Saturday, May 20, 2000 in New York Times
By Edward Wyatt
In a drive to fill all of the 7,500 empty seats in parochial and private schools in New York City, a philanthropic organization co-founded by Theodore J. Forstmann, the billionaire financier, has offered $50 million in new, partial scholarships to underprivileged children for this fall.
The program will be managed by the Children’s Scholarship Fund, which Mr. Forstmann co-founded with John T. Walton, the son of Wal-Mart founder Sam Walton. The two men started the fund, which sends children from poor families to private schools, by each donating $50 million and then raising an additional $80 million from outside donors.
Letters awarding the 7,500 new scholarships were mailed this week.
The new scholarships, which will be paid for mostly by Mr. Forstmann, are part of his campaign against what he calls the “government monopoly” in elementary and secondary education. He wants to establish a system that would allow parents to send their children to any school with taxpayer-provided money, a move that he says would engender competition and draw scores of companies to start new schools.
“By the time this is over, I am going to give parents of this country a voice,” Mr. Forstmann said in an interview yesterday. “And we will find out whether they want to be in charge of the education of their children or not.”
Mr. Forstmann is one of a growing number of wealthy Americans who have turned their attention to elementary and secondary education. Among such philanthropists are Eli Broad, the chairman of Sun America, the insurance and financial services company; Leonard Riggio, the chairman of Barnes & Noble; William H. Gates 3rd, the co-founder of Microsoft; and George Lucas, the film maker.
Unlike most of those donors, Mr. Forstmann, who made his fortune on leveraged buyouts of companies like Gulfstream Aerospace and Dr Pepper, is intent on doing away with public education as it is structured today.
Describing himself as “a necessary voice for a new model for education,” Mr. Forstmann foresees what some experts — but not he — would call a voucher program, that would allow parents to put the taxpayer-financed dollars that currently go to public schools toward sending their children to any school, religious or secular, private, for-profit or otherwise. Mr. Forstmann said he disavows the word voucher, however, because of the political implications it carries.
The Children’s Scholarship Fund’s initial $180 million is being used to help finance four years of private school for 40,000 children from low-income families around the country. Participating families are required to contribute about $1,000 annually toward the tuition. This year, the fund paid about $47 million, or up to $1,700 per child, including $2.5 million that went to 1,955 students in New York City.
The additional New York City scholarships were awarded on the same basis as the original ones: by lottery from among the 166,000 applicants who did not previously receive money.
The foundation received about 1.25 million applications from around the country.
About 92 percent of the New York City children who receive aid from the Children’s Scholarship Fund attend church-affiliated or religious schools, about two-thirds of them Catholic. Mr. Forstmann said a survey of the city’s parochial and private schools by the scholarship fund found about 7,500 available positions, mostly in church-related schools.
Mr. Forstmann said his program is not intended to promote religious education, but that those are the only alternatives now to public school.
“The demand is there, but the supply is not,” Mr. Forstmann said. “Guess why? Because the one thing the government monopoly is very good at is keeping supply out.”
By requiring taxpayers to pay for public schools and, if they want an alternative for their children, to pay that tuition as well, the government makes it economically not feasible for companies to open schools, he said.
The expanded scholarship program, Mr. Forstmann said, like the original, will help to awaken parents to the need for competition in the educational system. That, Mr. Forstmann believes, is the only way to increase the supply of education providers and encourage companies like General Electric, Microsoft or National Geographic to start schools to compete for the $370 billion spent annually in the United States on private and public elementary and secondary education.
Mr. Forstmann said yesterday that he intended to spend a considerable amount of time and money on the effort. While he briefly considered seeking the Republican nomination for United States Senate as an alternate to Mayor Rudolph W. Giuliani, Mr. Forstmann announced that he would not run early this week, before the mayor left the race. Instead, he said, he will campaign between now and November to encourage parents to demand change in the country’s educational system.
The purpose of Mr. Forstmann’s campaign is “to wake people up,” he said.
“Who should be in charge of the education of a child — the parent or the government?,” Mr. Forstmann said. “Certainly most of the parents in America would say, ‘Of course, it should be me.’ But if they can’t pick the school, they can’t pick the subjects, and they can’t pick who teaches the subjects, then you please tell me what they are in charge of.”
While the scholarships are intended to help children from low-income families, he said: “We’re also trying to get people to pay attention to what’s really going on. If the current system was any good, we would be out of business in the Children’s Scholarship Fund.”