Profit

Sweden’s pioneering for-profit ‘free schools’ under fire

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JARFALLA (Sweden) (AFP) – In a suburb of Stockholm, the premises of Drottning Blanka Secondary School look more like an office space than your traditional red-brick institution with a schoolyard and gymnasium.

Like many “free schools” in Sweden, it does not have its own building – rather it rents commercial space alongside other businesses.

Performance here is not just about how well students do in exams.

“Free schools” owned by for-profit companies that pay dividends to shareholders are a hotly debated business model ahead of Sunday’s general election.

Almost a fifth of pupils in Sweden attend one of the country’s 3,900 primary and secondary “free schools”, first introduced in the country in the early 1990s.

Known elsewhere as voucher or charter schools, Sweden is a world leader in this type of education, which offers wider educational choice but still follows the Swedish curriculum.

According to official statistics, about three-quarters of “free schools” are owned by limited companies and are for-profit.

The others are either non-profit or run by foundations.

But in egalitarian Sweden, to ensure that “free schools” are accessible to all, they are 100% funded by the state.

“The party is over”

Critics of the model denounce the fact that taxpayers’ money intended for the education of children ends up in the pockets of shareholders.

“The party is over. Your tax money should go to schools, not corporate profits,” Social Democrat Prime Minister Magdalena Andersson thundered in July.

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She wants to put an end to “free schools” paying dividends. Schools that make profits should instead reinvest them in their establishments, she argues.

“The quest for profit in Swedish schools must end,” insisted Andersson, who is seeking the Social Democrats’ third consecutive term in the elections.

Conceived as a right-wing reform in 1992 and backed by successive left and right governments since then, supporters of the system initially believed it would pave the way for a few schools run by education enthusiasts.

Little did they know this would spawn a slew of schools owned by often publicly listed private companies, such as AcadeMedia, Sweden’s largest education group with annual revenues of over $1 billion. euro).

The group recently announced – in the midst of an election campaign – that it would pay out 185 million crowns ($17 million) in dividends to shareholders, around a quarter of its profits.

In suburban Jarfalla, principal Pia Johansson said her school’s parent company, Drottning Blanka AB, which runs 27 establishments and is owned by AcadeMedia, has a profit margin target of 6%.

She opposes the ban on dividends.

“It’s like any other business: people invest money, large sums of money,” she says.

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“It’s natural that investors want a share of the profits,” she adds, acknowledging that there “maybe there should be some sort of limit.”

This is the approach favored by the leader of the conservative opposition moderates, Ulf Kristersson, who is challenging Andersson for the post of prime minister on Sunday.

“I’ve always said that dividends in well-run school groups are no problem for Sweden. I’m much more concerned about bad public schools,” he said after AcadeMedia announced the payout. of its dividends.

His party has called for dividend caps for schools that “perform poorly” academically.

Dividend ban?

While a large majority of Swedes favor “free schools”, most oppose them making huge profits, according to opinion polls.

Prime Minister Andersson appointed a special rapporteur in July to draw up proposals on how to move forward with the ban on school dividends.

The question is tricky, as existing shareholders would likely demand costly compensation.

Critics of the for-profit system say the model attracts irresponsible actors and encourages owners to cut costs to maximize profits and inflate student grades to attract “customers”.

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Marcus Stromberg, managing director of AcadeMedia, insists, however, that profits are necessary.

A company’s budget surplus allows it to invest and expand its educational operations and ensure “student safety”, as well as “create more places in schools”, he told the AFP.