SHAREHOLDER ALERT: Lundin Law PC Announces Securities Class Action Lawsuit against K12, Inc. and Encourages Investors with Losses to Contact the Firm

LOS ANGELES, CA / ACCESSWIRE / August 10, 2016 / Lundin Law PC (the “Firm”) announces that a class action lawsuit has been filed against K12, Inc. (“K12” or the “Company”) (LRN) concerning possible violations of federal securities laws between November 7, 2013 and October 27, 2015 (the “Class Period”). Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm in advance of the September 19, 2016 lead plaintiff motion deadline.

To participate in this class action lawsuit, click here. You can also call Brian Lundin, Esquire, of Lundin Law PC, at 888-713-1033, or e-mail him at brian@lundinlawpc.com.

No class has been certified in the above action. Until a class is certified, you are not considered represented by an attorney. You may also choose to do nothing and be an absent class member.

According to the complaint, K12 issued false and misleading statements and/or failed to disclose: that the Company published misleading advertisements about students’ academic progress, parent satisfaction, graduates’ eligibility for admission into the University of California and California State University, class sizes, the individualized and flexible nature of K12’s instruction, hidden costs, and the quality of the materials provided to students; that the Company submitted inflated student attendance numbers to the California Department of Education in order to receive additional funding; that K12 was open to potential civil and criminal liability due to these practices; that K12 would likely be forced to end these practices, which would have a negative impact on its operations and prospects; and as a result of the above, the Company’s public statements were materially false and misleading at all relevant times. When this news was disclosed, shares of K12 decreasing in value, causing investors harm.

Lundin Law PC was founded by Brian Lundin, a securities litigator based in Los Angeles dedicated to upholding shareholders’ rights.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contact:

Lundin Law PC Brian Lundin, Esq. Telephone: 888-713-1033 Facsimile: 888-713-1125 brian@lundinlawpc.com http://lundinlawpc.com/

SOURCE: Lundin Law PC

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Morgan Hill K12 charter school closes

A Morgan Hill charter school is closing its doors due to a terminated contract and financial troubles, which means almost 250 students will have to enroll in new schools before the start of the academic year, Santa Clara County education officials said Wednesday.

Silicon Valley Flex Academy at 610 Jarvis Drive served 240 students between grades six to 12 and opened in 2011 under a countywide charter, county education officials said.

In November, Santa Clara County’s Board of Education had renewed the academy’s charter for another five years from 2016 to 2021, according to the county office.

On Monday night, the academy’s board told the county the academy would close because of “fiscal unsustainability” after its service provider, K12, cut their contract, county officials said.

Classes for the new school year were set to begin on Aug. 11, according to the school’s website.

The county office is working with the charter school’s board along with Morgan Hill Unified School District and its Superintendent Steve Betando to register the students for the 2016-17 academic year.

The district’s first day of school is scheduled for Aug. 16.

“Our first and highest priority is always the wellbeing of the students,” county Superintendent of Schools Jon Gundry said in a statement.

“Since learning of this impending action, I have been in close contact with Superintendent Steve Betando to ensure students and families will have options and opportunities following this decision by the Silicon Valley Flex Academy board,” Gundry said.

The school “boasted a blending learning model by combining an online K12, Inc. curriculum with offline lessons and small-sized breakout sessions,” according to the academy’s Parent Teacher Organization website.

Staff members from the academy and county’s Charter Schools Office are working to ensure they meet requirements to close the charter school under the state Department of Education and education code, county officials said.

Parents can speak to staff about the closure at the academy today and next week, according to county officials.

The district has scheduled an information meeting on the transition for academy parents and students at 7 p.m. on Aug. 4 at the Ann Sobrato High School theater on campus at 401 Burnett Ave. in Morgan Hill.

Craig Barrett Makes $190,000 As a K12 Inc. Board Member

Posted

By David Safier

on Mon, Jan 11, 2016 at 2:30 PM

click to enlarge

Over the years, I’ve written many posts about the shoddy corporate practices and poor student performance at schools run by K12 Inc., the for-profit, publicly traded online education corporation (Its Arizona charter school, Arizona Virtual Academy, has 4,600 students sitting behind their computers at home, if, that is, they actually take the time and effort to log in and do the work). I wrote my most recent post about the corporations’s sinking stock value a few weeks ago. And I’ve written a few times that Arizona’s Craig Barrett sits on K12 Inc.’s Board of Directors. But this is the first time I’ve written about his compensation. For the fiscal year 2015, Barrett received $190,000 from the corporation. Barrett is a very, very busy man with his fingers in a whole lot of pies. You can be certain he didn’t put in 40 hour weeks to earn his Board pay.

Why, you may ask, should we care about Barrett’s involvement in K12 Inc.? The answer is, Barrett is a powerful voice in Arizona education, advocating for what he says are necessary reforms to improve our schools. He’s not shy when it comes to talking about his connections and accomplishments. For instance, he’s happy to announce that he’s President and Chairman of BASIS Schools, Inc., the for-profit Education Management Organization that runs the chain of BASIS schools. But so far as I know, he never talks about his connection to the shoddy, failing K12 Inc. I’ve looked hard on the internet, read his op eds, listened to some of his interviews and speeches. When it comes to K12 Inc. — nothing but crickets. A man as proud of his accomplishments as Barrett should be more open about this aspect of his educational life, and more forthcoming about what he, as a board member, is doing to improve the corporate and educational culture at K12 Inc.

Craig Barrett’s list of connections and accomplishments is vast. He’s the retired CEO of Intel, and he’s worth hundreds of millions of dollars. As I mentioned earlier, he’s President and Chairman of BASIS Schools Inc. He’s also a board member of Achieve, Inc., which was instrumental in creating and promoting the Common Core standards, as well as an influential member of any number of education-related organizations. He travels around the world promoting STEM education (Science, Technology, Engineering, Mathematics), and he’s very outspoken about what he thinks is wrong with Arizona education and what should be done to fix it. His ideas fall squarely in the privatization/”education reform” camp. During Jan Brewer’s governorship, he chaired her Arizona Ready Education Council which worked to steer the state’s education priorities, most of which are being carried forward by Gov. Ducey’s Classrooms First Initiative Council. It’s fair to say he’s the most powerful unelected individual in Arizona education.

