Research reveals skyrocketing cost of outsourcing at Bay Area school district

A new research brief from private equity watchdog group Private Equity Stakeholder Action (PESA) examines how outsourcing at one Bay Area school district has funneled millions of dollars in taxpayer money to private equity-owned special education providers at the expense of stability and support for students with disabilities. 

“Spending More, Serving Less: The High Cost of Private Equity in Special Education” reveals that West Contra Costa Unified School District (WCCUSD) has more than doubled its spending on outside vendors and contractors over the last five years, from $59 million in the 2019-2020 school year to $117 million in 2024-2025, representing an astounding 23% of district spending. Of that $117 million, WCCUSD spent more than $14 million in 2024-2025 for three controversial private equity-owned contractors to provide services for students with disabilities: The Stepping Stones Group (owned by Leonard Green & Partners), ProCare and Sunbelt Staffing (both owned by Vistria Group). 

Special education support provided by private equity contractors in the district include paraeducation, speech language pathology, physical therapy, and school psychology. Notably, had this work been done by employees of WCCUSD rather than outsourced, the district would have saved nearly six million dollars of taxpayer money. District invoices show that contracted employees spent nearly 154,000 fewer hours with students than permanent employees would have, equivalent to 40 fewer hours for each of the nearly 4000 students with a disability in WCCUSD.

“These temporary outside providers don’t know our students. I had a student in our Extensive Support Needs program go months without receiving speech services because the contractor was pulling out a General Education student with a similar name by mistake,” said Richelle Milford, a WCCUSD School Psychologist. “Unfortunately, this error impacted both the ESN student and the General Education student, who was already struggling to keep up.”

In the education sector, private equity firms have invested in hundreds of companies that contract with school districts to provide tools and services that were previously managed in-house. As schools struggle to manage services in the midst of staffing crises and cuts to education funding, private equity firms see an opportunity to profit. Unfortunately, outsourcing roles to private companies weakens the school environment, introducing profit motives to spaces that should prioritize student wellbeing over all else. 

“Private equity firms are raking in millions of dollars of taxpayer money while West Contra Costa students are receiving less of the individualized, real-life attention students need,” said Azani Creeks, lead researcher and author of the report. “Private equity profit motives should be nowhere near children’s education. The West Contra Costa County community ought to demand their schools use their tax dollars more efficiently by investing in educators and staff in their community, not on outsourced, underpaid workers hundreds of miles away.”  

The Stepping Stones Group, one of the private equity-owned companies contracted by WCCUSD, has recently come under fire for its treatment of workers. In 2024, Stepping Stones Group agreed to pay $4.25 million to settle a class action lawsuit alleging widespread wage and hour violations, including failure to pay all minimum wages, failure to provide meal periods or pay for missed meals, failure to provide rest periods, and untimely payment of wages. Despite agreeing to settle, Stepping Stones Group denied all claims and maintains that it has fully complied with the law.