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Pearson Will Pay $1 Million Fine For ‘Understating’ 2018 Data Breach, Misleading Investors

pearson will pay 1 million fine for understating 2018 data breach misleading investors
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Education giant Pearson will pay a $1 million fine to settle charges that it misled investors about a 2018 data breach during which millions of student records were stolen. 

The U.S. Securities and Exchange Commission announced earlier this month that the London-based, multinational educational publishing and software provider “made misleading statements and omissions” to downplay the Chinese hack, which affected 13,000 school, district, and university customers.

Pearson misrepresented the incident, which had already happened, as a hypothetical risk in its July 2019 semi-annual report, the SEC found. Around the same time, the company also said in a media statement that the intrusion may have included dates of birth and email addresses, despite already knowing they were stolen.

The media statement left out millions of rows of student data, usernames, and passwords that were stolen. And Pearson claimed to have “strict protections” in place when in reality it failed to patch the vulnerability for six months, according to the SEC. 

“Pearson opted not to disclose this breach to investors until it was contacted by the media, and even then Pearson understated the nature and scope of the incident, and overstated the company’s data protections,” said Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, in a press release.

“As public companies face the growing threat of cyber intrusions, they must provide accurate information to investors about material cyber incidents.”

Pearson agreed to pay the civil penalty “without admitting or denying the SEC’s findings.”

In an emailed statement, the company said told EdWeek Market Brief it is “pleased to resolve this matter with the SEC.”

The only Pearson product targeted by the Chinese hackers starting in November 2018 — the AIMSweb 1.0 software platform — was retired in July 2019 as part of a previously scheduled plan, according to the company. The web-based software was a tool for entering and tracking students’ academic performance.

“Protecting our customers’ information is of critical importance to us,” said Laura Howe, senior vice president of global communications for Pearson, in an email statement. “Pearson continues to enhance its cyber security efforts to minimize the risk of cyberattacks in an ever-changing threat landscape.” 

The 2018 hack was part of a decade-long, global cyberattack that targeted the intellectual property and confidential business information of companies across a wide variety of industries, including COVID-19 research, according to the Department of Justice.

The federal government indicted two suspects last year, former engineering students in China who allegedly stole hundreds of millions of dollars of trade secrets, intellectual property, and other valuable information, sometimes on behalf of the Chinese government’s Ministry of State Security.

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State Budgets Poised to Bring More Money for K-12 in Coming Year

state budgets poised to bring more money for k 12 in coming year
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State budgets will not see the deep cuts that many feared at the height of the pandemic and are expected to funnel more money into school districts over the coming year, according to a new analysis.

New data from the National Association of State Budget Officers shows signs of improvement across state spending plans. While they generally haven’t rebounded to pre-pandemic projections, general fund spending is on track to increase by 3 percent this year, the data reveals. And governors in 39 states proposed increasing state spending in fiscal year 2022, which covers the coming academic year.

That’s good news for public schools, which rely heavily on state funding sources. NASBO figures project K-12 spending to increase nationally by $23.9 billion in fiscal 2022 — a counterbalance to the $7.4 billion cut in spending schools faced this year. 

And that doesn’t include the federal money directed to schools through the American Rescue Plan, the sweeping measure signed into law by President Biden in March, which channeled $122 million into K-12.

It’s a very different reality than the one school districts and governors were bracing for around this time last year, when revenues in 45 states fell and experts warned it could take years to dig out of coronavirus budget holes.

“Last spring, when the pandemic first hit and the economy was spiraling down, there was definitely a fear that the cuts would be a lot worse than we saw,” said Kathryn White, director of budget process studies for NASBO. “Generally, the outlook has been improving since those spring forecasts.”

Tax Bases Bounced Back

There are multiple reasons the more dire predictions didn’t come to pass, White said. For one, the federal stimulus money pumped into the economy ultimately boosted state coffers.

States also didn’t see severe drops in income taxes as many higher-income workers were less impacted by COVID-19 than expected, because many transitioned to working from home. And she said online shopping helped mitigate losses in sales tax revenue.

Overall, 38 states had their general fund collections for fiscal year 2021 come in higher than expected. That’s a completely flipped story from 2020, when 35 states had revenues fall short of their budget. 

