3 Emerging Conversations in the Education Sector: Company Executives Weigh In

Education company leaders are facing steep challenges, as the market is rattled by sweeping changes pushed at the federal level by the Trump administration and by the rapid evolution of new technologies that could fundamentally alter teaching and learning.

The administration’s sweeping actions have included abruptly ending waivers that allowed for some ESSER funds to be spent past a pre-established deadline, as well as the implementation of broad tariffs on goods coming into the country, which have drawn promises of reciprocal penalties on U.S. goods from longtime trading partners such as China and Canada.

With so many market forces seemingly beyond their control, education company executives say they’re determined to focus on the levers they can influence. Those include their own companies’ productivity and financial stability, and the development of products that will put them in a strong position as school districts’ needs and willingness to spend become clearer in the months ahead.

EdWeek Market Brief’s editorial team spoke with leaders of education companies as they gathered at the recent ASU+GSV Summit, a major gathering of executives, investors, philanthropies, and others focused on the market.

Here are three common themes that emerged from our conversations with those executives about how they see the demands from school districts changing, and the challenges those shifts pose for companies in the market.

1. There’s an Ongoing Struggle to Separate the Hope of AI From the Hype

The use of artificial intelligence in the K-12 industry has become baked into seemingly every discussion about tech in schools and the obligations of organizations seeking to serve them.

Companies that offer curriculum products, both core and supplemental, are still working to understand exactly how AI capabilities can help them better serve teachers and students, with some feeling cautious but guardedly optimistic about the ultimate impact on learning.

Sari Factor, chief strategy officer at Imagine Learning, a provider of core and supplemental products, said the company is focused on making sure AI is used in a manner that meshes with a broader pedagogical approach, and doesn’t become a distraction that pulls students away from the end goal.

Imagine Learning recently released a white paper on the topic of curriculum-informed AI, which explores the technology’s potential to shape academic resources. Factor’s organization and other large players in the market are, for the most part, using and developing AI tools directed at supporting educators in the classroom, in an effort to save them time, help them focus on connecting with students, and lessen their workloads.

“We have a particular view on AI,” Factor said. “We think it can be a tremendous help to teachers, and maybe over time, to students as well.”

“We’ve launched a few features, and we have more features coming. But it’s all consistent with, how do we help save teachers time and not take them off track, so that they can keep students on track?”

Matthew Mugo Fields, general manager of supplemental and intervention solutions at HMH and president of its Heinemann publishing division, sees a risk that the proliferation of the technology will divert schools, and companies tasked with serving them, from focusing on what resources are making a difference for students.

“We are in full AI hype cycle right now,” Mugo Fields said. “And I do worry that some of the overpromising that may be happening could lead to cynicism about, what are appropriate and really powerful uses of AI.”

The problem is squarely in focus at a conference like ASU+GSV, he said, where you can “walk around and have the impression that it’s more about how much AI do you have, instead of how much success and impact that we have.”

Factor said she’s interested in how AI changes the demand and expectations for assessments, including federally mandated testing in reading and math testing for students in grades 3-8.

“Will that stay or will that go? I don’t know,” she said. “In a world with generative AI, what are you testing on?”

One of the questions being posed now to the market is how schools can test on foundational academic skills while also measuring “broader competencies” that will become more important in a world with generative AI, such as students’ critical thinking and collaboration skills, Factor said.

Assessment giant ETS is also looking closely at those potential shifts in assessment strategies and market demands, Senior Vice President of K-16 Skills and Educator Solutions Paul Gollash said.

There’s a new focus on “how to measure what matters and [how to] continue to innovate on measurement science,” he said.

The rise of agentic AI, or the ability for AI modules to autonomously make decisions and provide a higher level of support, is a source of intrigue for some companies in the market.

The development of agentic AI is allowing for a greater use of “walled garden” environments, or modules that can be built on private, customized data and don’t rely on large, public modules. The use of walled gardens helps reduce privacy concerns that often hold back adoption of AI technologies.

“I’m excited for the agentic AI tools we’re seeing,” said Jon Corippo, co-founder of Eduprotocols, makers of instructional online courses for students.

New forms of the technology are moving the education market away from “a free-for-all, and it’s giving teachers immediate data,” he said. “It’s giving kids immediate feedback, and I’m really excited about what that looks like this year.”

2. It’s an “Incredibly Uncertain” Moment for Federal Ed Policy

The Trump administration’s K-12 policy proposals are rippling through the market in largely two ways: They’re raising concerns about a reduction in federal spending on education, and raising questions about what effect larger actions, such as the potential implementation of sweeping tariffs, will have on the economy overall, including districts’ local tax revenues and bottom lines.

When asked about the level of anxiety he’s seeing among districts and schools, Gollash said many seem to want to “pause, take a beat.”

