The landscape of US college entrance exams has seen significant changes in recent years due to universities trying to find the best way to evaluate prospective students. Nonprofit organizations that create these tests have faced financial losses amid this turmoil, prompting private equity firms to step in and take majority stakes in exchange for financial help. This move has raised concerns among education advocates about transparency in the testing process, especially given the potential for private equity-owned companies to obfuscate information and control the entire testing and curriculum development process.
ACT Inc., the organization behind the ACT college entrance exam, recently partnered with California-based private equity firm Nexus Capital Management to move its testing services into a for-profit company. While ACT Inc. maintains that this partnership will allow for expanded services beyond testing, critics worry about potential conflicts of interest and decreased transparency. Private equity buyouts of nonprofit organizations like the ACT also raise questions about fairness in the evaluation process and the potential impact on students, particularly those from lower-income families.
The shift towards private equity ownership in the education sector is not unique to the ACT, as other organizations like the College Board have also experienced revenue declines and changes in ownership structures. Private equity investment in education services has been on the rise, indicating a growing trend of financial support in industries facing funding challenges. Concerns remain about the impact of private equity ownership on public goods like college admissions testing and the need for increased regulation and oversight to protect students and ensure fairness in the evaluation process.
Federal Reserve Chair Jerome Powell recently discussed the central bank’s stance on inflation and interest rates at a policy forum focused on US-Canada economic relations. Powell indicated that a lack of further progress on inflation suggests that the Fed is unlikely to cut interest rates at its upcoming policy meeting. While inflation has eased from previous highs, persistent price pressures in services and housing continue to impact the economy. The Fed’s current policy stance reflects the need to allow time for existing measures to address inflation and guide future decisions based on evolving economic data.
United Airlines reported a $200 million loss in the first quarter due to issues related to Boeing’s 737 Max 9 model. The grounding of the aircraft following a door plug incident on an Alaska Airlines flight led to significant costs for United, impacting its profitability. The incident raised concerns about the safety and quality of Boeing planes, as United relies heavily on these aircraft for its operations. The financial impact of the grounding highlights the ripple effects that quality issues in the aviation industry can have on airlines and the broader economy.
