New education reforms often translate into big money for private groups. Following the 2001 No Child Left Behind Act, states paid millions of dollars annually for companies to develop and administer the standardized tests required under the law. Companies also cashed in on a provision mandating tutoring for students at struggling schools.

Now, a movement to overhaul the teaching profession is creating another source of revenue for those in the business of education. More than half of states are changing their laws to factor student test scores into teacher evaluations and adding requirements for the classroom observations used to rate teachers. The main intent of the new laws is to identify which teachers are doing a good, bad, or mediocre job and to help them improve. One early outcome of such recent legislation, however, is a booming market that sells services and products to help states and school districts scrambling to meet the new standards.

“It’s an incredibly heavy lift for states,” says Sandi Jacobs, vice president of the National Council on Teacher Quality, a Washington, D.C.-based advocacy group. “Some have contracted out big pieces of it, whether it’s someone internal in the state or an outside provider.”

Nonprofit groups and for-profit companies alike are vying for contracts to design evaluations, train teachers and principals to use them, and set up online platforms to help sort the data that schools will be collecting. Private foundation money is subsidizing some of the contracts, but districts are also spending millions of public dollars, much of it from the Obama administration’s $4.3 billion “Race to the Top” initiative.

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