Sweden’s pioneering for-profit ‘free schools’ under fire
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JARFALLA (Sweden) (AFP) – In a Stockholm suburb, the Drottning Blanka high school looks more like an office than your traditional red brick institution with a schoolyard and gymnasium.
Like many of Sweden’s “free schools”, it does not have its own building – instead it rents a commercial premises together with other companies.
Here, performance is not just about how students do on tests.
“Free schools” owned by for-profit companies that pay dividends to shareholders is a business model that is being hotly debated ahead of Sunday’s parliamentary election.
Almost a fifth of students in Sweden attend one of the country’s 3,900 primary and secondary schools, which were first introduced in the country in the early 1990s.
Elsewhere known as voucher or charter schools, Sweden is the world leader in this type of schooling, which offers a wider choice of education but still follows the Swedish curriculum.
About three-quarters of the “free schools” are owned by joint-stock companies and are for-profit, according to official statistics.
The rest are either non-profit or run by foundations.
But in egalitarian Sweden, to ensure that the “free schools” are accessible to everyone, they are 100 percent state-funded.
“The Party’s Over”
Critics of the model deny the fact that taxpayer money intended for children’s education ends up in shareholders’ pockets.
“The party is over. The money from your taxes must go to schools, not to corporate profits,” thundered Social Democratic Prime Minister Magdalena Andersson 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 facilities, she believes.
“The pursuit of profit in Swedish schools must stop,” insisted Andersson, who is seeking the Social Democrats’ third straight mandate in the election.
Conceived as a right-wing reform in 1992 and supported by successive left-wing and right-wing governments since then, proponents of the scheme initially believed it would pave the way for a few schools run by individuals passionate about education.
Little did they know that it would give rise to a plethora of schools owned by private companies that are often listed on the stock market, such as AcadeMedia, Sweden’s largest education group with annual revenues of over $1 billion (one billion euros).
The group recently announced – in the middle of the election campaign – that it would distribute 185 million kroner ($17 million) in dividends to shareholders, or about a quarter of the profit.
In the capital’s suburb of Jarfalla, principal Pia Johansson says that her school’s parent company, Drottning Blanka AB, which runs 27 businesses and belongs to AcadeMedia, has a profit margin target of six percent.
She is against a 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, but admits that “maybe there should be some kind of limit.”
It is the approach preferred by the leader of the opposition conservative Moderates, Ulf Kristersson, who is challenging Andersson for the role of prime minister on Sunday.
“I have always said that dividends on well-run school groups are not a problem for Sweden. I am much more concerned about the bad state schools,” he said after AcadeMedia announced its dividend.
His party has called for endowment caps on schools that “perform poorly” academically.
Dividend ban?
While a large majority of Swedes are in favor of “free schools”, most are against them making huge profits, opinion polls show.
In July, Prime Minister Andersson appointed a special rapporteur to draw up proposals on how to proceed with the ban on handouts from schools.
The issue is tricky, as existing shareholders would likely demand costly compensation.
Detractors of the for-profit system say the model attracts irresponsible players and encourages owners to cut costs to maximize profits and inflate student grades to bring in “customers.”
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However, Marcus Stromberg, AcadeMedia’s CEO, insists that profits are necessary.
A company’s budget surplus allows it to invest in and develop its education business and provide “security for students”, as well as “create more school places”, he told AFP.
© 2022 AFP