Making the Grade: The State of the Sector Heading into a New Administration

It is speculation season as we navigate the transition from one presidential administration to another, with the added wrinkle of the as-yet undecided composition of the U.S. Senate. While a great deal of press coverage has been devoted to policy predictions, only a handful have addressed implications for those providing products and services to schools and districts.

The buzzword for the Obama education team was “innovation” and for the Trump team it has been “choice.” The Biden camp is currently hovering somewhere between “teachers” and “equity.” If the incoming administration can pair this orientation with some commitment to “innovation”, it could be a potent combination for students and broader K-12 stakeholders. 

To that end, this month we share a few observations on where the K-12 “industry” may be headed.

The State of the Sector Heading into a New Administration

And the incoming Secretary of Education is…?                                                          While the choice may signal broad policy goals, the reality is that the near-term exigencies wrought by the pandemic and the economic challenges facing many states are likely to significantly constrain the policy portfolio of the incoming Secretary and the Biden administration more broadly. While the considerable speculation that the Secretary could be someone with strong ties to the teachers’ unions may be disheartening to segments of the edtech community, the need for innovative technology-based solutions to the constraints imposed by Covid is likely to demand a constructive stance by the department toward the private sector.

When will we have CARES Act 2 and how big will it be?                                           State budgets are under strain and expected to decline far beyond levels experienced in the Great Recession. And while initial CARES Act funding played a critical role in supporting both technology and health and safety spending for districts and schools this year, nearly 90% of those dollars are expected to be expended by the end of December. For those states heavily dependent on state formula funding and/or with particularly vulnerable economies (e.g., oil, gaming, tourism), further federal stimulus aid to backfill the shortfall is paramount. While the outcome of the Georgia Senate run-off elections in early January could influence the scale of CARES Act 2, we expect it to provide greater funding for K-12 than ARRA.

Considering the budget landscape and ongoing challenges amidst the pandemic, next spring’s K-12 sales cycle could be another challenging one for suppliers, with many segments contracting and a select few expanding. Renewal strategies and customer success initiatives should already be a point of emphasis for those with existing school and district relationships. Winning new business will likely favor incumbents and those players powering high-quality, technology-enabled instruction; delivering blended academic support services models to address learning loss; and serving ELL and special needs students effectively, among others. Meeting students’ social emotional learning (SEL) needs are also seen as paramount, but a pathway to meaningfully funding initiatives may remain elusive absent specific directives. We will explore dynamics in this space this spring (2021) with follow-on work to Finding Your Place, our K-12 SEL ecosystem analysis.

A time of disruption                                                                                                  The pandemic exposed systemic weaknesses in public-school systems throughout the year as gaps between “have” and “have not” communities were exacerbated, marked by students’ digital isolation and many districts’ focus on basic necessities such as food and shelter, rather supplemental learning and effective remote digital tools. State departments of education struggled to demonstrate leadership and guidance to local communities, and tensions flared among various stakeholder groups as back-to-school plans seemingly disappointed everyone.

This dissatisfaction has catalyzed an outflow of public-school students to “alternative” models for those who could afford it, with varying amounts of educational structure and rigor. Some businesses have pivoted aggressively to serve this demand spike, whether by enabling and powering small learning communities or delivering more consumer-oriented instructional resources and services directly to families. How durable and broad-based this dynamic will be come Fall 2021 remains an open question, including the magnitude of its potential impact on public-school systems.

We anticipate that micro-school and homeschool models will continue to benefit through and beyond the current crisis, even if the Biden administration proves less friendly to the “choice” movement. Academic support services that can close learning loss gaps for students left behind should also see renewed interest from districts and investors; the National Student Support Accelerator illustrates the type of initiative emerging from the pandemic that addresses fundamental issues of equity and academic growth, while also catalyzing business model innovations for entrepreneurs and established businesses. In addition, the expansion of family spending on discretionary, supplemental educational resources – ranging from tutoring and extracurricular educational experiences to more product-based digital subscriptions activity-books – may also persist across all demographic segments. We are actively testing these and other consumer-demand hypotheses with plans to share initial findings early next year.

Whither K-12 assessment?                                                                                      While current Education Department leadership did not intend to extend assessment waivers to states based on ESSA, the incoming Biden administration may be more generous and offer modifications. In combination with the announced NAEP cancellation this spring, the implications could be significant – two years without consistent state-level assessment data on student performance.

This situation should accelerate opportunities for providers with rigorous, evidence-based assessment models tightly coupled with instructional programs and intervention resources. These may be integrated product solutions or partner-led models; in either case, they should credibly deliver teachers and school leaders with insights and recommendations into student performance trajectory and gaps.

Simultaneously, this assessment “pause” could spark a new window of innovation for testing and measurement in K-12. With traditional high-stakes exams under pressure in 2020, there may be openness among districts, postsecondary institutions, and education leaders to rethink the form and modality for evaluating academic performance and individual competencies. Where previous efforts at alternative, innovative measurement models have stalled, a new urgency to assist and accelerate students may prevail.

More K-12 learning platforms and online models?                                                The K-12 market has always supported a variety of learning platforms and virtual learning models. When compared to the postsecondary ecosystem of comparable solutions, K-12 is unruly and fragmented. But the pandemic may be changing that. Selected players – led by Google Classroom – have experienced explosive growth, while newly funded, high-profile initiatives such as ClassEdu (i.e., “Class for Zoom” from former Blackboard CEO) and Engageli (i.e., led by Coursera co-founder) are garnering considerable attention and institutional interest.

One of the repercussions of this pandemic period – regardless of the new administration’s policies – will be a heightened need, if not requirement, for states and districts to have comprehensive academic disaster recovery plans in place. For some districts, this will take the form of more robust digital teaching and learning infrastructure, paired with an experienced cadre of online educators. In other communities, partnering with established and emerging virtual learning providers will be the best path. In all cases, a likely outcome is districts’ need to have a credible, “always-on” virtual or remote model for some portion of their student population.

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Even this week, talk of a new federal stimulus plan is forcing its way back to the headlines. Paired with the imminent roll-out of a COVID-19 vaccines, here’s to the promise of better things ahead for our students, teachers and school leaders.