随着刺激资金的结束，评估教育投资

1 © Oliver WymanOn the other hand, some K-12 segments will likelybe insulated from budget cuts and could potentiallybenefit from policy changes going forward.For example, regulatory requirements largelyprotect spending for certain student populations,and companies serving these segments shouldexperience fewer headwinds. And sectors fundedthrough other avenues, such as bonds, shouldnot expect a funding pullback as issuances haveincreased. Finally, private schools were less relianton ESSER funding and will not experience thesame budget tightening. In addition, the currentadministration’s potential support of school choiceand vouchers might give them a boost.KEY CONSIDERATIONS WHENEVALUATING K-12 INVESTMENTSAs districts begin to assess what programs andservices need to be trimmed or eliminated, and howESSER funding rippled through their overall budgets,investors can begin evaluating assets by asking aseries of questions to uncover categories of essentialspending that will continue to receivepriority.IS IT REQUIRED BY LEGISLATION?Federal regulatory requirements associated with theIndividuals with Disabilities in Education Act (IDEA)will protect funding for special education studentsand insulate companies that serve these studentsfrom budget cuts. Companies that provide staffing— both teachers and clinicians — for special educationstudents are well situated because IDEA requiresthat services specified in a student’s IndividualizedEducation Plan be delivered. Companies that providecurriculum or other resources and services, such astransportation, for special education students arelikely protected aswell. 2Other categories protected by legislation arecompanies offering solutions that allow schools tocomply with security and safety regulations, suchas providing background checks or emergencyresponse solutions, as well as those related to digitalprivacy. A caveat: Changes in federal regulationsmight shift the landscape, weakening or eliminatingsome guidelines or creating a market for newservices or initiatives.Finally, individual states have regulations forcurriculum materials — such as the Science ofReading for literacy instruction or the High-QualityInstructional Materials and Professional Developmentlegislation that supports literacy and mathinstruction — that also create safer havensfor companies that meet those standards.IS IT AN ESSENTIAL INFRASTRUCTUREOR SERVICE?Of course, some categories are integral to theoperation of a school itself and will remain untouched.Districts will continue to rely on student informationsystems, learning management systems, andregulatory compliance software. But these categoriesare already highly penetrated, so growth will behard to come by.Another need-to-have segment is IT services,especially as many K-12 districts lack internaltechnology staff and have been unable to keepup with the explosive growth of digital solutionsembedded in the school day.Schools are still recovering from the “mass resignation”during the pandemic and are increasingly relyingon staffing agencies and service providers to helpthem fill open positions. Staffing companies are wellsituated because structural teacher shortages arepersistent and the positions they fill are in districts’operating budgets. IS THE PRODUCT/SERVICE BEST OF BREED?Regardless of a product’s category, quality willbe paramount as budgets contract. Districtswill eliminate or reduce spending on duplicativeservices or programs, and quality will be the criticaldifferentiator between those that are cut and thosethat are funded. In our experience, companies thatfocus on a customer success model that encouragesuse tend to be in the best position.CONCLUSIONAfter several years of stimulus funds that transformedschool district budgets — and the prospects ofcompanies serving K-12 — the landscape is shifting.Districts must now adjust to the loss of a significantportion of their budgets, and investors need toconsider the end of the ESSER era as they evaluateK-12 educationassets. © Oliver WymanCompanies that provide core curriculum materialsare generally more immune from budget cuts thansupplemental material providers. Additionally, thepandemic disrupted the core curriculum buying cyclefor many districts, so we anticipate a bit of catch-upspending is required, providing additional support forthe segment.DOES IT DRIVE ADDITIONAL REVENUE?As budgets get squeezed and districts must replacelost funding or eliminate resources, programsor services that create incremental revenue fora district will have an advantage. We anticipatecontinued growth for companies that provide before-and after-school program services when districtscharge parents for them; payments platforms thathelp districts capture and manage the increasingarray of student fees they are charging; Medicaidreimbursement platforms that help ensure districtscollect all the support their students are eligiblefor; and drop-out prevention and recovery serviceproviders that help districts maintain re