Voucher Vendor's Contract Increased, Will Now Receive $130 Million a Year from TN Taxpayers
School privatization is big business
Privatizing Tennessee’s public schools is a win for the private companies facilitating access to private school discount coupons.
Tennessee Lookout reports that the state’s school voucher vendor will now receive nearly $130 million a year to help parents access and navigate the state’s voucher system.
Tennessee lawmakers are giving a $356 million raise to the company handling the state’s two private-school voucher programs, despite the vendor’s woes in two other states.
The legislature’s Fiscal Review Committee approved the increase Wednesday, pushing the maximum contract amount for Student First Technologies, LLC to nearly $637 million over the life of its five-year contract to run an online portal where parents can apply for the funds and receive payments.
Student First Technologies has run into problems in other states:
Student First Technologies won Tennessee’s business even though the state of Arkansas terminated its contract with the vendor and obtained $300,000 in damages for failure to deliver online services.
The vendor also struggled to run a similar program in West Virginia after receiving a $10 million contract, failing to process nearly 3,000 of 9,000 student applications.
The track record of problems didn’t hinder Tennessee leaders from granting more than $600 million to the voucher vendor over a 5-year contract.
And, to be clear, the money paid to Student First is in addition to the actual cost of the voucher program - estimated to be around $300 million in the upcoming school year.
The total cost of school vouchers, then, is approaching $1 billion - effectively creating a separate, very expensive school system in the state.
Meanwhile, Tennessee now has the lowest investment in public schools in the nation - nearly $2 billion a year below Mississippi.
Oh, and voucher backers are spending big to influence the 2026 Governor’s race.
After spending more than $4 million to help elect pro-voucher candidates to the legislature in 2024, Jeff Yass is ponying up $1 million to help make Marsha Blackburn the state’s next Governor.