So if he sees himself a good-education advocate, especially an outspoken one who touts the successes of BASIS schools as a model for other schools, he should feel a duty to explain the way his $190,000 a year position on the K12 Inc. board is part of his commitment to improving education in Arizona and nationwide. Maybe there’s more value in the corporation’s online school model, which has been so regularly and roundly criticized, even from people within the “education reform” movement, than we know. Maybe he’s working inside the corporation to improve its operations and education delivery system. A man as well spoken as Barrett, a man who writes as well as Barrett, a man who can command a public forum as easily as Barrett, should really make an effort to explain this questionable aspect of his educational involvement.

BASIS BOARD MEMBER Bonus News:  How much does Craig Barrett make as President and Chairman of BASIS Schools Inc.? I don’t know, because it isn’t a matter of public record. BASIS Schools Inc. is a for-profit Education Management Organization, so, though nearly all of its income is taxpayer money which the state gives to its charter schools, once the money that flows from the state budget to charter schools is sent upstairs and hidden behind a for-profit pay wall, it disappears from view. We don’t know if Barrett and other board members are paid, and if so, how much. We have no idea how much money BASIS founders Michael and Olga Block make. We used to know back when BASIS was entirely nonprofit and the Blocks had to report their salaries on the nonprofit’s publicly available 990 tax forms, but no more.

But it’s interesting to see who sits on the board of BASIS Schools, Inc. Of course, there’s Craig Barrett, a man whose political and educational priorities lean conservative. And there’s co-founder Michael Block, who has worked as a consultant for ALEC (the American Legislative Exchange Council), an organization whose main mission is to create conservative legislation which can become state law across the country. Also sitting on the seven member board is Clint Bolick, whom Gov. Ducey just appointed to the Arizona Supreme Court. Bolick is currently the head of the Goldwater Institute’s constitutional litigation team. Another board member, Terry Sarvas, is a member of the Goldwater Institute, and yet another, Steve Twist, is a founder of the Goldwater Institute.

BASIS’s conservative credentials run wide and deep — which is fine, of course, perfectly acceptable, but well worth noting.

Tags: Craig Barrett, K12 Inc., BASIS Schools, Inc., Arizona Ready Education Council, Classrooms First Initiative Council, Michael Block, Clint Bolick, Terry Sarvas, Steve Twist, Image

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I am sure if you ask the BASIS bunch to work for nothing to support select student success, they would. After all the 1100 local PUBLIC school board members in 223 publically elected and transparent school districts in Arizona, DO work for zero dollars.

Posted by

Frances Perkins

on 01/12/2016 at 7:54 AM

It’s time for more transparency in the Charter for profit school industry. After all these are taxpayer dollars, how much is spent in the classroom vs. profit? Who knows ?
I worked as an engineering consultant for many years most often on public projects. We had to disclose, salary info, overhead rates, cost data, profit and so forth. Why? Because public money was involved.

Posted by

Michael S. Ellegood

on 01/12/2016 at 8:29 AM

Sound like Mr. Barrett has set himself up with a pretty substantial retirement at taxpayers expense. I do not need to give you a lesson in civics but in order to put a stop to this rape of state revenues is very simple. A small change in the leadership of the State Senate. Senator Marco Rubio is absolutely correct when he defends himself for missing sessions of the United States Senate. Notwithstanding the rules of the U. S. Senate it’s a numbers game, it is not the number of NOs that pass legislation, it is the number of Yes votes. While it is true he is collecting pay for being a Senator, if he is going to vote NO, so what if he isn’t there. It is the 51 YES votes that passes legislation. Why is this important? Here in Arizona it is 31 Yes votes in the State House and 16 Yes votes in the State Senate. Right now the State Senate is split 17 Republican State Senators and 13 Democrats. That means a change of only four state senators and the control of the State Senate shifts to the Democrats. The committee majorities would be Democrat and the flow of legislation would be in the hands of the New Democrat power structure. That means without the approval of the State Senate no budget, no new laws or changes to current laws could take place. Before anything goes to the Governor for a signature to become law BOTH houses of the legislature must be in agreement. Getting back to Mr. Barrett and publicly fund education systems, no money would flow, no formula of distribution could be decided until the 16 Democrats in control of the State Senate voted YES. See how powerful only a change of four State Senators would be. With one or the other bodies of the State Legislature in control of the Democratic members, things could and would get done, but the name of the game then would be compromise. Working together to draft bills that could pass both house and then be sent to the Governor to become law. The Governor could of course veto the legislative action, then more compromise would be necessary to craft legislation but it sure would beat the five or six legislative kingpins dictating budget and other public decisions from a broom closet of the State Capitol Building which by the way doesn’t even belong to the state anymore. One state senate change to start with would be in Legislative District 11, North Pima and Pinal Counties. State Senator Steve Smith with his radical ideology desperately needs to be replaced. A very qualified and highly experienced in public affairs candidate has stepped forward named Ralph Atchue. Mr. Atchue is currently Secretary/Treasurer of the Casa Grande Democrats
club. There is one recommendation only three to go. Wow, sounds simple doesn’t it, instead of tax cuts for the rich and powerful special interests, a new day, taxpayer funds invested in Arizona families and especially our kids. Educated and job trained citizens to bring economic prosperity to a flourishing and thriving Arizona.

Posted by

hakeson

on 01/12/2016 at 8:38 AM

$190K. Nothing close to the annual comp K12’s CEO tried to shovel pass the shareholders…

Posted by

Susan A Smith

on 01/12/2016 at 9:19 AM

This is the first time I have ever seen a salary of a charter school administrator published. Since charter schools are taxpayer funded, it would be good to see all administrative salaries published every year with the same formal transparency as public schools. Back to 1994 would be even better, whether the school failed, or whether the administrator retired with a golden parachute of his/her own design. When you read and watch mainstream news reporting administrative overhead not only as a percentage but also in dollar amounts, why have “reporters” refused to report charter salaries for so many years?

