No profit left behind: In the high-stakes world of American education, Pearson makes money even when its results don’t measure up.

/ 10 February 2015 / Shawna
Stephanie Simon, Politico, February 10, 2015 

Javier Jaén for POLITICO

The British publishing giant Pearson had made few inroads in the United States — aside from distributing the TV game show “Family Feud” — when it announced plans in the summer of 2000 to spend $2.5 billion on an American testing company.

It turned out to be an exceptionally savvy move.

The next year, Congress passed the No Child Left Behind Act, which mandated millions of new standardized tests for millions of kids in public schools. Pearson was in a prime position to capitalize.

From that perch, the company expanded rapidly, seizing on many subsequent reform trends, from online learning to the Common Core standards adopted in more than 40 states. The company has reaped the benefits: Half its $8 billion in annual global sales comes from its North American education division.

But Pearson’s dominance does not always serve U.S. students or taxpayers well.

A POLITICO investigation has found that Pearson stands to make tens of millions in taxpayer dollars and cuts in student tuition from deals arranged without competitive bids in states from Florida to Texas. The review also found Pearson’s contracts set forth specific performance targets — but don’t penalize the company when it fails to meet those standards. And in the higher ed realm, the contracts give Pearson extensive access to personal student data, with few constraints on how it is used.

POLITICO examined hundreds of pages of contracts, business plans and email exchanges, as well as tax filings, lobbying reports and marketing materials, in the first comprehensive look at Pearson’s business practices in the United States.

The investigation found that public officials often commit to buying from Pearson because it’s familiar, even when there’s little proof its products and services are effective.