In This Business-Friendly State, Why Is It So Hard To Start A Private School?

Entrepreneurship is challenging in any sector, but education entrepreneurs often confront regulatory roadblocks and bureaucratic barriers that make launching a new school or innovative learning model particularly difficult.

Some of these roadblocks and barriers include occupational licensing requirements for new school founders, such as those in Nevada that prevent any non-state-licensed teacher or administrator from opening a secular private school. They can also include state accreditation requirements, like those in Iowa, that can prevent some schools, especially learner-centered ones, from operating.

These regulations can constrain the supply of new and creative schools, artificially limiting the education options available to families. This is particularly problematic now, as more states introduce or expand school choice programs that enable families dissatisfied with their assigned district school to exit and find an alternative. If existing or new regulations prevent those alternatives from sprouting, then the sustained success of school choice could be stymied.

Along with Nevada and Iowa, Tennessee is another state where it can be difficult to start a private school due to various accreditation and approval requirements. These regulations recently got even tighter.

Last year, the Tennessee Department of Education revised its rules for non-public school approval. Among the revisions were delineated seat time requirements of 6.5 hours a day, 180 days a year that can prevent flexible and creative scheduling. Additional annual assessment and state reporting protocols were added, and schools with fewer than 10 students were prohibited from getting started. These rules go into effect this academic year and can impact emerging schools like The Lab School of Memphis.

Launched in August 2021 by former public school teacher, Coi Morrison, The Lab School of Memphis is a small, regionally-accredited, secular K-6 private school that emphasizes project-based, learner-driven education in a nurturing environment with no grades or state testing. It was honored as a 2022 national semi-finalist for the prestigious Yass Prize for education innovation, as well as a VELA Education Fund “Next Step” grant recipient.

“I see these regulations as particularly threatening to new and would-be education entrepreneurs,” said Morrison, who also has an MBA. “Increased regulations for nonpublic schools threaten models like ours as they shift the focus to compliance for the sake of checking boxes, versus focusing on encouraging, embracing, and learning from new models and what they can offer to the education landscape as a whole.” Morrison added that the previous regulations for Tennessee private schools, especially around accreditation requirements, already made it difficult to get programs like hers up and running.

Now, these new requirements force private schools to look even more like public schools, reducing their autonomy and making it much harder to introduce unconventional teaching and learning methods or implement original ideas. “I assume these shifts in requirements are to ensure a standard of educational quality that all children are entitled to but, unfortunately, those standards are often outdated and do not reflect the innovation and ever-evolving best practices seen in modern education,” said Morrison.

For example, the new approval rules requiring a private school to have 10 or more students enrolled could prevent the emergence of microschools, which often begin with a tiny number of students. “Had this requirement been in place at our inception, our school would not exist,” said Morrison. “Although our enrollment reached 10 students by February, and grew by 500 percent by our second year, with this requirement in place, we could not have been cleared for operation. There would have been no opportunity to introduce an unconventional educational model.” Morrison’s school now enrolls 37 students and is continuing to grow.

For states like Tennessee, which earlier this month ranked #3 in CNBC’s list of the Top States for Business 2023, making it easier for education entrepreneurs to start and scale their small businesses should be a priority. Reducing regulatory obstacles is a good first step. “It is now time for those who claim to be pro-business to get behind education innovators and entrepreneurs,” urged Morrison.