The Tennessee Department of Education (TDOE) awarding Students First Technologies (SFT) a contract to manage the state’s Education Savings Account (ESA) program continues to raise concerns.
“Our government owes citizens the responsibility of providing the best service at an affordable price. Often they outsource services that could be done better or more efficiently in-house. ” JC Bowman, executive director of Professional Educators of Tennessee told The Tennessee Star, “When that work is outsourced it needs to be with people who have the adequate experience and skills to deliver quality service. We need to know who does the work, and they must be held accountable.”
A larger, more experienced company initially won the competitive bid to manage the state’s education savings program. ClassWallet, despite its checkered history in Tennessee, was the decisive favorite. The company currently operates ESA programs in five states: Arizona, Indiana, Missouri, New Hampshire, and North Carolina. However, when contract negotiations between the Florida-based company and the TDOE broke down, the department turned to a smaller, less experienced company.
According to a report in ChalkbeatTN, “On a 100-point scale, ClassWallet scored more than 20 points higher than Student First. Also submitting proposals were Merit International, Odyssey, and LiftForward Inc.”
Under the 5-year, $3.675 million contract, Student’s First Technologies would receive $36,750 in 2023, $858,249 in 2024, and $695,000 each subsequent year.
Tennessee is SFT’s first foray into a state-run scholarship program. SFT operates in 15 states, primarily assisting private non-profits in administering tax-credit scholarships and micro-grants. Over the last five years, it has helped secure over $300 million annually for families and their education needs.
Documents submitted with its bid show that between December 1, 2022, and February 28, 2023, the company had a total income of just over $230,000, with a net of $69,000. The company lists three full-time employees and nine others listed as freelancers, in addition to the two founders.
One person, familiar with the bidding process but who wished to remain anonymous, told The Tennessee Star, “They have no money, no staff, and no experience working with state departments of education. I’m not sure how they are going to pull this off.”
The phone number on the website connects directly to SFT’s co-founder Mark Duran. Duran remains unfazed by questions of capability. This week, he told The Star, “Everything is going well and we are right on time with delivery.”
Duran deferred to the TDOE when pressed for a timeline, saying, “They are in charge of that.”
He added, “Questions about implementation should be directed to the Department of Education. We are just providing the technology and the training on that technology.”
Duran’s statement appears to contradict a provision in the contract with the TDOE, which calls for SFT to establish a customer service call center:
- A.19. Customer Service: The Contractor shall provide high-quality customer service for all Stakeholders. Customer service shall include:
- Customer service centers and representatives shall be located in the United States.
- Ability to reach a customer service representative who is English-Spanish bilingual from 8a.m. – 5 p.m. (Central Time), Monday – Friday, via email, chat, and phone.
- Measurable parent support service level agreement (“SLA”) to be: 90% of inbound callsanswered within a target of sixty (60) seconds or less. The Contractor’s live chat response shall be real-time during business hours, and the Contractor’s email response shall be within 24 hours.
When pressed about the provision, Duran maintained that the company was only providing technology and training in that technology. All staffing and operations responsibilities fall to the state department of education.
The Star has repeatedly contacted the TDOE for further clarification of contracted services and a copy of the project management timeline but has not received a response.
Tennessee’s ESA program allows eligible students zoned to attend Memphis-Shelby County Schools, Metro Nashville Public Schools, Hamilton County Schools, or a school that was in the Achievement School District (ASD) on May 24, 2019, to use state and local money toward education expenses. Families may apply funds towards tuition and/or fees at an approved private school.
Currently, applications can only be submitted through mail or handed to a department representative at an in-person ESA event. The fall 2023 ESA application deadline was August 1, 2023. Applications received and/or postmarked between August 2, 2023, and January 5, 2024, will be reviewed for January 2024 enrollment at one-half the total ESA awarded amount. Those students must enroll by January 15th.
Tennessee Education Commissioner Lizzette Reynold told The Tennessean in a recent interview, “The department has received 2,961 applications for the program, of which 2,145 are approved.”
Hamilton County students are now eligible to participate in the ESA program.
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TC Weber is a reporter at The Tennessee Star and The Star News Network. He also writes the blog Dad Gone Wild. Follow TC on Twitter. Email tips to [email protected]. He’s the proud parent of two public school children and the spouse of a public school teacher.
