For-Profit Schools Turn Eyes on At-Risk Kids

After two years of flunking classes and being sent to the principal's office, Jesse Schertell decided to duck high school. Phoning in his own excuses, Jesse faked his parents' voices.

Weeks passed before his father found out. Pleading not to go back, Jesse asked if he could attend Richard Milburn High School instead.

His parents were unsure. The for-profit, alternative high school's store-front entrance in downtown Haverhill, Mass., did not look like a school.

Of course, none of the 15 Richard Milburn High School, Inc. outlets really look like schools. One is in a bowling alley. Another is above a bread-factory store. Anywhere cheap, clean, and with easy access.

Like Richard Milburn High, which serves 48 school districts in seven states, a number of companies are emerging to meet fast-rising demand to educate students considered "at risk" of dropping out or being expelled from public high schools.

It is a booming and sometimes controversial business geared to the demands of educating bullies, inveterate slackers, troublemakers - many of them sensitive young people who can succeed in an atmosphere that offers more individual attention and more closely tailored academics than public schools typically can give.

The schools have gained ground as districts adopt zero-tolerance policies and expel the disruptive few. In Massachusetts, for instance, twice as many students got year-long suspensions last year compared to the year before, the state reports.

But some observers are concerned that booting out disruptive students - many of whom may drift away from school entirely - will boomerang back on society with higher crime rates. So more districts are outsourcing problem kids to for-profit high schools.

Robert Crosby, who created Richard Milburn as an offshoot of a company that educates military service people worldwide, touts a graduation rate of 85 percent at his schools.

"We can educate these kids better and cheaper than the public schools that send them to us," he says. "That's why they use us."

John Burruto, principal of Haverhill (Mass.) High School, has seven students attending nearby Richard Milburn High School. "We have kids with all kinds of family problems - and they bring those problems to school," he says "What the Milburn program does for us is take some of the pressure off."

Mr. Burruto says Richard Milburn "invites" students back into the classroom - but in small groups with individualized instruction, counseling, and immediate feedback from teachers. It also holds classes on a late schedule that makes holding an outside job possible - a key feature, since many students need the cash to feed and clothe themselves.

For-profit high schools usually charge a school district the same per-pupil fee as public schools receive - about $5,000 to $6,000, Mr. Crosby says. Costs are held down by modest overhead, a small staff, and the fact that many of the teachers are part-timers who work at the school in addition to teaching full-time elsewhere.

Some public schools have their own alternative programs. But many others see cost advantages and less red tape in handing off at-risk pupils.

But school districts like Haverhill are not the only ones eyeing the for-profit high schools. Wall Street investors are lining up, says John McLaughlin, president of the Education Industry Group, an investment research firm in Sioux Falls, S.D.

Four private companies, two public companies, and a host of regional companies educated about 125,000 at-risk students nationwide last year, with revenues of $150 million, Dr. McLaughlin estimates. Ombudsman Educational Services of Libertyville, Ill., Options for Youth in La Crescenta, Calif., Kids 1 of East Brunswick, N.J., and Richard Milburn High School are the largest of the private companies.

"This is probably the next significant growth area for the education industry," McLaughlin says. "The market is so large that I don't see these companies competing with each other."

Not everyone is convinced of the merits of the schools. Massachusetts recently rejected Richard Milburn's application to form a charter school, citing "little evidence of a track record" and "lack of clarity and coherence in the educational program," a state spokesman says.

"I don't want anecdotes and a story about little Suzy whose life has been changed," says Scott Hamilton, associate commissioner for charter schools at the Massachusetts Department of Education in Malden, Mass. "I want to see in black and white where they were academically when you enrolled them and where were they when they graduated."

Critics also charge that the program lacks the rigor that students would find in a regular school. Boosters counter that the program engages and educates many students who otherwise would have left school entirely.

"The Richard Milburn program was so enormously successful that the school board wanted to see us expand that," says Thomas Fowler-Finn, superintendent of the Fort Wayne Community Schools in Indiana. The district now has 70 students attending Richard Milburn, compared with 50 last year.

For students like Jesse also, it seems to be working. His parents agreed to let him attend Richard Milburn High School. To their delight, Jesse has been attending all classes and earning A's and B's this school year. He also holds down a job - something he didn't before. His father calls the change "incredible."

Jesse says he was amazed at the one-on-one help from teachers "who really cared." In his evening courses, he is just one of nine students - compared with more than 30 students before. "Before I couldn't keep up in math and then I wouldn't go to class because I felt stupid," Jesse says between classes at the school. "I'd get in trouble for dumb things. But I'm a different person now."

Crosby says such turnarounds result from teachers "who really believe these kids can learn." He points out that his school always uses state-certified teachers and gears requirements to match local schools. Yet he admits that the six-year-old company thus far has few statistical measures of academic success other than its graduation rate.

To Paul Schertell, Jesse's dad, such debate is academic, since he has seen his son go from flunking, skipping school, and running away from home to being an honor-roll student.

"Jesse never talked about school before," he says. "Now he comes home and talks about it. Honestly, this has been a whole new direction in life for him. He felt like a failure before. Now he feels like he's really accomplishing something with his life."

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