States were also able to lean on their reserves. Prior to COVID-19, states’ rainy day funds were at an all-time high after a decade of rebuilding following the Great Recession, NASBO found. Balances were as high as 14 percent of states’ spending. After 2020, balances dropped 12.8 percent, and they’re expected to fall again in 2022. 

While the national picture is rosy, White said it’s important to note that some states were hit harder than others. 

For example, states with an especially strong tourism industry or a higher unemployment rate saw larger negative impacts on their budgets, according to the NASBO analysis. Those states were more likely to make budget cuts this year, and they’re planning more modest budgets for 2022.

That means the impact on K-12 spending will vary by state. And schools also will continue to cover additional costs caused by the pandemic, including extra safety precautions or increased support to address student academic stagnation during the pandemic. 

States will have to be careful with how they allocate one-time federal money and budget for the next few years to ensure long term stability, White said. 

“There’s just a lot of uncertainty about what the post-COVID economy will look like, how it will affect states,” White said. “And, of course, the Delta variant in the U.S. has tempered some activity in places, so that adds another layer of uncertainty.”

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K-12 Dealmaking: GoGuardian Receives Infusion of $200 Million; Lightspeed Ventures Funds Gaming Startup

k 12 dealmaking goguardian receives infusion of 200 million lightspeed ventures funds gaming startup
Dart with money shadow

Classroom management and ed-tech product provider GoGuardian recently raised $200 million from Tiger Global Management, putting GoGuardian’s value at over $1 billion, according to an announcement.

“We are excited to partner with GoGuardian, with its industry-leading product offering and best-in-class growth at scale, margins and retention characteristics, as the company cements its position as a true end-to-end SaaS platform for K-12 schools,” Tiger Global partner John Curtis said in a statement.

Based in Los Angeles, GoGuardian provides a product suite that seeks to allow districts to unify their filtering, classroom management, device management, and school mental health tools into a single point of contact.

Over the past year, GoGuardian says its customer base grew by 60 percent to include more than 10,000 schools, including 23 of the top 25 largest U.S. districts.

The Tiger Global investment is intended to support GoGuardian’s growing suite of products, as the company plans to use the money for product innovation, hiring, and business development, according to the announcement.

Class Technologies Scores $100 Million Investment from SoftBank. Washington, D.C.-based Class Technologies, which develops digital teaching and learning tools that integrate with Zoom, has received a $100 million investment from SoftBank to help the company’s global expansion efforts, co-founder Michael Chasen wrote in a July 28 blog post.

The company, which made headlines earlier this year with high-profile investments from famous NFL quarterback Tom Brady among other contributors, is “committed to delivering Class to some of the most disadvantaged and hard to reach populations in the world,” Chasen wrote.

Class has already expanded to several countries outside the U.S., and has been fielding inquiries from schools, universities and companies “all over the world” who want to add educational tools to Zoom, Chasen said.

Past investors include Salesforce Ventures, Sound Ventures, and veteran talent executive Guy Oseary.

Class has raised over $160 million since it launched in September, according to an announcement.

Children’s Gaming Startup Raises Pre-Seed Funding from Lightspeed and Y Combinator. Wilmington, Del.-based live game streaming platform Kalam Labs on Aug. 13 announced a pre-seed funding round from Lightspeed and Y Combinator.

Kalam Labs plans to use the money to develop fun and immersive virtual missions for kids ages 6-14 to learn STEM topics, according to an announcement.

“The 2020s kids have been born directly into the age of iPhones, Netflix and Google. It is impractical to make them sit in front of a blackboard or a Zoom Class expecting them to remember irrelevant information,” Kalam Labs co-founder Ahmad Faraaz said in a statement. “Education is undergoing a generational change and we plan to be at the forefront of building products that will accelerate this shift.”

Kalam Labs launched in June, has drawn thousands of paying students, and is growing its user base 50 percent weekly, the company claims.

The firm said its games’ live video and chat functions make them games suitable for the education sphere. A typical Kalam Labs session involves a live instructor taking a group of students through a virtual world while explaining STEM topics via game-based exercises and providing the “right nudges” along the way, the announcement says.

“Having seen hundreds of pitches in education over the years, we thought the approach Kalam Labs had for K-12 was one of the most interesting and fresh,” Lightspeed partner Hemand Mohapatra said in a statement. “We are excited to back the Kalam team as they take on this ambitious challenge.”

