. Svigos specializes in developing and managing commercial and residential properties, and owns apartment buildings in Lakeview, Logan Square and Albany Park.

Svigos is buying Near North for $5.1 million and plans to turn the school into "residential and commercial development". His company previously purchased the old Peabody Elementary for $3.5 million in 2014 only to turn around and sell space back to Rowe Charter School. Previously, district officials had said no closed school would be used as a charter school. The former Peabody was also developed as market-rate housing.

Paul Svigos has been a regular campaign contributor to Rahm Emanuel. The well-connected Svigos family has also made big contributions to the Daley's and other Democratic Party candidates.

Svigos was a former top Merrill Lynch stockbroker who the firm fired in October 1992. He hasn't been allowed to practice brokering since. But he recently won a huge settlement in his court battle with Lynch over the firing.

Svigos also runs the Fresh Farms grocery chain.

Wall St. public school strategy: Loot, pillage, burn...

Sen. Mark Warner (D-Va). - Reuters

The Senate has passed an amendment to new proposed federal legislation, which would steer hundreds of millions of dollars intended for impoverished school districts and classrooms, into the pockets of Wall Street consultants. The legislation, authored by Sen. Mark Warner (D-VA) was tucked into the Senate version of a massive K-12 education funding bill currently up for congressional reauthorization.

Among the chief proponents of the congressional bill was the Center for American Progress (CAP), a Washington, D.C., think tank that is closely associated with Bill and Hillary Clinton.

Bank of America, which made fees off of school district swap deals made in Chicago and Denver, has donated at least $50,000 to the Center for American Progress. Other major donors to the Center for American Progress include the Bill and Melinda Gates Foundation, which has given at least $500,000, and the Walton Family Foundation (of the Walmart fortune), which has also given at least $500,000 to the think tank. Both the Walton and Gates foundations have partnered with the Boston Consulting Group.

David Sirota at IBT is hot on the trail. He writes;

As budget-strapped Chicago follows a mass school closure with a new plan to layoff more than 1,400 teachers, one set of transactions sticks out: the city’s moves to refinance $1 billion in debt through complex financial instruments called swaps. The deals were spearheaded over the last few years by financial advisory firms brought in by the city to help find money saving efficiencies. Instead of saving money, though, the Windy City took a big hit: The school system has lost more than $100 million on the transactions and has paid millions in fees to its financial consultants.

 Chicago is not alone. School districts across the country have been increasingly relying on high-priced consultants and Wall Street firms for financial and management advice. While proponents say many of the ensuing consultant-driven initiatives have resulted in cost savings, critics note that other initiatives have resulted in investment losses, layoffs and school closures. What is clear is that school districts’ reliance on outside advisers has created business opportunities for the financial industry. And now, thanks to an amendment to federal education legislation moving through Congress, that lucrative market for financial and consulting could become even more flush with cash -- specifically, with federal money meant for impoverished school districts.

The amounts that consulting firms can earn for work on public school policy can be eye-popping. In Philadelphia, the Boston Consulting Group was reportedly paid $230,000 per week for its work pushing for privatized education services and closures of up to 88 schools in the city. 

No wall left between corporate world and venture philanthropy

“There’s a reason why corporate America exists, and there’s a reason why philanthropic organizations exist,” said David Cornfield, a professor of pediatric pulmonary medicine at Stanford University. “When that distinction becomes invisible, it becomes very difficult to know where philanthropy ends and venture capital begins.” -- Washington Post

Cornfield was responding to the rise of venture philanthropy in the field of medicine and pharmaceuticals where non-profits like the Cystic Fibrosis Foundation have earned billions through their investments in drug companies. While such investments have sometimes led to research breakthroughs, the trade-offs raise serious question about the power and politics of big philanthropic organizations.

Robert Beall, now in his fourth decade at the CF Foundation and one of the top-earning chief executives in the nonprofit world (Beal makes more than $1 million/year), says he is aware of the concerns and criticism prompted by his $3.3 billion Kalydeco deal last fall. Among them: that such a financial bonanza might discourage future contributions from supporters; that the foundation should be sharing its billions more directly with patients; that the group should have pushed harder to lower the price of Kalydeco and subsequent drugs.

There's no bigger player in the field of venture philanthropy that the Bill and Melinda Gates Foundation which has used its public investments to unduly influence public education policies. But it's the foundation's' profitable private investments in giant global corporations, many of which have done great harm in the world, that have drawn the greatest scrutiny.

HERE'S THE LATEST... The Gates Foundation is under investigation in a 2014 India Supreme Court case for funding Merck’s HPV vaccine trials of Gardasil, despite knowing the serious adverse reactions, injuries and deaths caused by treatment. According to a report by published by Narayana Kumar in The Economic Times of India, several tests had been conducted in 2009 on 16,000 school girls between the ages of 9 and 15 in Andhra Radish, India. Through the vaccine trials, 120 girls became seriously ill and seven died. Those who fell ill suffered from adverse reactions to the vaccination and experienced symptoms including seizures, severe stomachaches, headaches and mood swings. Consent forms to oversee the HPV vaccination were illegally signed by wardens from the hostels where the young girls resided or by illiterate parents via their thumbprint. Many young girls and their parents did not understand the tests or the risks entailed until they were significantly involved in the trial.