Posted by

Thinking_Aloud

on 01/14/2016 at 8:27 AM

David Safier wrote a short article about the “real” Craig Barrett in 2013 including this
“… by Barrett, who stays under the radar except when he helped campaign against Prop 204, the one cent sales tax for education. But his real power isn’t in swaying public opinion. It comes from whispering in Governor Brewer’s ear and steering the legislature toward adopting his educational ideas ie:
Don’t add a penny to K-12 school funding. Freeze it right where it is, even though we’re spending about 20 percent less than five years ago and we’re near the bottom of the nation in per-student funding.
Send more money to charter schools. That, of course, would mean less for district schools. And districts can forget about trying to pass bonds or budget overrides. Those funding options would be wiped out. But charters would still be able to float bonds to build new schools. So if Arizona’s student population goes up, districts would have no way to handle the overflow, and charters would be more than happy to step in and fill the void.
Set teacher salaries based on student performance, not experience or education. Those lucky teachers in high-performing, high-rent districts could expect their salaries to climb at the expense of teachers in low-income areas. And schools, like teachers, would get performance bonuses, meaning those same high-rent districts would find themselves with extra cash while districts with low-income students who need the most resources would see their allotments shrink. And if any district slips into failing territory, the state would take it over. No extra money would go along with the takeover, just loss of local control.”
Now we are dealing with Prop123, that will lead to the death of public instruction in our state.

Posted by

on 01/14/2016 at 1:12 PM

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Criticism escalates for online charter operator

By John Fensterwald | June 27, 2016 | No Comments

Credit: OJO for iStock.

(Updated  June 28 with statement from K12, Inc.)

A full audit by the state controller and legislation that will be heard this week could threaten the operation of California Virtual Academies, a network of nonprofit online charter schools tied to the publicly traded education company K12, Inc.

On Friday, the office of State Controller Betty Yee announced it will conduct a $300,000 audit of CAVA in the wake of news media reports of questionable attendance records, poor academic performance of its 14,000 students and evidence of a conflict of interest regarding the nonprofit school’s connections to its sole-source supplier and operator, K-12. If the audit substantiates mismanagement and improprieties, State Superintendent of Public Instruction Tom Torlakson could recommend that the State Board of Education revoke CAVA’s charters.

On Wednesday, the Senate Education Committee will take up Assembly Bill 1084, authored by Assemblywoman Susan Bonilla, D-Concord. Primarily targeting K12, Inc., it would ban nonprofit online charters from contracting with for-profit companies for instructional services. The bill also would eliminate for-profit online charter schools, of which there are a handful in California.

The bill stands a good chance of making it to Gov. Jerry Brown’s desk. The Legislature passed a less sweeping version – banning for-profit online charters but failing to address the K12, Inc.-CAVA connection – last year. But Brown vetoed AB 787, and in his veto message wrote, “I don’t believe the case has been made to eliminate for-profit charter schools in California.” And he cautioned about using “somewhat ambiguous language” that could be interpreted to “restrict the ability of non-profit charter schools to continue using for-profit vendors.”

Bonilla is convinced that mounting criticism of profit-driven online charters, CAVA in particular, and calls within the charter industry for reform warrant tight restrictions. And she said for-profit companies shouldn’t be running charter schools. “There is a conflict between making money for shareholders and spending it for educating students,” she said.

In a statement Tuesday, Mike Kraft, vice president of finance and communications for Virginia-based K12, Inc., wrote, “There has been an enormous amount of misrepresentations made about the California Virtual Academy, CAVA, schools as a result of unfair and biased reporting, and by the agenda of some Sacramento special interests. Each of the CAVA schools we serve are transparent and are also audited each year by the California Department of Education for compliance with state education laws and regulations.”

“The CAVA schools and their Boards will work with the Controller to review the various issues identified,” he continued, “and we believe the result of the audit will clarify the many inaccurate reports and allegations that are circulating about the CAVA schools.”

The California Charter Schools Association estimates that 2 to 3 percent of the state’s charter schools are affiliated with or run by for-profit entities and enroll 20,000 to 30,000 students – 4 to 5 percent of charter school students in 2015-16. Only one organization, Opportunities for Learning, with six schools, is an actual for-profit corporation, according to the association.

CAVA, with 14 schools, enrolls approximately 14,000 students. In a two-part investigation by reporter Jessica Calefati this year, the Mercury News reported that fewer than half of CAVA students graduate, and “almost none” pass the courses required for admission to the California State University and the University of California. CAVA told the newspaper that the graduation rate for students who stick with the program for all four years is 79 percent, about the state average. Go here for its response to the series.

The newspaper reported that CAVA teachers were instructed to record the attendance of students who check in online for as little as one minute daily, enabling the school to bill the state for a full day’s tuition payments. In June 2015, more than 30 CAVA teachers filed complaints with the state and charter authorizing districts charging that CAVA violated state and federal laws by failing to provide special education services and inflating enrollment figures. CAVA denied all of the charges, and suggested they were part of an effort to unionize teachers at the schools (see EdSource story).

Related

A study of online charters in California by the Center for Research on Education Outcomes, or CREDO, at Stanford University found that online students were far behind their classroom-based peers. Based on test scores, CAVA students on average fell a third of a year behind their peers in math.

Virtual schools fall under the larger category of independent study schools under current state law. Because of how they are geographically located, CAVA’s charters can enroll students in all but remote counties in Northern California. The Mercury News reported that CAVA prefers to pursue authorizing approval through small districts without the capacity for effective oversight. The California Virtual Academy of San Mateo is authorized by the 7,000-student Jefferson Elementary School District in Daly City, which, the newspaper reported, has taken in more than $1 million in oversight fees during the past decade. The superintendent acknowledged that he knew little about the charter organization’s operation that his district by law is required to monitor.

Independence questioned

The state controller’s audit will examine whether the boards of trustees of the CAVA campuses have maintained the arm’s-length distance in their dealings with K12, Inc. that the law requires between charitable organizations and entities they contract with. The Mercury News investigation found that K12, Inc. named the trustees of the CAVA of San Mateo, who routinely approved all motions at meetings run by a K12 employee. By providing all instruction services, such has hiring and managing teachers and running the school operation, K12, Inc. is entitled to as much as 75 percent of a school’s revenue, the Mercury New reported.