Higher-Ed Accessibility Platform Raises $650 Million. Singapore-based Emeritus recently received $650 million in Series E funding.

U.S. venture capital firm Accel and SoftBank Vision Fund 2 led the investment, which brings Emeritus’ valuation to $3.2 billion, four times higher than the company’s Series D valuation reached in August 2020, according to an announcement.

Emeritus collaborates with over 50 universities across the U.S., Europe, Latin America, Southeast Asia, India, and China, to make higher education accessible to consumers, companies, and governments. The company offers short courses, degree programs, professional certificates, and senior executive programs, and claims to have educated over 250,000 people across 80 countries.

The latest investment round follows Emeritus’ recent $200 million acquisition of global K-12 STEM education company iD Tech, which expanded Emeritus into the K-12 space.

“The unbundling of higher education and continued learning has only just started,” Accel partner Anand Daniel said in a statement. “We believe that the platform and deep partnerships with the world’s best universities puts Emeritus and its partner universities at the forefront of this revolution in higher education.”

Emeritus will channel the investment into working with university partners to develop new courses, create new products and industry education content, expand its offerings for governments and companies, and close more acquisitions, the announcement says.

The investment also saw participation from the Chan-Zuckerberg Initiative, Leeds Illuminate, Prosus, Sequoia Capital India, and Bertelsmann.

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Broad Congressional Proposal Would Raise Data Privacy Bar for Ed-Tech Companies

broad congressional proposal would raise data privacy bar for ed tech companies
image of lock and motherboard

Broad Congressional Proposal Would Raise Data Privacy Bar for Ed-Tech Companies

A recently released congressional proposal would trigger a swath of new requirements for how ed-tech companies handle K-12 student data they collect, and establish an independent auditing process for their data protection practices.

The drafter of the proposed measure, Rep. Lori Trahan, D-Mass., is seeking input from ed-tech companies and other members of the K-12 community on what language should ultimately be included in final legislation she plans to introduce later this year.

The proposal suggests limiting usage of student data collected by education businesses in several ways, including prohibiting targeted advertising involving students’ personal information, and banning the sale of student data except in cases of company acquisitions and sales of test-score reports for college recruitment.

Trahan presented the proposed language to allow commercial transactions for test score data as one of several points of discussion for parents, educators, students, and industry, as her office works to craft a final bill sometime around early winter, she told EdWeek Market Brief in an interview.

Sale of test score data can be a contentious issue.

Privacy advocates often argue that assessment companies don’t thoroughly inform students and parents when selling data to colleges and scholarship providers. On the flip side, some civil rights advocates  assert that colleges’ purchases of test score data are useful for enrolling students from low-income school districts who may get overlooked by traditional recruitment efforts, Trahan noted.

“I believe that we can strike a thoughtful balance, and making this a point of discussion as we work on an updated draft of the legislation is key to achieving that,” she said.

Commenters have until Oct. 31 to provide input for final legislation to be introduced later this year.

In addition to prohibiting certain uses of student data, the draft legislation also outlines several allowable cases of student data disclosure for companies, including to ensure legal and regulatory compliance, participation in the judicial process, and research purposes allowed by federal or state law.

Trahan wants companies to share their views on the issue of allowable disclosure, including their experiences navigating state laws that trigger disclosure of student information, she said.

Small and midsize companies should also comment on the draft’s provision to establish “technology impact assessments” that examine the student-data collection practices of ed-tech companies, Trahan said.

The draft would task the Federal Trade Commission with organizing a process for technology impact assessments to be conducted by independent auditors of any education company deemed to host “high-risk” platforms for student data protection purposes.

Defining “High-Risk”

The draft bill defines several criteria for what would constitute “high-risk.”

Those  criteria include software platforms that pose a significant risk to privacy or security of students; store personal student information regarding race, national origin, political opinions, religion, sexual orientation, and criminal convictions; and, platforms that present the possibility of an inaccurate, unfair, biased, or discriminatory decision that impacts a student.

The independent technology impact assessments would be required to describe the data that companies collect, provide a risk analysis considering harms to students, discrimination, and accessibility; and, explain companies’ risk mitigation processes.