“It’s an incredibly uncertain moment for everyone in almost every industry, and education is not exempt from that. But I haven’t heard a lot of panic.”

Gollash and other executives in the space say the fact that federal funding plays a limited role in districts’ budgets — it’s about 10 percent of total K-12 funding — helps assuage major concerns about potential cuts to federal education spending.

However, these changes at the federal level are happening at at time when some districts are already financially strained, largely because of their decreased student headcount.

“Public school enrollments were already under pressure, so I think that’s probably the biggest impact [on district budgets], if you’re a district superintendent,” Gollash said.

Enrollment declines are also a major concern for Mugo Fields, of HMH. In some states and districts, lower birth rates and reductions in immigration are also leading districts to assess how they’re spending their dollars, he said.

“That’s a very real challenge,” he said. “It puts front and center issues around prioritization of how [districts] invest their precious resources.”

At the same time, school districts are increasingly focused on the effectiveness of educational products and materials — which is a positive development in the long-term for student learning, Mugo Fields said.

“And I think that’s a great thing,” he said. “That will cull the herd, if you will, in all the right ways.”

That emphasis will help districts become more discerning as they face pressures to support academically struggling students amid budget constraints, the HMH official added.

One of the concerns Melissa Loble, chief academic officer at learning management system provider Instructure, has about changes emerging from the federal level is that they could cause less cohesion around common AI standards for the industry.

“With no federal agency creating regulations necessarily, is AI going to become the wild, wild west?” she said. “How do we continue to think about how we protect students’ privacy, security?”

Some district leaders may be excited at the prospect of having fewer federal regulations to navigate, but it opens a question about how to ensure that protections for students remain, she said.

(The Trump administration’s dismantling of the U.S. Department of Education has decimated the staff in several offices that intersect with education businesses, including the Office of Educational Technology and the Small Business Innovation Research program, as well as the Office for Civil Rights.)

The question is whether non-governmental organizations will “come together and start to lean into direction and policy,” she said, “while we wait for the states to step in.”

3. There’s New Momentum Behind Career and Technical Education

One of the largest sources of optimism among education company leaders is the increased interest in career and technical education, college and career readiness, and measuring student skills in creative ways to capture competencies that are not easily measured in traditional assessments.

While these discussions aren’t new, the focus on those areas among federal and state policymakers has accelerated recently, and leaders in the space expect to see increased resources poured into the area.

As the sub-sector heats up, investors and large players in the market are also looking to companies that offer products and services focused on connecting K-12 course materials to career education as potential investments or acquisition targets.

“College and career readiness has been a space we’ve been trying to find an investment in for awhile,” said Joe Watt, vice president and managing director of the Education Impact Fund at ECMC Group, a student loan guaranty agency.

The Education Impact Fund recently found one such company, investing an undisclosed figure in YouScience, maker of aptitude assessment Brightpath, which helps students choose college and career pathways, as well earn industry certifications, and complete work-based learning opportunities.

One of the challenges historically, Watt said, is that there hasn’t been a clear buyer for college and career readiness tools, because they haven’t been at the top of districts’ priorities for purchasing.

But the landscape is changing, he said.

“Everyone across this ecosystem — schools, parents, kids, investors — are recognizing the importance of direct throughlines from education to career,” he said. “Schools are investing more there because they recognize the importance.”

One of the other factors influencing the increased interest in CTE is connected to the industry’s increased ability to measure impact and effectiveness, which has become a large part of the conversation surrounding the topic, said Lisa Dughi, CEO of NAF.

NAF operates a public-private network of career-centric academies at high schools across the country. The nonprofit is also the maker of Knopro, a free platform that allows high school students to track work-based learning experiences, which is available to all students — whether or not they’re enrolled in one of its academies.

In her 13 years at NAF, Dughi said she’s seen a “much more significant focus” on what CTE looks like and how it’s being measured.

“How are we evaluating it to ensure that there really are the outcomes that we’re talking about?” she said.

At NAF, they’re focusing on how to make sure their levels of quality are tied to greater outcomes for students. The organization is also working on ways to measure students’ achievements post-secondary, which has been a common challenge in the space, she said.

Broadly, districts and K-12 vendors are also focusing on how they can better capture students’ capabilities in a range of difficult-to-measure areas — particularly those that are going to be in higher demand as AI technologies become more ubiquitous, she said. Those are often called durable skills.

Gene Shi, CEO and co-founder of student portfolio and family engagement app Learning Genie, said he expects to see more focus on CTE not only for high school students, but also for middle school students “to give them real skills, durable skills, soft skills [paired] with curriculum standards,” he said.

“We also cannot predict what the AI era will be,” Shi said. “So more people are saying jobs will be destroyed. But the [goal] for the education industry is that we need to prepare — lifelong learning, problem-solving — those will be lasting.”