In a report earlier this month, the National Alliance for Public Charter Schools and the National Association of Charter School Authorizers pointed to “significant problems” with online charter schools and concluded, “Left unchecked, these problems have the potential to overshadow the positive impacts this model currently has on some students. We urge state leaders and authorizers to address these problems head on instead of turning a blind eye to them.” The associations called for enrollment criteria for admission to online charters, caps on school enrollments and for regional charter authorizers with the expertise to oversee online charter schools.

Colin Miller, vice president of policy at the California Charter Schools Association, disagreed with the report’s recommendations but said that his association “shares some of the same concerns” about for-profit charters and is “open to middle ground” on restricting them.

AB 1084 would define online charters as schools in which “at least 80 percent of teaching and pupil interaction occurs via the Internet.” It would “prohibit a charter school from contracting with a for-profit entity for the provision of instructional services.” Bonilla said it was written this way to exclude the purchase of textbooks and curricular materials from for-profit companies.

But Eric Premack, executive director and founder of the Sacramento-based Charter Schools Development Center, said the bill raises “basic definitional issues” that Brown foreshadowed in his veto message last year.

“A lot of charters contract for special education services and for staff development. What do you mean by instructional services, and where do you draw the line?” he asked.

John Fensterwald covers education policy.

Grand Canyon Education, Inc. and K12, Inc. Head to Head Compare

Grand Canyon Education, Inc. versus K12, Inc. Head to Head Compare

This is a head to head comparison of Grand Canyon Education, Inc. (NASDAQ:LOPE) and K12, Inc. (NYSE:LRN) . We will compare the two companies on revenue growth, earnings, revenue per employee, operating margins, free cash flow and valuation. The head to head scorecard assigns 100 points in total.

Before we dive into the analysis, we will look at the stock returns for each company over the last three months, six months and the last year. The stock returns do not impact the head to head comparison scores which are focused on the fundamentals of each company, but ultimately stock returns are are still a critical piece to a full analysis.

Stock Returns
Symbol 3-Months 6-Months One-Year Fundamentals
LOPE -1.4% +7.9% -2.8%
LRN +12.8% +27.6% -14.3%

Grand Canyon Education, Inc. has a substantially higher fundamental rating then K12, Inc. which has an impact on the head-to-head comparison. The CML Star Rating is an objective, quantifiable measure of a company’s operating and financial condition. The rating is computed by measuring numerous elements of the company’s current financial data and their associated changes over time.

Now, let’s dive into the two companies to compare them.

➤ Income Statement

↪ LRN has larger revenue in the last year than LOPE. Raw revenue comps do not affect the head to head rating.

↪ Both LOPE and LRN show positive earnings over the last year with the edge to LOPE.

➤ Margins

↪LOPE generates $1.41 in revenue for every $1 of expense, while LRN generates an operating loss of $0.94 in revenue per $1 of expense.

LRN generates $0.06 in levered free cash flow for every $1 of revenue, while LOPE generates a cash flow loss of $-0.00 per $1 of revenue.

➤ Growth

↪ Both companies are growing revenue. LOPE is growing revenue massively faster than LRN.

↪ For every $1 in revenue, the stock market prices in $2.82 in market cap for LOPE and $0.51 in market cap for LRN.

Grand Canyon Education, Inc. (NASDAQ:LOPE) defeats K12, Inc. (NYSE:LRN) : 84 to 16

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Crumbling Foundations 7

Don’t fool Idaho, either


By Bill Cope

“The more desperate parents can be convinced that the public system is beyond salvation, the better positioned education-for-profit interests are.”

—from “Crumbling Foundations 1,” Feb. 16, 2011

If quoting myself from five years ago seems self-indulgent, forgive me. But after running this series through seven installments from 2011 to March 3, 2016, I’ve never found anything else said that nails more succinctly what I, and others, believe the J.A. and Kathryn Albertson Foundation is up to.

That quote is exactly what the foundation’s meddling in the politics of public education is about: Parents, who understandably want the best future for their children, are being sold the false and frightening notion that if they don’t allow politicians to direct more and more public monies dedicated to education into for-profit ventures, their kids will suffer the consequences.

I resurrected this series in response to the foundation’s latest spiel—its ubiquitous ad featuring a kid getting on the bus at school, but not showing up as expected at home.

If I believed the sole motive behind that ad was to promote the best solutions to problems no one can honestly deny are plaguing modern education, I wouldn’t be as outraged at the disingenuousness of it. But for at least 15 years, key players in the Albertson Foundation have been investing—heavily—in the very thing they are so heavily promoting. This has to do with much more than our nation’s education policies. If you’ve ever wondered how the very rich just keep getting richer—how the rush of wealth to the “1 percent” never seems to even slow down, let alone stop—the influence that Foundation leaders have exerted on Idaho politics with ample complicity from Idaho politicians can be considered a manual on how, with enough money priming the right pumps, one can gain access to that great aquifer of steady revenue: the American taxpayer.

Following is a timeline assembled largely by Grove Koger, a lifelong friend and a very picky researcher. Further information came from an Associated Press probe into the relationships between the foundation, at least one member of the corporate for-profit education community and ex-Superintendent of Public Instruction Tom Luna’s push to radically reform Idaho’s schools.

There is nothing new about any of this. Most of it relates to the decade leading to Luna’s reform scheme. But as the Albertson Foundation has shown, it refuses to give up on making that scheme a reality, so must we keep reminding ourselves why we rejected it so decisively.

• Together, Joseph Scott—the grandson of Joe and Kathryn Albertson and heir to much of their fortune—and his business partner, Thomas Wilford, founded Alscott Inc., an investment arm of the Albertson-Scott family. Wilford was installed as president of the business concern in 1993. From 1995 to 2003, he was also the president of the Albertson Foundation. Even now, Alscott and the foundation share the same address and, at least until 2011, the same phone number.

• In 2002, the Idaho Virtual Academy was created with administrative direction and educational material provided by K12, Inc., the Virginia-based source of online education founded three years earlier by Bill Bennett, former secretary of education. Bennett had contributed $1,000 to Tom Luna’s first, and failed, 2002 campaign.

That same year, while still the president of the Albertson Foundation, Wilford was appointed a seat on the K12, Inc., board of directors. The next year, he was named CEO of the foundation.

• By 2005, the foundation was handing out grants to charter schools, including the Idaho Virtual Academy, which has grown to be the state’s largest online public charter school. Its curriculum was (and is) provided in full by K12. Wilford contributed to Luna’s 2006 campaign, as did out-of-state for-profit education concerns, including K12, whose campaign contributions ran into several thousands of dollars. Wilford’s compensation as a K12 director soared from less than $500 in 2007 to $107,114 in 2010.

• In 2011, immediately after re-election, Luna introduced his reforms, relying heavily on charter schools and for-profit curriculum providers for solutions to Idaho’s public education woes—woes that were largely the result of inadequate funding from the same state leaders who supported Luna. Even while the foundation was running expensive ads in newspapers across Idaho hawking those reforms, Alscott Inc. held 826,000 shares in K12, Inc. By then, Idaho public monies going to K12 coffers was running into the tens of millions of dollars a year. Wrote Joe Miller of the AP: “All the while [Joseph] Scott’s family’s education foundation was actively promoting Idaho’s fledgling online education programs—something Luna has made a centerpiece of his reforms.” The siphoning of those public monies continues to this day.

I have never claimed there isn’t room for improvement in our public schools. But the two most horrifying and damaging blunders Idaho could make is handing over our public schools and/or our public lands to private interests. Once we go there on either, we’ll never get them back.

Walker County Public Schools Turns Around Student Achievement with Personalized Learning from Fuel Education™

HERNDON, Va., Feb. 8, 2016 /PRNewswire-USNewswire/ — In 2011, Walker County Public Schools in Jasper, Alabama, had many obstacles standing in its way for both educators and students, including high percentages of students who qualified for free and reduced lunch, high dropout rates, and low graduation rates. Seeing this as an opportunity to better support students academically, Walker County Public Schools partnered with Fuel Education™ (FuelEd™) to provide students with access to the Anywhere Learning System for a more personalized learning experience.

“For some of our students, this has been a life-changing experience,” said Connie Shubert, Director of Federal Programs at Walker County Public Schools. “Some of them would not have been able to finish high school, and now they have a diploma and a chance at employment and a better life.”

FuelEd’s Anywhere Learning System is digital learning courseware for students in grades 1-12 with pre-tests that provide customized learning paths based on those results for struggling students who need remediation, as well as for advanced learners who need accelerated coursework. Walker County Public Schools uses the Anywhere Learning System in a variety of online and blended models across the district, including with younger students in blended learning centers, for credit recovery and grade repair with older students, and to continue instruction if a teacher is out for the day. In addition, the system is central to the district’s alterative school program, its summer school program, and its two at-risk and credit-deficient programs known as the Hope Academy and the Twilight Knight School.

Mary Slaughter, coordinator of assessment and accountability and director of guidance and counseling for Walker County Public Schools, said, “One of the best things is the Anywhere Learning System program offers flexibility and gives students choices; they don’t all fit in the same box.”

Since it started using the Anywhere Learning System, the district’s graduation rate has risen from 73 percent to 87 percent and the dropout rate has dropped from 14 percent to 3 percent. The district has also seen significant improvement in student attendance, grades, and the number of students being promoted to the next grade.

“The Anywhere Learning System empowers students to take charge of their education,” said Gregg Levin, General Manager of Fuel Education. “The learn-at-your-own-pace style of instruction helps struggling students catch up or recover credits and also provides gifted students with more content on a topic of their choice. Walker County Public Schools’ multifaceted implementation of FuelEd’s system is helping students succeed.”

The Anywhere Learning System has more than 160 courses, 5,600 lessons, 200,000 content pages, and 130,000 test items that are Common Core- and state objective-aligned. The content is presented to students using sequenced direct-instruction aids such as study guides, quizzes, mastery tests, and essays. Its built-in assessment and reporting tools help track and analyze all aspects of individual and class performance in order to benchmark progress and refine curriculum plans.

For more information about how Walker County Public Schools used the Anywhere Learning System for increased student achievement, read the case study here.

About Fuel Education
Fuel Education™ partners with school districts to fuel personalized learning and transform the education experience inside and outside the classroom. The company provides innovative solutions for pre-K through 12th grade that empower districts to implement successful online and blended learning programs. Its open, easy-to-use Personalized Learning Platform, PEAK™, enables teachers to customize courses using their own content, FuelEd courses and titles, third-party content, and open educational resources. Fuel Education offers the industry’s largest catalog of digital curriculum, certified instruction, professional development, and educational services. FuelEd has helped 2,000 school districts to improve student outcomes and better serve diverse student populations. To learn more, visit getfueled.com and Twitter.

©2016 Fuel Education LLC. All rights reserved. Fuel Education and FuelEd are trademarks of Fuel Education LLC or its affiliates. All other trademarks are the property of their respective owners.

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SOURCE Fuel Education LLC

Published February 8, 2016
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Craig Barrett Makes $190,000 As a K12 Inc. Board Member

Posted

By David Safier

on at 2:30 PM

click to enlarge

craig-barrett_1.jpg

Over the years, I’ve written many posts about the shoddy corporate practices and poor student performance at schools run by K12 Inc., the for-profit, publicly traded online education corporation (Its Arizona charter school, Arizona Virtual Academy, has 4,600 students sitting behind their computers at home, if, that is, they actually take the time and effort to log in and do the work). I wrote my most recent post about the corporations’s sinking stock value a few weeks ago. And I’ve written a few times that Arizona’s Craig Barrett sits on K12 Inc.’s Board of Directors. But this is the first time I’ve written about his compensation. For the fiscal year 2015, Barrett received $190,000 from the corporation. Barrett is a very, very busy man with his fingers in a whole lot of pies. You can be certain he didn’t put in 40 hour weeks to earn his Board pay.