The draft bill identifies the provision for independent auditors to conduct technology impact assessments as a point of discussion for K-12 stakeholders to have in the leadup to a final bill.

Ed tech, including artificial intelligence-influenced ed tech, is not subject to the same certification requirements as other critical industries, such as the legal and accounting professions, which require many practitioners to undergo continuing education and outside auditing processes, Trahan said.

“Ideally, legislation like ours could provide the incentive to scholars and standards-making bodies to create a certified [ed tech] industry,” she said. “But you don’t arrive there until you hear from small and midsized companies so that we can understand the burden that may come with them hiring potentially expensive, and currently uncertified auditors.”

Though the draft bill  has not been formally introduced in Congress yet, Trahan hopes to work across party lines, as well as with lawmakers interested in relevant tech topics like AI, as her office draws up final legislation. Twenty-seven House lawmakers compose the bipartisan Congressional AI Caucus.

The draft measure is “extremely comprehensive,” and the public participation process will allow the K-12 community to address any potential gaps they might see in the legislation, said Ariel Fox, senior counsel for global policy at Common Sense Media.

Fox lauded the proposal for  establishing a formal process for external audits of companies’ data protection practices. In recent years, such provisions have generally been left out of ed-tech legislation proposed within the U.S.

The impact assessment provisions draw from language embedded in the EU’s General Data Protection Regulation, or GDPR, and the UK’s Age Appropriate Design Code. Both of those regulations direct companies covered by the regulations to deeply vet how their software impacts users’ privacy.

“A concept that we see a lot in international laws is this notion that companies should really take a hard look at what they’re doing with data, what they’re collecting, why they’re collecting it,” Fox said. “It’s exciting to see that in her proposal as well.”

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4 Lessons for Teachers About Social-Emotional Wellness in Simone Biles’ Olympic Experience

4 lessons for teachers about social emotional wellness in simone biles olympic
Biles

Simone Biles’ decision to withdraw from a series of Olympics competitions last month care for her mental health was surprising and transformative. The move, especially by an Olympic athlete who is considered one of the greatest the world has ever seen, was more influential and inspiring than any athletic feat thus far.

The gymnast’s withdrawal from the competition emphasizes the importance of holistic self care and should inspire us to think about how we can practice taking care of our own selves and supporting those around us — our children, our colleagues, and our family members — to do the same. When we’re feeling unwell, it’s hard to be the best version of ourselves. The “twisties” can take many different forms and the connection between mental health, social emotional wellness, and performance is real. (Biles, after not participating in the vault, uneven bars and floor exercise, as well as the all-around event, later re-entered the competition and won a Bronze medal on the balance beam.)

By withdrawing, Simone Biles has shown courage and vulnerability. She has prioritized her own wellbeing over the fame and glory of being crowned Olympic champion. Coming off of Naomi Osaka’s decision to pull out of the French Open in May for similar reasons, there’s an opportunity to follow these athletes’ leads to prioritize their own wellbeing as inspiration for your students to do the same.

Here are four ways we can encourage students to follow Biles’ and Osaka’s leadership and cultivate the skills in themselves that will strengthen their own social-emotional wellness.

Explore Expectations

Invite students to write out an expectation that is weighing on them from their family, school, or society. Then have them come up with a gentler expectation they choose to place on themselves.

Ask students to reflect on whether the expectation that is weighing on them came from themselves or from someone else. By thinking about how we can replace this external expectation with a kinder one, we’re being gentler on ourselves and the pressure we hold.

Care Fully

Generate ideas for self and community care. Students explore ways they can care for themselves and their community and how that might feel by expressing this through movement.

Students can do a movement to represent a self-care step they would like to take (like taking deep breaths) and a frozen statue in their bodies for how that self-care step makes them feel. Then, invite students to make a movement for a community care step they can take (like picking up trash at a park or speaking out about unfairness) and a frozen statue in their bodies for how that might make folks in their community feel. Debrief with students and reflect on what they can do to take care of themselves and their community.

Follow the Follower

Understand the importance of both leading and following. Invite students to form a circle and have them try to move their hands at the same time and in the same way as everyone else. Without speaking, the group should choose one student to be the leader and follow that student. The group then lets the leadership pass to a second person and follows the second leader. Last, have everyone be a leader.

