Private Equity in Education: How Wall Street Profits from a Public Good

The report examines how private equity firms profit from the U.S. education market, which was estimated at $1.1 trillion in 2020. It details the consolidation of curriculum and testing services by firms like Veritas Capital, the rise of outsourced staffing through companies like Education Solutions Services, and the risks associated with student data management by firms such as Vista Equity Partners. The document also analyzes the negative outcomes associated with private equity-owned for-profit colleges, charter schools, and early childhood education centers, arguing that a profit-driven model often conflicts with student interests and public good.

• Private equity firms are increasingly consolidating the K-12 curriculum and testing market. For example, Veritas Capital owns Cambium Learning Group, which served 94 percent of U.S. school districts as of 2021, and Houghton Mifflin Harcourt.
• The use of outsourced staffing firms to address teacher shortages can lead to lower pay and fewer benefits for educators. Education staffing companies generated $1.2 billion in revenue in 2021, but some virtual teachers are paid between 20 to 30 dollars per hour, which is below the national average.
• Private equity-owned companies collect extensive and sensitive student data, including citizenship status, medical diagnoses, and religious affiliation. Vista Equity Partners has acquired 27 education companies since 2015 that utilize such data for predictive analytics and product development.
• Student data security is a significant concern, as evidenced by a cyberattack on Illuminate Education (a portfolio company of Insight Partners) that affected approximately 3 million student records across several states, including New York, California, and Colorado.
• Private equity investment in early childhood education often lacks union protections for workers. Four of the five largest for-profit childcare centers are owned by private equity firms, serving nearly 450,000 children as of 2017.
• Some private equity-owned charter school networks, such as Pansophic Learning's ACCEL Schools, utilize real estate strategies to profit from public funds by renting buildings back to the schools they manage.
• For-profit higher education institutions, often owned by private equity, show significantly lower graduation rates for Black students compared to public or private non-profit universities. For those entering in Fall 2012, the six-year graduation rate was only 14.2% at for-profit four-year institutions.
• The U.S. Department of Education found that Westwood College, owned by Housatonic Partners, misled students regarding employment prospects and salary outcomes to induce them to take out loans.

APA

Private Equity Stakeholder Project (n.d.). Private Equity in Education: How Wall Street Profits from a Public Good. https://pestakeholder.org/wp-content/uploads/2022/12/Education-report-design_v3-1.pdf

Chicago

Private Equity Stakeholder Project. Private Equity in Education: How Wall Street Profits from a Public Good. n.d. https://pestakeholder.org/wp-content/uploads/2022/12/Education-report-design_v3-1.pdf.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=Private Equity in Education: How Wall Street Profits from a Public Good |url=https://pestakeholder.org/wp-content/uploads/2022/12/Education-report-design_v3-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderprojectndprivate, author = {{Private Equity Stakeholder Project}}, title = {{Private Equity in Education: How Wall Street Profits from a Public Good}}, institution = {Private Equity Stakeholder Project}, url = {https://pestakeholder.org/wp-content/uploads/2022/12/Education-report-design_v3-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }