Education Arbitrage

Monday, October 2nd, 2006

Jonathan of Chicago Boyz noted that this is “education arbitrage”:

Private tutors are a luxury many American families cannot afford, costing anywhere between $25 to $100 an hour. But California mother Denise Robison found one online for $2.50 an hour — in India.

“It’s made the biggest difference. My daughter is literally at the top of every single one of her classes and she has never done that before,” said Robison, a single mother from Modesto.

Her 13-year-old daughter, Taylor, is one of 1,100 Americans enrolled in Bangalore-based TutorVista, which launched U.S. services last November with a staff of 150 “e-tutors” mostly in India with a fee of $100 a month for unlimited hours.

Taylor took two-hour sessions each day for five days a week in math and English — a cost that tallies to $2.50 an hour, a fraction of the $40 an hour charged by U.S.-based online tutors such as market leader Tutor.com that draw on North American teachers, or the usual $100 an hour for face-to-face sessions.

“I like to tell people I did private tutoring every day for the cost of a fast-food meal or a Starbucks’ coffee,” Robison said. “We did our own form of summer school all summer.”

His comment:

The real story is that it potentially undercuts the entire govt-schools system. If you have kids going from failure to excellent performance based on a couple of hours’ tutoring per day, how much better would they perform if they spent four or six hours every day with their online tutors and blew off their schools entirely? That’s what parents will be thinking. The teachers’ unions are going to try to make this kind of tutoring illegal or so larded up with mandated bulls*** that it won’t be effective. I don’t think the unions can succeed, however.

Yippee. Education arbitrage.

Leave a Reply