Debrief with students and reflect on what it felt like to lead and to follow. Discuss how they can take the lead in their school and support someone today who is taking the lead.

The Leader Shop

Recognize when to step up and when to step back. Invite students to practice 3 energizing movements that could help them prepare to take a bigger role in a group, like jumping jacks or a Shake Off. Then have them practice 3 calming movements that could help them prepare to let others lead, like pressing their thumb and pointer fingers together in a triangle and breathing, or standing quietly in mountain pose.

Students then reflect on when they might need to step up versus step back while working or collaborating in a group. Discuss how we can make a space where everyone can be authentic and real, and in order to do this, we need to know when to step up and take a bigger role, and when to step back and let others take the lead.

Leveraging the celebrity appeal of the Olympics and Simone Biles and understanding her strong, inspiring decision can be an authentic way to explore and apply social-emotional wellness in the classroom. When we can process and reflect on our feelings and connect them to current events, we give students an opportunity to see social emotional skills in real life application.

Photo: Simone Biles prepares to start her performance on the balance beam during the artistic gymnastics women’s apparatus final at the 2020 Summer Olympics on Aug. 3. (AP Photo/Gregory Bull)


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New Institute Backed by National Science Foundation to Explore AI’s Role in Education

new institute backed by national science foundation to explore ais role in education
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A ed-tech nonprofit will join four universities in launching a new institute dedicated to creating artificial intelligence tools that can be applied to human learning and education.

The effort is meant to encourage the development of products for use in K-12, influence future AI products made for K-12, and is intended to improve upon past AI technologies that were difficult for teachers to use, said Jeremy Roschelle, executive director of learning sciences research for Digital Promise, the education nonprofit involved in the initiative.

“There’s an emphasis here on what people are calling classroom orchestration – how to help teachers organize for longer-term, more complex, collaborative, problem-solving things,” Roschelle said. “I think the classroom orchestration part, in particular, could be part of a big change in what products people emphasize in the market, and how they support teachers.”

A 5-year, $20 million grant from the National Science Foundation will support the AI Institute for Engaged Learning, Digital Promise said. Analysts, policymakers, and product developers from Digital Promise will join researchers from North Carolina State University, University of North Carolina, Indiana University, and Vanderbilt University, for the initiative.

The work of the institute will have three main goals:

  1. Created platforms will incorporate story-based problem scenarios fostering communication, teamwork, and creativity.
  2. Platforms will generate AI characters capable of communicating with students through speech, facial expression, gesture, gaze, and posture.
  3. The institute will build a framework that will customize educational scenarios and processes to help students learn, based on information collected from conversations, gaze, facial expressions, gestures, and postures of students as they interact with one another, teachers, and the technology itself.

Schools, museums, and outside nonprofits will work with the institute to ensure created tools are ethically designed and advance diversity, equity and inclusion, according to the announcement.

District officials, and advocates for the ethical use of technology, have raised repeated concerns about potential pitfalls in applying AI-powered technology in schools. One fear is that because AI systems are dependent on collecting large amounts of data and using algorithms to guide policy and classroom practice, they will end up reinforcing racial, gender or other stereotypes.

For example, could an AI-powered curriculum platform, or one that recommends academic interventions for students, end up directing more students of color into remedial coursework, because of biased algorithmic assumptions?  (See Education Week’s recent special report breaking down concerns about AI’s role in classrooms.)

Data Privacy in Focus

A November report by the Center for Integrative Research in Computing and Learning Sciences cites several concerns and considerations come into play when it comes to how AI technologies safeguard student privacy.

How will AI-recorded student conversations and emotional data be used? How long will information be saved? Will it be part of a student’s record? These are all questions that come into play when AI and children interact, the report notes.

AI detection of emotions, through facial expressions, is well-developed, though challenging from a privacy and ethical standpoint, and appropriate policies must still be determined to address these challenges, the report says.

“A very strong focus of this institute … is coming together to really think about how do we tackle some of these issues of privacy, security?” Roschelle said. “None of this is going to fly if people are terrified.”

If AI can be applied creatively and responsibly, it has the power to enrich lessons across subjects, Roschelle said.

He offered an example detailing how forthcoming AI tools might generate story-based situations that promote collaboration and creativity.

