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Wealthy parents are buying their kids $75,000 AI schooling with guardrails as schools grapple with a literacy crisis

September 10, 2026
in News
Wealthy parents are buying their kids $75,000 AI schooling with guardrails as schools grapple with a literacy crisis

Rich families have tried to personalize their children’s education since the days of ancient Greece, when Alexander the Great’s father hired Aristotle as a tutor for his son.

The AI age is ushering in a new iteration of this behavior as anxiety looms about how the technology will reshape work opportunities for young people and how best to prepare them for an economy that could see less entry-level hiring and more requirements for AI literacy.

Some families are shelling out up to $75,000 per year to send their kids to the AI-powered Alpha School: A spokesperson told Fortune has more than 1,200 students as it plans to expand to 50 campuses this year. There, students spend two hours per day on core subjects with an AI tutor before devoting their afternoons to workshops designed to hone skills like public speaking and relationship building. Human teachers called “Guides” are still there to get to know and motivate the students, but they don’t plan lessons or grade homework.  

“I definitely think using AI well is a skill in the future, if not the skill, so it’s kind of a disservice not to have that in school,” Sarah Cone, a venture capitalist whose 8-year-old daughter attends the Alpha School in New York, told Fortune.

Affluent families like Cone’s can curate schooling that integrates AI use with human instruction through places like Alpha as schools nationwide figure out how to teach or restrict the technology, with New York City recently announcing a one-year ban on student-facing generative AIfor kids in 2-K through eighth grade. Researchers have warned indiscriminate AI use can erode the cognitive effort needed for learning, but suggested intentionally designed AI tools, like chatbots acting as math tutors instead of giving away answers to problems, can improve learning.

But Huriya Jabbar, a professor of education policy at the University of Southern California, explained that public schools with fewer resources often can’t implement that kind of AI curriculum due high teacher turnover. The thought is someone could be trained in how to engage students with it, but then leave in a year. She also cited other constraints like schools serving low-income students facing more pressure to boost test scores with less bandwidth for innovating new approaches to teaching.

“AI—just like any other tool, technology, curriculum—is going to play out in an already unequal landscape,” Jabbar told Fortune.

Schools grapple with literacy

Introducing more technology in schools isn’t a new concept, but the rollout of computers to schools since 2014 to help students learn is now being blamed for worsening students’ ability to think.

Neuroscientist Jared Cooney Horvath testified to Congress screen-based learning was distracting from learning and leading to lower test scores, saying in the hearing “our kids are less cognitively capable than we were at their age.” 

“This is not a debate about rejecting technology,” Horvath said separately in his prepared remarks. “It is a question of aligning educational tools with how human learning actually works. Evidence indicates that indiscriminate digital expansion has weakened learning environments rather than strengthened them.”

A similar dynamic is playing out with AI as students use chatbots without the guardrails provided by schools. An estimated 84% of high school students report using AI for homework help, and one in five high schools allow AI use but have no formal policy for it, according to 2025 surveys from College Board, the nonprofit that administers SAT and AP testing. But using AI for homework doesn’t translate to learning for exams. A study looking at AI adoption by 26,811 Chinese students in grades seven through 12 found AI use boosted homework scores by 18%—then tanked exam scoresby 20%.

This is happening as foundational literacy skills are eroding. Reading and math performances for 15-year-olds in 38 free-market democracies on the globally watched benchmark Programme for International Student Assessment (PISA) reached the lowest average ever recorded, with U.S. students’ average reading scores dropping by 14 points to 490, the lowest since it began participating in the exam in 2000.

Worsening learning outcomes in grade school follow students to college. Professors previously told Fortune students are arriving to classrooms unable to process long passages and leaning on AI summaries. Gen Z is also reading less than other generations, with Americans between 18 and 25 reporting they read 5.8 books on average in 2025 compared to 12.1 for Americans 65 and older and 8.2 for those between 30 and 44.

But the goal of educators still has to be developing writers and readers even when AI can interpret texts and generate writing, according to Kirsten Peterson, a senior project manager at the nonprofit Education Development Center.

”We want readers who can interpret, question, make connections, recognize perspective, evaluate evidence, sit with ambiguity, and form their own understanding,” Peterson told Fortune. “We have to be really careful not to use AI to remove the very thinking students need to practice in order to become literate.”

The post Wealthy parents are buying their kids $75,000 AI schooling with guardrails as schools grapple with a literacy crisis appeared first on Fortune.

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