Why, you may ask, should we care about Barrett’s involvement in K12 Inc.? The answer is, Barrett is a powerful voice in Arizona education, advocating for what he says are necessary reforms to improve our schools. He’s not shy when it comes to talking about his connections and accomplishments. For instance, he’s happy to announce that he’s President and Chairman of BASIS Schools, Inc., the for-profit Education Management Organization that runs the chain of BASIS schools. But so far as I know, he never talks about his connection to the shoddy, failing K12 Inc. I’ve looked hard on the internet, read his op eds, listened to some of his interviews and speeches. When it comes to K12 Inc. — nothing but crickets. A man as proud of his accomplishments as Barrett should be more open about this aspect of his educational life, and more forthcoming about what he, as a board member, is doing to improve the corporate and educational culture at K12 Inc.

Craig Barrett’s list of connections and accomplishments is vast. He’s the retired CEO of Intel, and he’s worth hundreds of millions of dollars. As I mentioned earlier, he’s President and Chairman of BASIS Schools Inc. He’s also a board member of Achieve, Inc., which was instrumental in creating and promoting the Common Core standards, as well as an influential member of any number of education-related organizations. He travels around the world promoting STEM education (Science, Technology, Engineering, Mathematics), and he’s very outspoken about what he thinks is wrong with Arizona education and what should be done to fix it. His ideas fall squarely in the privatization/”education reform” camp. During Jan Brewer’s governorship, he chaired her Arizona Ready Education Council which worked to steer the state’s education priorities, most of which are being carried forward by Gov. Ducey’s Classrooms First Initiative Council. It’s fair to say he’s the most powerful unelected individual in Arizona education.

So if he sees himself a good-education advocate, especially an outspoken one who touts the successes of BASIS schools as a model for other schools, he should feel a duty to explain the way his $190,000 a year position on the K12 Inc. board is part of his commitment to improving education in Arizona and nationwide. Maybe there’s more value in the corporation’s online school model, which has been so regularly and roundly criticized, even from people within the “education reform” movement, than we know. Maybe he’s working inside the corporation to improve its operations and education delivery system. A man as well spoken as Barrett, a man who writes as well as Barrett, a man who can command a public forum as easily as Barrett, should really make an effort to explain this questionable aspect of his educational involvement.

BASIS BOARD MEMBER Bonus News:  How much does Craig Barrett make as President and Chairman of BASIS Schools Inc.? I don’t know, because it isn’t a matter of public record. BASIS Schools Inc. is a for-profit Education Management Organization, so, though nearly all of its income is taxpayer money which the state gives to its charter schools, once the money that flows from the state budget to charter schools is sent upstairs and hidden behind a for-profit pay wall, it disappears from view. We don’t know if Barrett and other board members are paid, and if so, how much. We have no idea how much money BASIS founders Michael and Olga Block make. We used to know back when BASIS was entirely nonprofit and the Blocks had to report their salaries on the nonprofit’s publicly available 990 tax forms, but no more.

But it’s interesting to see who sits on the board of BASIS Schools, Inc. Of course, there’s Craig Barrett, a man whose political and educational priorities lean conservative. And there’s co-founder Michael Block, who has worked as a consultant for ALEC (the American Legislative Exchange Council), an organization whose main mission is to create conservative legislation which can become state law across the country. Also sitting on the seven member board is Clint Bolick, whom Gov. Ducey just appointed to the Arizona Supreme Court. Bolick is currently the head of the Goldwater Institute’s constitutional litigation team. Another board member, Terry Sarvas, is a member of the Goldwater Institute, and yet another, Steve Twist, is a founder of the Goldwater Institute.

BASIS’s conservative credentials run wide and deep — which is fine, of course, perfectly acceptable, but well worth noting.

Site Note: This is a very well written story written by an ex-Insight of Oregon teacher. The sad thing is, it’s not even an unusual story. Similar stories can be found written by ex-teachers from Colorado too.

15 Months in Virtual Charter Hell: A Teacher’s Tale

Guest post by Darcy Bedortha.

In late August, 2012, I took a job in a school that is part of the largest virtual charter school chain in the nation. While I had misgivings about the nature of the school, I thought perhaps if I were diligent, I could serve my students well.  In November 2013 I decided I could no longer continue as a teacher. This is my story.

Some Background on K12 Inc.

K12 Inc., the virtual-education company, was founded in 1999 by the one-time “junk bond king” Michael Milken and the hedge fund banker Ronald Packard. The company’s original board chairman was William J. Bennett, who had been the U.S. Secretary of Education under President Ronald Reagan. (Bennett resigned from his position with K12 Inc. in 2005 after sparking controversy by stating that the U.S. crime rate would go down if more African-American babies were aborted.)

As a private company founded by financiers, K12 Inc. is highly profit-driven. Though its stock price has apparently taken a hit recently, there is little doubt that K12 Inc. has been quite successful in bringing in revenue–even as regular public schools have faced dire financial straits. According to the Center for Media and Democracy’s PR Watch, Packard, who is the current CEO, earned $19 million in compensation from 2009-2013. In 2013 alone, as Chicago closed 50 of its public schools and Philadelphia closed 23 more, K12 Inc. brought in a whopping $730.8 million in taxpayer dollars from its managed public schools, and its top executives saw their compensation skyrocket by 96 percent.

My Life as a Virtual Teacher

I became a teacher because I am an advocate for youth and social justice. However, this purpose was hard to fulfill working in a K12 Inc. school. With the kind of technology, systems and process management needed to keep the enrollment machine running (and the machine is priority), there is never much time to actually teach. In my former school, each class met for 30 minutes in an interactive-blackboard setting one day each week. Fewer than 10 percent of students actually attended these “classes.” Other than that time and any one-on-one sessions a teacher and student might set up (which, in my experience, almost never happened), there is no room for direct instruction.

Given the extensive needs of the students, this set up does not serve them well. Most of my contact with students was by email, through which I answered questions about everything from login issues and technology glitches to clarifying of assignments, and even that communication was only accessed by a very small percentage of students.

In addition, because students continuously enroll, no one was on the same assignment at the same time. I taught high school English. In a given day in mid-November I would grade introductory assignments, diagnostic essays and end-of-semester projects, and everything in between, for each course (this month I had 30 separate courses). I found it to be impossible to meet the learning needs of my students in that situation.

