Pearson Is Everywhere: Big Profits From Tests

Pearson: Always Earning

Pearson: Always Earning

Welcome back to Pearson Is Everywhere!

Last time we looked at who was writing the Common Core tests produced by Pearson. Today we’re looking at the massive profits Pearson is making from these tests.


From PRwatch.org:  Pearson, ETS, Houghton Mifflin, and McGraw-Hill Lobby Big and Profit Bigger from School Tests

Excerpts:

(Madison, WI)–School testing corporations have spent at least $20 million on lobbying along with wining and dining or even hiring policymakers in pursuit of big revenues from federal and state testing mandates under “No Child Left Behind” measures and the Common Core curriculum, according to a new analysis by the Center for Media and Democracy (CMD).

The expanded testing has fueled a testing boom worth nearly $2 billion annually, giving the main corporations getting the testing contracts a huge return on investment for their lobbying while generating a growing backlash from parents across the country.

[…]

Three of the four main testing companies have so far refused to sign the Student Policy Pledge against commercial data mining and, as documented by CMD, Pearson and ETS have a track record of lobbying against privacy protection for kids.

[…]

  • Pearson Education: Apart from $8 million spent lobbying from 2009 to 2014, Pearson also underwrote untold sums on luxury trips for school officials. A crackdown by the New York attorney general led to a $7.7 million settlement in 2013, and the shuttering of the “charitable” organization used for the scheme. The company is currently embroiled in a lawsuit in New Mexico for alleged bid rigging when landing an “unprecedented” $1 billion contract for K-12 testing with no other bidders, an allegation the company denied but which warrants greater scrutiny by policymakers.

Snippet from the full PR Watchdog report:

Pearson PLC, based in London, posted revenues of £6.12 billion ($9.43 billion with the current exchange rate) in fiscal year 2013. The same year, CEO John Fallon received a total compensation of £1.7 million ($2.64 million).

While “declines in state assessment contracts,” held back profits in 2012 and 2013, these were more than offset by contracts for federally mandated tests, such as the NAEP, which kept the company from out of the red on the North American market, which accounts for 54% of business.

Since then, the company has expanded its state testing presence dramatically. In the first half of 2014, Pearson administered nine million high-stakes K12 test for a total increase in testing volume by 38% over the same period in 2013.

In the past six months, company shares have seen a dramatic upsurge of 15.5% with a current market capitalization of $17.9 billion. During the same period, the NYSE Composite Index saw a modest 1% increase.

Caveat: Whether increased testing revenue contributed to this is unclear, but it comes in the wake of an “unprecedented” $1 billion deal to administer high-stakes testing for the member states in the PARCC consortium, as well as an expected $500 million dollar contract with Texas. Analysts predict a further “low-single digit boost in the new materials and testing business in 2015.”

Between 2009 and 2014, Pearson spent more than $4.5 million lobbying on Capitol Hill, and a further $3.5 million lobbying state legislatures, primarily in Texas, Florida and California. Vying for a renewed state testing contract worth $500 million, the company spent $580,000 lobbying in Texas last year.

 

Read the full report from PR Watchdog.

 

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About A.P. Dillon

A.P. Dillon is a Co-Founder and Managing Editor at American Lens. She resides in the Triangle area of North Carolina and is the founder of LadyLiberty1885.com. Her past writing can also be found at IJ review, Breitbart, FOX news, Da Tech Guy Blog, Heartland Institute, Civitas Institute and StopCommonCoreNC.org. Find her on Twitter: @APDillon_
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