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By SCOTT CALVERT The president of Yale University shocked the Ivy League school Tuesday when he announced that he would step down to join a businessman's bold -- but some say risky -- attempt to create a national system of private schools. Benno C. Schmidt Jr. will become president and chief executive officer of the Edison Project, a plan to build a chain of 1,000 profit-making schools that its backers say will cost less to operate than public schools and provide a better education. The project is a venture of Whittle Communications, a Knoxville, Tenn., firm better known for the controversial "Channel One" classroom news program that drew criticism for its use of commercials. Schmidt, 50, who has been president of Yale for six years, had reportedly been mulling over the decision to sign on with Whittle for about a year. He announced his decision in a breakfast meeting with trustees before commencement Monday. He will remain at Yale until the trustees appoint an acting president for the 1992-93 academic year. Schmidt's announcement came after a tumultuous spring at Yale in which both Yale's provost, Frank Turner, and the Yale College dean, Donald Kagan, tendered their resignations. Schmidt is also leaving Yale at a time when the school faces a $15 million deficit in a $800 million budget, its first in ten years. The university is also considering a downsizing plan that would reduce the faculty by about 5 percent. But Yale trustees said Tuesday that Schmidt is leaving the 300-year-old school a stronger institution in every respect than when he was appointed. Earlier this month, he helped Yale kick off a five-year, $1.5 billion fund-raising campaign. He has been the most successful fund-raiser in Yale's history, helping the university collect nearly $600 million in pledges during the past two years. Schmidt's announcement stunned the Yale community. But it took the rest of the higher education community, including several professors and administrators at the University, by surprise as well. "I am surprised but not shocked," Nicholas Constan, assistant to President Sheldon Hackney, said this week. "And I'm disappointed because I think he is a good person and good for Yale." "It's kind of a stunning surprise," said Marvin Lazerson, dean of the Graduate School of Education. "I think it's also a reflection of how hard it is to be a university president today at a time of serious cutbacks in higher education and lots of public questioning of universities' role." In explaining his departure from Yale, Schmidt focused on his desire to improve the country's troubled educational system. "The schools of America are in difficulty and need fundamental structural change, not tinkering around the edges," Schmidt said. America's schools "have the capacity to carry the nation forward, or in the long run sink it," Schmidt said. Of his new job, he said, "There is nothing I could do that would carry such promise." "If this venture I'm embarking on now will be a failure, it will be a noble failure and we will learn a lot from it that will be of use," Schmidt told reporters Tuesday. Whittle Communications announced the Edison Project a year ago. Its goal is to open at least 100 schools by 1996, the rest by the year 2010. The schools, which could stay open eight hours a day and operate nearly year-round, eventually would offer education from preschool through high school. Chris Whittle, chairperson of Whittle Communications, has estimated the group may need $60 million to create its "blueprint for a new American school," and as much as $2.5 billion to open the first network of campuses. The National Education Association -- which represents more than 2 million education employees -- opposes attempts by private corporations, such as Whittle, to establish schools "for profit motives," NEA spokesman Bill Martin said. But like Schmidt, Vanderbilt University professor Chester Finn, who will join the Edison Project design team, said he believes the project will bring added vitality to public education, and therefore is not elitist. For instance, 20 percent of the students would receive full scholarships. James Larkin, the director of teacher education at the University, said although he is unaware of the Edison Project's details, educators should at least give the plan a chance. "I think you could say that the conditions of American education are sufficiently dismal that most well thought out plans that seek to provide alternatives would be worth at least a try," Larkin said. "Whether they would pan out or not, it's hard to say. The venture comes as the Bush administration pushes for a nationwide voucher system that would let students use public dollars to attend private schools. Whittle officials said the Edison Project doesn't depend on that plan being adopted, though the private school system would benefit from such vouchers. Schmidt, an expert on the First Amendment, graduated from Yale College in 1963 and the Yale Law School in 1966. He joined the faculty of the Columbia Law School in 1969, becoming dean of the law school in 1984. ITALIC: The Associated Press contributed to this article.

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