For most of last year I was Lead Teacher at the school, which required me to attend national staff meetings each week. At first the marketing focus of the conversations turned my stomach, and then it made me furious. In my experience, the conversation was never about how our students were struggling, how we could support those who were trying to learn the English Language, how we could support those who were homeless or how we could support those with special needs. It was never about how we could support our teachers. It seemed to me like the focus was often about enrollment, about data, about numbers of students who had not taken the proper number of tests, about ranking schools and ranking teachers. And there was marketing: how to get more children enrolled, how to reach more families, how to be sure they were pre-registered for next year, how to get Facebook pages and other marketing information “pushed out” to students.

The state-level staff meetings were not much better. Teachers were occasionally bullied and disrespected by the head administrator. Threatening teachers who had been unsuccessful at reaching students, he once yelled “I own your phone and I can see if you’re making calls!” (K12 Inc. does own the phones its teachers use, as well as the laptops and office equipment for teachers and students). During one meeting, in effort to force students to take yet another standardized test, it was suggested that we lock students out of their classes until they completed the tests. I urged them not to lock the curriculum. I had spent days each week trying to keep my seniors engaged and working in their classes, they were hanging on by their fingertips, and I knew that if pushed, they would simply give up.

Teachers who work for K12 Inc. are not well compensated for all their scrambling. At my former school, teachers are paid based on the number of students on their rosters. With 225 students they are still part-time (at .75 FTE), for which the pay is $31,500 a year. With 226 students they become full time employees, and will then be paid $42,000. Some full-time teachers now carry loads of well over 300 students. Even considering other expenses (but noting that these schools have no building or transportation costs), it is clear to me that K12 is generating considerable profits from the student/teacher ratio and compensation scheme.

My first month of teaching exhausted me, and there was never a moment in 15 months to catch my breath (many of us taught summer school, with no extra compensation, per employment agreement). Teachers are responsible for setting up courses, due dates, course pathways, etc. in connection to an extensive and ever-changing digital curriculum which is fraught with technical glitches and system-level errors. Teachers are also required to be available to students during the day, late into the evening and on weekends. In addition, they must contribute to “special projects”.

Courses and students are added daily, so there is continuous juggling, all happening during the first month of school (and beyond) while students (and teachers) are trying to learn how the system works. Granted, the first months of school are difficult for any school, but teachers at my school were putting in 40, 50, and 60 hour weeks in September 2012 while being paid only for the students on their roster, which for me hovered around 100 by the end of the first month. I think my first two-week paycheck, given the 75 students on my roster in the beginning, was about $300. Students are enrolled and drop out daily throughout the year (enrollment pauses only in December and May-June) so numbers change constantly and part-time teachers are never sure of their income.

Serving Disadvantaged Students Poorly

I believe K12 Inc. targets poor communities and economically struggling regions; they are easily influenced because they are desperately seeking alternatives to devastatingly under-funded schools. These financially strapped schools are being further bled by the exodus of students who are lured by what I now see are empty promises of marketing experts at K12 Inc. It is a vicious cycle in which, as far as I can see, no one but the corporate profiteers are winning, and that is no wonder to me: K12 Inc. has worked closely with the American Legislative Exchange Council, which has lobbied extensively for draft legislation to expand virtual education in 39 states or territories, potentially further crippling the financial status of public schools whose funds they siphon.

Luis Huerta of NEPC and Teachers College, Columbia University cites K12 Inc.’s explicit strategy  of targeting the least-supported population of students. He states that the corporation has an established practice of going after students who are “at risk” because of their tendency to not engage in school or expect much, if anything, from their educational experience, thereby creating a greater profit margin for K12 Inc. If a student is not active in school or demanding a quality education, he or she does not take as much of a teacher’s time; fewer questions are asked, less work needs reviewing and less interaction is required. By targeting these students for enrollment, K12 Inc. is able to push a higher student to teacher ratio: fewer teachers equals less expense, more students equals more income, fewer expenses in conjunction with greater income equals greater profits. This is a core issue with for-profit education management organizations.

The majority of students at the school are the kinds of kids whose histories and current realities cause concerned adults to keep eyes open for signs of trauma, those that haunt the dreams of educators and social workers. My students were survivors – of suicide attempts, of bullying, of abuse, of neglect, of the attempted suicides of siblings or best-friends or boyfriends. Some of them battle addictions and destructive habits; some self-harm, isolate themselves, or even run away.

I was an English teacher, so my students would write. They wrote of pain and fear and of not fitting in. They were the kinds of young people who desperately needed to have the protective circle of a community watching over them. They needed one healthy person to smile at them and recognize them by name every day, to say “I’m glad you’re here!”  Many of my former students do not have that.

The last thing these young people needed, I came to realize during my time with K12 Inc., was to be isolated in front of a computer screen.  A week or two or three would often go by without my getting a word from a student. They didn’t answer their email, they didn’t answer their phones. Often their phones were disconnected. Their families were disconnected. My students also moved a lot. During my first year at the school I spent days on the phone trying to track students down. This year I struggled to not simply give up under the weight of it all.

In the fall of 2013, 42 percent of our high school students were deemed “economically disadvantaged.” I had a number of students who were not native English speakers. I cannot wrap my head around how to serve a student who is unable to read or comprehend the language that the virtual curriculum is written in, let alone learn the technology (when it is functioning) without sitting beside them in the same space. Many of my non-native speakers had parents who did not speak English at all. These students often struggled for a very short time, and then I never saw their work again. They dropped out, moved on.

The majority of the students at the school were lacking credits needed for graduation. Most of them could not afford another failure, not in terms of credits and not in terms of emotional well-being, yet, as I wrote this in early December, nearly 80 percent of our students were failing their classes.  At that time there were 303 students (12 percent of the school) enrolled in special education programs – and 259 of them were failing while 17 had no grade at all. Eighty-two percent of the 9th graders were failing. This kind of failure is in no way limited to this school; it is system-wide, reigning throughout the virtual-school world, explicitly true for K12, Inc. and its national network of online schools.

