Private equity is getting into the special-education business. It's not all going smoothly.
Tom Sibley
- BI just published an investigation into special-education-focused schools owned by PE firms.
- Cost-cutting to maximize profits has some saying that quality has suffered.
- It's an important story you should read.
My colleague Meghan Morris just published an investigation into what happened to a chain of special-education-focused private schools when a private-equity firm took over.
As you might guess, it wasn't all good.
It's an important story because, unlike an investment in, say, a button factory or a call center, this company has a lot of power over some of our most vulnerable young people.
Meghan found that cost-cutting and other practices led some parents to believe their kids were getting a lesser education. For its part, the school chain said it'd made investments in staff and facilities under PE ownership.
Private-equity firms have been buying into hospitals and healthcare in recent years. There's some research suggesting this has led to worse patient outcomes. And in March, the Federal Trade Commission announced it was investigating PE's potential detrimental effect on healthcare.
Meghan's story is something every parent — and every taxpayer — should know about. Go read it here.