Imagine a science class planning a trip to Mars over a three-week period, he said. For the purposes of that trip, they would need to measure gravity, the strength of the Sun’s energy, and air moisture. They would have to plot out measurement devices that they need, the composition of student teams to observe measurements, and what vehicles to bring.

In this case, an effective AI system could “help them along the way whenever they get stuck,” Roschelle said, and “tune the story to the choices they make.”

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New California Law Pours Money Into Open Educational Resources

new california law pours money into open educational resources
Gavin Newsom, open educational resources

California Gov. Gavin Newsom has signed into law a budget measure that provides millions of dollars to support the creation of openly licensed academic resources at the college level, in one of the most striking examples of a state throwing its weight behind the free, revisable materials.

The Democratic governor last week approved a higher education budget proposal that devotes $115 million toward reducing textbook costs and the development of open educational resources.

While the measure is aimed at the state’s postsecondary system, backers of open educational materials have told EdWeek Market Brief that it could benefit pre-college students in part by making those materials more freely accessible to high school students who are pursuing advanced content.

Open educational resources are typically defined as learning materials that are either in the public domain, or created on licenses that allow them to be freely shared and modified by users, including teachers and students.

They’ve become popular in some school districts, which have seen them as alternatives to commercial texts and a way to give educators more freedom to create resources tailored to their specific needs.

The California budget measure is the single largest investment by any U.S. state in open educational resources, said Cable Green, the director of open education at Creative Commons, a nonprofit that supports OER and creates licenses for their development.

The state’s action will allow California public colleges to continue to build degree and certificate pathways for students with no textbook costs, he predicted. And it will produce savings for students in not having to buy texts that are worth many times the state’s $115 million investment, he added.

“The impact of this open education investment will be massive,” Green said an email. He also said California’s new policy could inspire replication. “Any state can easily follow California’s lead and make similar investments.”

Photo: Gov. Gavin Newsom speaks at a news conference in Oakland, Calif., on July 26. (AP Photo/Jeff Chiu)


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Spending on Tech-Based Curriculum Jumps During the Pandemic, New Survey of IT Leaders Finds

spending on tech based curriculum jumps during the pandemic new survey of it leaders finds
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K-12 curriculum software and subscription spending grew at a higher rate than any other technology budget area for school districts last school year, as their IT budgets mostly increased from the previous school year.

In a survey of 170 district technology leaders by the Consortium for School Networking, 62 percent of participants reported their schools’ funding for curricular software/subscriptions rose between the 2019-2020 and 2020-2021 school years, with 56 percent also noting a spike in cybersecurity investment.

Another 56 percent of respondents said their district’s overall IT budget expanded, with 12 percent citing a “major” increase, according to a summary of the report.CoSNGraph

District technology leaders ranked cybersecurity as the top unmet technology need, followed by home access connectivity and interoperability.

“In a situation where even well-funded corporations in the private sector struggle to address cybersecurity issues, poorly funded districts are at a disadvantage,” CoSN said. “One respondent called the need for more cybersecurity funding as ‘desperate.’”

Cybersecurity has been a focus area for CoSN, which is one of several organizations that endorsed the Enhancing K-12 Cybersecurity Act. That bill would set a path for the federal government to guide best practices for K-12 cybersecurity and provide cybersecurity grants to schools that could benefit certain education companies.

Congressional lawmakers have not acted to advance the bill.

Big Investments in Hybrid Learning

In addition to greater curricular software and cybersecurity spending, the majority of those surveyed also noted new technology initiatives, with 64 percent saying that they added classroom technology to support simultaneous hybrid learning, such as rotating cameras, microphones and speakers; and 60 percent reporting that they now offer a remote-only instruction option.

Further, 37 percent of tech chiefs said they added “district-wide student-facing Cloud-based applications,” such as learning management systems, to their digital ecosystems, and 23 percent of districts gave devices or extra monitors to educators for home use.

Only 2 percent of participants reported not supporting new IT initiatives or existing IT efforts that weren’t already supported pre-pandemic.

Almost all district leaders are looking to the federal government for technology funding help.