According to a July 2012 report published by the NEPC, a nonprofit research organization that is skeptical of privatization initiatives in public education, only 27.7 percent of K12, Inc. schools met the Annual Yearly Progress goals, as compared to 52 percent of brick and mortar public schools (Miron & Urschel, 2012). Similarly, the same study calls attention to the fact that only 37.6 percent of students at full-time virtual schools graduate on time, as compared to the national average of 79.4 percent for all public high school students. A substantial number of my students transferred in from other virtual schools, such as Connections Academy. These students were markedly transient, and did not find success with K12 Inc. either.

In addition, CEO Ronald Packard was named in a 2012 class action complaint citing his alleged false statements regarding student performance and K12, Inc.’s “aggressive tactics” to recruit and enroll students in effort to cover up the 40-60 percent turnover rate (the parties reached a tentative $6.75 million settlement agreement in March 2013).

I can’t say I’m surprised by any of this. Earlier last fall, due to the sudden need for a colleague to take leave I was handed his student load on top of my own. For a month I had 476 students on my rosters, in 30 different classes. In my classes, my students were writing narratives, argumentative and research papers and poetry – all of which I was committed to reading. I had students who struggled to find their way through the course pages to the assignment they wish to work on, and in their frustration they often emailed for direction. I had students who were struggling to find their way through life. I began to write my story during the third week of November and at that point, I still had students beginning their first day, with the expectation to finish a semester’s work by January 24th.

Each of these situations and many others required individual attention. How does anyone offer anything close to personal attention for over three-hundred students, most of whom you never see? Practices such as excusing (eliminating) assignments were the norm at the school. K12 Inc. calls it a “proficiency model” but it amounts to an easy route to course completion. Even the students who were more or less on pace were not learning deeply; they were often merely filling out digital worksheets as quickly as they could. The most motivated of my students regularly finished more than a dozen assignments in a day.  What kind of depth of learning could that offer? That kind of workload for K12 teachers created fertile ground for practices like minimizing curriculum or sending essays to India to be graded.

Last year I had a student who never showed up to class, never turned work in, skimmed by on gaming the system with a phone call every few weeks, just enough to keep from being dropped from the rosters. She called me three days after my final grades were submitted in June, desperate to find a way to graduate. I apologized, said my grades had been submitted, and offered information for the summer school we were holding. A week or so later, when I arrived for graduation an administrator pulled me aside to tell me that this student had passed “by the proficiency method” and would be graduating. Our graduation rate was so low that this was not a surprise to me, not after the year I had spent working in this system. I was learning how things worked. Similar things have happened elsewhere. In Tennessee an email was discovered at a K12, Inc. school directing teachers to delete poor grades.

The July 2012 NEPC report concludes that virtual schools are not adequately meeting the educational needs of students. “Children who enroll in a K12 Inc. cyberschool, who receive full-time instruction in front of a computer instead of in a classroom with a live teacher and other students, are more likely to fall behind in reading and math,” the authors state “These children are also more likely to move between schools or leave school altogether – and the cyberschool is less likely to meet federal education standards.”

I became a teacher because I am an advocate for youth. My wish is to empower them to find their voices, to use them respectfully and effectively to work for justice in this world. I only scratched the surface of building relationships with my students last year. This year it was even more difficult.

As I reflect, I realize that the inability to dig into their realities and connect provided me a level of protection.

As I begin telling my story to a national audience, I face considerable dilemmas. How do I call out the corporations for the wrongful actions they are taking, for the massive deception being perpetrated and the money being siphoned from public schools without real people who are trying to do good work being hit by the fallout? How do I highlight the research that makes clear the failure of virtual schools without throwing talented teachers who are doing their best under the bus? Teachers I worked with are afraid to speak out, they are afraid to challenge or even question the administration or the system. I see the same fear dominant in the narrative across the country, in all walks of education. It is a justifiable fear; work is hard to come by, in part because of the very online programs I am rallying against. It is not hard to see that as I speak out, I might lose friends and I will jeopardize my own potential to be hired elsewhere as a public school teacher. It is a lonely place to stand, and a difficult decision to make.

I struggled with the decision to leave my students, and if I had better identified their individual challenges and truly gotten to know them it would have been doubly difficult. I continue to remind myself that I left to save my own health, that if my health had failed I would not be able to continue to advocate for youth. I would not be here for my own sons and I would not be able to hold my grandchild. The internal agony of compromised values and the endless dance of ethical dilemmas spinning through my sleepless nights finally got the better of me, and in facing a choice between financial crisis and health crisis, I gave my notice. I am unleashed, I am educated and I am fighting for the students I left behind. As an advocate I have chosen to walk my talk. I will speak for my students until they can fill my shoes, and I have faith that they will.

Darcy Bedortha, MS, MA

High School Teacher Student, Antioch University PhD in Leadership and Change

Oregon Team, Institute for Democratic Education in America

What do you think of Darcy Bedortha’s story? What should be done about virtual schools that operate in this fashion?

Are Investors Becoming Bullish on K12, Inc (LRN) Stock Now?September 22, 2015

by Zacks Equity Research
  Published on September 22, 2015 |

If you are looking for a stock in the Schools industry, K12, Inc. ( Snapshot Report) could be one to watch closely. Right now the company has a Zacks Rank #2 (Buy) and it has been seeing rising earnings estimate revisions as of late.

In fact, the full year consensus estimate has risen from $0.37/share to $0.38/share in the past 60 days, while one estimate has gone higher for the time frame and none have gone lower. If that wasn’t enough, LRN also has Style Score grades of ‘A’ on both growth and value fronts so it could be worth considering from that perspective too.

But what is the Crowd saying about this stock?

Many times, broad investor perception of a security can have a large bearing on a stock’s outlook. And thanks to social media sites like Twitter, we now have an easy way to see what the masses are thinking about stocks and how they might perform in the future.

According to MarketProphit.com, a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for LRN is 0.21, which shows social media momentum trending upward for this stock.

Generally speaking, moving averages of Crowd Sentiment Z-Scores with values above 0.2 is significant, so the rating for LRN today is indicative of broad positive Crowd opinion towards this stock in the near term. And when you add in the positive earnings estimate revisions to this story it definitely suggests that K12, Inc is a stock to put on your radar right now.

And for more data and insights on trending sentiment and buzz in social media for stocks you care about, make sure to check out marketprophit.com and their Z-Score system.