Dayton Daily News education reporter Scott Elliott writes about schools, kids, teaching and learning.
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This man is a genius
I met Thomas Allor Jr. Friday night at a tutoring fair put on by Dayton Public Schools. He was a friendly, jovial guy with a round face and a quick wit, and many parents were drawn to his flashy display on the video screen of the computer he had set up. The two parents I was following around instantly signed up for his tutoring service.
Allor is a Michigan math teacher. About four years ago, prodded by a graduate school professor, he started kicking around an idea for starting an online tutoring company on the side. No Child Left Behind was newly passed back then and it included a provision that earmarked millions of dollars for private tutoring for kids at low scoring schools. So he launched Tutorial Services.
Last spring at age 40, Allor retired from his school district teaching job to focus full time on tutoring kids over the Internet.
Let me tell you the rest of this story, then tell me if you agree that Allor is a genius. Here’s what he did.
First he spent hours and hours online searching for an existing online tutoring program he could use for his business. He ultimately went with Compass Learning, a Web-based program in which the student works through a self-guided curriculum.
Then he connected with a computer supplier. He told me he has a discount deal with Dell Computers, but it appears Allor also purchases at least some of his computers from corporations that trade them in after a one to five year lease.
Allor told me the computers he uses cost about $500 retail. I’m guessing he gets them at a deep discount — maybe half that cost.
Allor recruits students who are eligible for free tutoring paid by the federal government under NCLB. The federal law requires schools that are not meeting test goals to set aside 20 percent of their federal aid for private tutors for any student in the school that wants to hire one. There are very few restrictions on who the student can select for tutoring.
In Dayton this year, 20 percent of of the district’s federal aid is about $1.1 million. That will fund $1,600 in tutoring for about 700 kids.
So when Allor met parents at the fair Friday, he was offering quite a deal. He said he’d come to their homes and install a free computer they can keep. Then the students works on reading skills on their own through Compass Learning’s online curriculum at its website.
Allor and the parents can keep tabs on the student by logging on to Compass’ Website and checking their progress. Allor gets paid $30 for every hour of online work the student completes — the same fee he said he charged students for his one-on-one tutoring services when he was working as a teacher. If they fall behind, he calls to check up on them. Payment comes to Allor straight from the school district.
Allor told me he has about 135 students in three states, most of them using federal tutoring dollars to pay for his services.
So I started ballparking his cash flow. He makes about $1,600 per kid. I estimate the computer costs him roughly $250. Let’s suppose his fee to Compass is also $250 per student. And lets charge off another $200 per student in other costs, like travel, marketing and his own labor. Allor’s company has no other employees.
So that’s $1,600 of income minus $700 in costs per kid. If my math is close, he’s making about $900 per kid. Multiply that times 135 kids and he will make $121,500 this school year. Now I see how he could retire from teaching so young!
Anybody want to argue with me when I say this man is a genius?
Permalink | Comments (11) | Categories: My Favorite Posts, Online Learning
Comments
By Mark Perry
September 21, 2006 1:40 AM | Link to this
It’s just another example of “gaming the system”. Much the same as offering free scooters to old folks. As soon as “the system” starts taking a big enough hit, the game will be up and the guy will be out of business. …MarkBy Pass the Torch (Kelly)
September 20, 2006 10:51 AM | Link to this
There are many ways of getting youth the support they need in school, I suppose. But I think the intention of the NCLB funding was for more personal tutoring.By JIm
September 14, 2006 8:51 AM | Link to this
Taxpayer has it right… That is just one of the holes in the No Child Left behind Act. Money goes out from the school district with no accountability.By Oldprof
September 13, 2006 5:27 PM | Link to this
Wrong, Mary. Health care workers in federal employ earn comparable wages to those in the private sector: some (nurses, pharmacists) earn more. http://www.ourpublicservice.org/usrdoc/Medical-ClinicalResearchPublicHealthandHealth_Policy.doc But the big picture remains unchanged: among the professions, in all of them, if you rise to the top of the salary scale you get wealthy from working IN the profession—except for teaching, in which the only wealth available is for those who quit teaching and go into a different line of work. To put it another way, if you’re a business manager and you’re acknowledged as one of the best, GM and GE and IBM will bid competitively for your services; if you’re a teacher and you’re acknowledged as one of the best, no school systems will come calling with lucrative offers.By Keith
September 13, 2006 3:55 PM | Link to this
Beautiful. He has NO accountability. I thought that was the catchword to use against the teachers and those awful “unions” that they had that made them so “overpaid.” Nothing is said about what he loses if the students don’t perform up to snuff.By Mary
September 12, 2006 4:00 PM | Link to this
“taxpayer”, I do not think we have enough details to understand this. He is monitoring the students. Presumably when he contacts those lagging behind,he assists them in some way. “old prof”, medical doctors and lawyers do not become wealthy when simply working for the government. Many professions take pay cuts to work as a public servant. I am sure there are many doctors working for the National Institute of Health, the CDC, etc. Many brilliant scientists and engineers do not attain wealth from their inventions or patents - the companies or government own the patents in most cases.By taxpayer
September 12, 2006 10:19 AM | Link to this
I don’t understand why this guy gets $30 every time a student uses someone else’s software. How is he adding any value? He is not doing any actual tutoring himself; he is not online with the student. Why can’t the student go directly to Compass Learning? What a ripoff of public funds.By Oldprof
September 12, 2006 9:20 AM | Link to this
My point exactly, Mary. Ebbers had to quit teaching and become a corporate mogul. Now, lawyers get wealthy practicing law, M.D.s practicing medicine, Chad Johnson practicing football. Almost every profession (note: NOT job!) carries the potential for a few outstanding individuals to get wealthy—but not teaching.By Mary
September 11, 2006 9:08 PM | Link to this
“Oldprof”, you are overly dramatic about the plight of teachers compared to other professions. All public employess whether they are teachers, engineers, doctors or lawyers have a limit to their public paycheck. However, some go into private enterprise based on their public professional experience and in some cases make quite a bit of money. I am sure some teachers are among the ones who make money in instructional aids or other educaiton related businesses, including the man Scott describes. Bernie Ebbers was a high school football coach, and I think a teacher, before he changed careers and became CEO of Worldcom. Of course, he is now considered to be one of the posterchildren of corporate corruption.By Oldprof
September 11, 2006 8:07 PM | Link to this
He’s a real genius if he can get the desired results from his students. Otherwise, he’s just another White Hat who figured out where the money was and how to glom some of it. Interesting, isn’t it, how you can get wealthy at just about any profession EXCEPT teaching—all the well-off teachers have quit and gone into something else (like selling and administering an online tutoring program, or consulting, or being Leo Buscaglia).By Mary
September 11, 2006 3:19 PM | Link to this
I would say he is more entreprenual (spelling?)/good at business, driven, and effective at what he is doing than genius. Also, give his professor credit for the suggestion and his own caution before retiring. (How did he retire at age 40, anyway and is he actually collecting retirement at this point?) Also, keep in mind he is self employed and has to pay his own estimated taxes including social security and Medicare, also his own health care expenses out of the estimated $121,000 income and do a lot of bookkeeping to document his business expenses. He probably puts in a lot of hours, and has to market himself as well as work at home. “What is a genius?” is a special program on CNN next Sunday at 10 PM.