About three-quarters of those questioned plan to request support from the Federal Communications Commission’s Emergency Connectivity Fund for Wi-Fi hot spots, while 90 percent of respondents said infusions provided through three stimulus bills enacted over the last 17 months significantly helped remote-learning or related IT initiatives in their districts during the pandemic. (See EdWeek Market Brief’s recent, nationwide survey showing how district officials plan to spend the new, $7 billion connectivity fund overseen by the FCC.)

The three COVID stimulus packages heaped an overall $189.5 billion financial windfall on U.S. K-12 schools. Districts have until Sept. 30, 2024, to commit the last bit of that money.

Compared with the CoSN review, a recent EdWeek Market Brief survey found a slightly lower percentage – 62 percent – of 280 district administrators interviewed, planned to seek ECF reimbursement for Wi-Fi hot spots for home use. However, the CoSN survey did not specify that the hot spots sought for reimbursement pertained only to home use.

“There is a marked shift in how school district IT leaders are preparing for this fall, compared to the back-to-school survey results from last year,” CoSN CEO Keith Krueger said in a statement. “While the federal government delivered critical funding when school districts needed it most, we must now invest in cybersecurity and ensure sustainable, secure and equitable home broadband access for students and educators into the future.”

Image by Getty

Graph provided with permission from the Consortium for School Networking


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PowerSchool, Major Ed-Tech Provider, Valued at $3.5 Billion Following Initial Public Offering

powerschool major ed tech provider valued at 3 5 billion following initial public offering
PowerSchool goes public

PowerSchool, a major provider of student information systems and an array of other K-12 tools, raised $711 million in its initial public offering this week, marking what the company says is the largest IPO in the K-12 software space in North America.

The company debuted on the New York Stock Exchange under the ticker symbol “PWSC,” capping a week where several other major ed-tech companies also hit the public markets

That includes language learning app Duolingo, which also made its market debut Wednesday on the Nasdaq and is now trading under the ticker symbol “DUOL.” Duolingo raised $521 million in its IPO, giving the company a $3.7 billion valuation. 

For it’s part, PowerSchool sold 39.5 million shares for $18 each, the low end of its price range expectations. The company had previously said it expected a pricing in the range of $18 to $20 a share. The IPO gives PowerSchool a valuation of roughly $3.5 billion. 

“This IPO is a key part of our strategy to continue building our platform,” Chief Executive Officer Hardeep Gulati said in an interview. 

PowerSchool says its products, which include student information systems and products focused on assessment and analytics, special education, talent management, and human resources, serve about 45 million students in 90 countries. 

Relatively few companies in the education sector have been traded on public markets, but that appears to be changing.

The growth of publicly traded education companies has been pushed along partly by the rise of special purpose acquisition companies, or SPACs, shell entities that are formed to acquire companies raise money for initial public offerings. Gulati said PowerSchool was approached by multiple SPACs about going public, but the company decided on an IPO because “the PowerSchool brand is one our strengths, and we always wanted to do this as our business.” 

Publicly traded companies in education, such as online education provider Stride, Inc., formerly K12 Inc., and Pearson, have drawn criticism in the past from advocates who have questioned whether the pressure they face to satisfy shareholders is inherently in conflict with the need to deliver resources to schools. Whether the new class of public companies is the target of similar ire remains to be seen.

Founded in 1997, PowerSchool has seen its ownership change hands numerous times in just a few decades. It was sold to Apple in 2001. The company was then sold again in 2006 — this time to the global education corporation Pearson. And in 2015, Pearson sold PowerSchool to Vista Equity Partners for $350 million cash. Another private equity firm, Onex Corp., purchased a stake in PowerSchool from Vista Equity in 2018. 

Collectively, the two private equity firms will control about 78 percent of shareholder voting power following the IPO, according to a regulatory filing. 

In its IPO prospectus, PowerSchool disclosed revenue of $118 million and a profit of $483,000 for three months ended March 31. In 2020, PowerSchool lost $46.7 million while generating $434.9 million in revenue, and the year before that recorded a loss of $90.7 million with $365 million in sales. 

More Mergers and Expansion on Horizon

The company, in its IPO filings, warned investors of “a history of cumulative losses” and that “we do not expect to be profitable for the foreseeable future.” 

PowerSchool intends to use money from the IPO to pay off a bridge loan related to its March acquisition of Hobsons, a provider of college and career readiness solutions.

