19 Pros and Cons of Privatization of Education

Educational leaders are experimenting with new ideas, programs, and approaches to help turn around the public schools in the United States that are in crisis. Changing economic circumstances are leaving some districts with a shortfall of funds to the tune of millions in a single year. As the institutions struggle to meet their educational goals while dealing with a recessionary budget, some school boards, teachers, and parents wonder if the privatization of education could be a way to solve some core problems.

A public school receives funding through local, state, and national tax revenues. Some communities choose to pay more toward their schools by voting for a higher levy on their properties or additional taxes in other ways. Others choose to pay less toward their educational infrastructure. These factors, along with the test scores produced by the school, help to determine the size of the budget. Every community has a specific formula it uses.

When you compare the results from private schools to those that the public districts generate, the pros and cons of the privatization of education deserve consideration since the former usually outperforms the latter in several key categories.

List of the Pros of the Privatization of Education

1. Privatization typically lowers the tax rate for each community.
When public services undergo a privatization process, the result is a greater efficiency in the implementation of needed resources. Most communities will see a significant reduction in the amount of taxes they pay for the service. It can reduce the number of administrative services that are necessary, create lower costs for needed supplies, and improve the classroom structure all at the same time. Larger districts could save up to $300,000 per year when they decide to privatize the process.

Tax credits in the state of Florida saved over $42 million by offering $3,500 scholarships to qualifying families, even though its cost of implementation was about $12 million.

2. There are increased levels of efficiency.
When we look at the privatization of education, this advantage is the one that generates the most excitement. There is no incentive for the government to be efficient because profitability and viability are concepts that are not needed. The school will be there whether or not it does a good job because there is a legal mandate to provide educational facilities. The private sector must show results to continue operating. Some districts who decide to privatize certain functions can save up to 80% of their costs by outsourcing or hiring specialists to complete specific tasks.

3. It reduces the political influence in the school system.
Kids are going to school so they can learn. They need an education to help them decide what they want to do with their life. Reading, writing, and arithmetic are still core subjects that will turn today’s kids into tomorrow’s leaders. Instead of letting the politicians decide what students get to learn, the private organizations can work with parents to design customized curricula that will benefit the needs of the community. It will also eliminate the problematic structures that can cause a lack of classroom consistency, such as Wisconsin’s A10 program to reform public school budgets and applications.

4. There are several methods of privatization to consider.
The transfer of government services or assets can happen through a combination of different strategies. Competitive bidding is the most common option because it allows the legislature to transfer or oversee the process where the private company bids to provide services, take over asset ownership, or handle both. There are extensive policies and procedures at all levels that control the bidding process to ensure the selected organization is the best option.

Vouchers are another way that the privatization of education occurs. This option allows families to choose either a public or private provider by creating cost offsets with targeted funds. The government can also sell property directly to a commercial provider if there is a need to privatize the educational system.

5. It allows students to have more choices about their education.
The privatization of education works to help every student find the best possible school within their reach so that they can earn their future success. Vouchers make it possible for a student who lives somewhere with a poorly performing public school to attend a private school for an improved experience. Other privatization efforts create similar outcomes without the need for extensive traveling. It is a way for families to make empowered decisions for themselves or their children because there are more choices available to them.

6. Privatization encourages more competition.
When the privatization of education occurs, then public schools have more competition. Even if an organization takes over an entire district, there is internal competition to create the best student body possible. When this advantage is present, then there is more innovation in the learning processes offered because parents will want to use the best approaches possible. That means each community can get more value out of its investment while teachers and administrators can still find employment in their preferred field.

7. This process eliminates the issue of church-and-state separation.
One of the reasons why voucher programs are controversial in some areas is because some parents can use them to pay for a religious education. The privatization process eliminates this issue because it allows an organization to take over the existing educational infrastructure. Families can send their children to schools based on the facts taught instead of the spiritual lessons learned.

That doesn’t mean religious schools should be avoided. This benefit is about keeping the concepts of public and spiritual life separate as indicated by the legal statutes in the United States.

8. Privatization can work with the public structure.
One of the latest innovations in the public-private partnership for schools in the United States is the charter network. These institutions are still part of the public school district in most situations, but it is also allowed to operate more like a private educational program. That means parents don’t have a tuition cost to pay. The teachers, administrators, and parents have more influence over the decisions that can be made for the school since the local board doesn’t have full control.

This advantage can help to alleviate the concerns of taxpayer funding going toward religious studies without compromising the quality of the education received.

List of the Cons of the Privatization of Education

1. It can lead to even higher costs for the public to pay.
Although the goal of the privatization of education is to lower the costs for each community, the opposite impact usually occurs. The only way it can be cheaper is if there are organizations already prepared to step in to take over the process. It is not unusual for the expenses of a school to rise by 60% or more when there is a transition from the public approach to the private one. That means a difference of thousands of dollars per family, which may not always product the better grades or graduation rates that are wanted.

2. There can be a decline in the overall service quality.
When the privatization of education occurs, then there can be a reduction in the quality of the services and classes that students receive when going to school. The reason for this disadvantage involves the need for profitability. A private company must be profitable, or at least not lose money, if it can provide essential and useful services. That could mean the new agency hires the teachers who want to work for the least amount of money, skimping on support staff, and even keeping utility costs down by implementing specific policies that limit technology use.