Since 2015, the company has made 12 acquisitions to expand its portfolio — and Gulati says going public will provide the needed financial boost for continued investments in the form of acquisitions and research and development to keep growing. 

“This IPO is giving us the currency and the growth path to continue,” he said. 

According to its IPO prospectus, PowerSchool is also planning to expand its customer base in North America with “significant and targeted” investments in direct sales and marketing. And the company is also hoping to broaden its reach overseas, listing international expansion as one of its key objectives moving forward by making “product, personal, partnership and acquisition-related investments to expand geographically.”

PowerSchool’s listing on the public markets comes as school districts have made large investments in an array of distance learning tools, including cloud-based software solutions, over the last 18 months of the pandemic. 

The company says it has seen spikes in customer acquisitions and renewals, and in the number of its users and engagement since the beginning of the COVID-19 outbreak. However, Gulati said while the pandemic has changed how educators think about ed tech, the tailwinds for growth and plans for an IPO predate the pandemic. 

“The IPO,” he said, “was a natural progression for business scale.”

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10 Variables That Matter Most in Making New Ed-Tech Successful

10 variables that matter most in making new ed tech successful
UVA 2

The success or failure of implementing ed tech in a school district is determined by factors including the culture of the staff and decision-making power given to teachers, a new report contends.

Researchers for the EdTech Genome Project identified 10 variables they believe matter most to schools’ successful selection and implementation of new technology — a framework they say ed-tech companies can also use to gain insight into their K-12 customers.

The research, led by the University of Virginia and nonprofit EdTech Evidence Exchange, aims to give educators and ed-tech providers a common language and context for talking about what tools do or do not work, a standard that can help inform future purchasing decisions, according to the report.

The goal is to help districts make better choices for their students about the sea of ed-tech options, and help companies better support district partners, said lead researcher Emily Barton. Ultimately, the project aims to decrease the number of ed-tech products being used ineffectively or not at all, she said.

Researchers found about 60 percent of pre-pandemic purchases — worth at least $26 billion annually — failed to meet usage goals set by schools.

“We simply do not have enough information to support educators’ decision making around ed-tech,” said Barton, an assistant research professor at UVA. “A key piece of that is understanding … that the ‘right’ technology to bring into one environment might be very different than the right technology to bring into another environment.”

The Genome project was born from the EdTech Evidence Exchanges’ expressed mission to help educators make better-informed decisions about the technology they use. A steering committee of teachers, administrators, researchers and association leaders identified the 10 most significant variables based on existing research and lived experience. A working group assembled for each variable spent six months refining their definitions.

The key variables that determine whether ed tech is implemented successfully, according to the report, are how well it aligns with the following in a district:

  • Vision for teaching and learning
  • Selection processes
  • Teacher agency
  • Infrastructure and operations
  • Implementation systems and processes
  • Staff culture
  • Teacher beliefs and knowledge
  • Strategic leadership support
  • Professional learning
  • Competing priorities

The report doesn’t offer a “right” or “wrong” vision, culture, or selection process. Rather it defines the dimensions of each variable and what questions districts and companies should ask themselves when implementing ed tech products.

For example, the report argues that weighing teachers’ beliefs about ed tech includes considering their feelings, knowledge, and experience toward technology; and their understanding of how students learn.

Barton said teachers’ beliefs can be “make or break.” If a company representative is walking into a room of educators who are generally skeptical about technology and haven’t had great experiences with digital tools in the past, they may want to spend extra time during training explaining how their product can benefit students to lay a better foundation.

“Understanding the beliefs of the educators they’re working with could really shift and color the way that they present that professional development opportunity,” she said.

As a next step, the Genome project researchers are testing a database, known as the EdTech Evidence Exchange Platform, which would allow educators to look up whether an ed-tech tool or program is successful at a district similar to their own based on the 10 variables. The data for each district would be captured by surveying multiple teachers.

A release date has not been set yet, Barton said.

This comes after the pandemic forced a surge in demand for ed-tech products while schools turned to remote learning and as districts prepare to spend federal stimulus aid money aimed at improving connectivity outside of school.

“We are trying to create this really incredible evidence source for educators who are out there making decisions,” Barton said. “At this point we really recommend educators take a look at these variables and start having conversations with colleagues [and] engage with potential vendors: Where might they have strengths and weaknesses?”

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