3. Privatization leads to less flexibility.
Even though having politicians involved with the educational system is not always beneficial, there is more flexibility available with a public system because of this structure. If something needs to change so that kids can have the classroom they deserve, then legislators can pass new laws while in session that can make this outcome happen. The same cannot be said if the privatization of education occurs.

Politicians are bound by the decisions made by the organization providing services. Some of the contracts can be lengthy as well, which means you can’t make provider changes for 20, 40, or even 100 years in some situations. If the outcomes are not there, then a poorly written contract could hold an entire community hostage for years to come.

4. There are corruption issues to consider.
The goal with the privatization of education is to remove the element of special interest money and lobbying efforts from the school system in each community. Although this option does make that happen, it creates a new problem. Companies can compete for the contracts to provide services, which means the doors become open to unscrupulous behavior. The government is still going to choose which company provides services to each community, so there is a financial incentive on both sides to create a paid relationship. Instead of looking for the best service provider, some look for the most money.

5. It does not guarantee an improvement in the classroom experience.
When discussing the pros and cons of the privatization of education, then the primary benefit is the option to have more choices. Instead of being assigned to a specific neighborhood school, parents can use the new funding structure to take advantage of the best schools in their community. That advantage only exists when there are alternative schools that have a reputation for providing a better educational experience.

Even if you can choose from seven different schools with a privatization effort, you won’t see an improvement in outcomes if all of them have poor quality rankings.

6. It would require changes to the accountability efforts already in place.
Private schools (including religious institutions) are usually exempt from the mandatory standardized testing that occurs in the public system. These tests are useful in determining where a student’s learning status is compared to their classmates and other kids their age. If we decide to pursue privatization of education as a community, state/province, or country, then there must be additional efforts taken to ensure this information becomes available.

This accountability comes at a higher cost, but it could be cheaper than a voucher program that lets parents transfer kids whenever they attend an under-performing school. If this change does not take place, then tracking performance could be much more challenging.

7. Student performance is usually equal between public and private schools.
The goal of the privatization of education is to save money, but it should be noted that children perform equally well in either setting. Some students, including those in religious schools funded by voucher programs, actually perform worse than public school students. There are alternative ways for school districts to save money, from a four-day week to year-round schooling with extended vacation times. Most districts have spending lines in their budget that can be cut as well without sacrificing the classroom experience.

8. It would change the staffing qualification requirements.
Private schools in the United States have fewer rules to follow when hiring teachers and staff. Although discrimination in several areas is illegal, religious schools that could qualify for support can mandate specific spiritual criteria for their staff to follow. That can mean certain lifestyle choices may not be welcomed at the facility. There tends to be more student shaming in the private setting as well, and this disadvantage can apply to kids or parents who dare to challenge the religious or spiritual views of those at the school.

You would still have the right to contact an ombudsman to discuss your situation, but there are fewer tools available to families when looking at the potential future of the privatization of education.

9. Some families might not be able to afford their school options.
We have already seen with the school voucher programs that the funds that some families receive is not enough to cover tuition expenses. Low-income families would struggle in a privatized environment because there could be higher tuition costs to pay. Even if taxpayer funding still occurs for the school, a private institution could theoretically charge families any price for classroom access. Unless there are legislative controls in place to prevent this issue, many struggling households would not use what becomes available to them.

We’ve already seen this outcome play out in cities like Cleveland. When the voucher doesn’t cover the entire tuition expense, then families don’t use the money because they can’t afford the switch from a public school.

10. Market forces don’t always create cost reductions.
The idea of privatization is that it would create more competition in a community. This process would improve the quality of the education received while lowering its cost to stay effective. Competition requires a desire to be present in that community in the first place. If there are under-performing schools in low-income areas that struggle to bring in any funding, then a private company isn’t going to take over that facility. If the school becomes unprofitable, they will shut it down.

Scarcity only works if there are multiple choices available to parents. Since most school districts only have 1-2 elementary schools, a single middle school, and then one high school, the concept of privatization struggles to function as it should.

11. There could be less overall quality.
Competition can work to reduce costs in the educational field, but it can also cause a race to the bottom in funding and resources. There could be so many new schools in a community that there wouldn’t be enough people to fill the open positions. Some districts might struggle to receive any applicants because of their geographic location. There could also be increases in the teacher-student ratio that may challenge even the best students to stay focused on their learning instead of the distractions that happen around them.

Verdict of the Pros and Cons of the Privatization of Education

The pros and cons of the privatization of education give us examples of how it can work, and why this process doesn’t always create the intended outcomes. There must be integrity from the service provider, just as there must be in the public sector, for the educational process to be beneficial to all parties.

Even though the private sector is seen as being morally and ethically better than public services, that perspective is based on myth. Long-term contracts can be negotiated through bribery just as changes to the public educational system can occur because of the funding of special interests.

That’s why it is up to each family to determine what the best options for their schooling needs will be. If that means going to a private school, then use that choice if you can afford it. Take advantage of the mostly free public schools in your community. Then encourage strategic privatization, such as the outsourcing of janitorial work, so that you can save money without sacrificing the classroom experience.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.