How can we improve the performance and accountability of Pennsylvania cyber charters?

If it sometimes seems like “tuition-free” cyber charter ads are running non-stop, consider that in just one year your tax dollars paid for 19,298 local TV commercials for Agora Cyber Charter, just one of Pennsylvania’s 13 cyber charters.  And far from being tuition-free, total cyber tuition paid by Pennsylvania taxpayers from 500 school districts for 2013, 2014 and 2015 was $393.5 million, $398.8 million and $436.1 million respectively.

Those commercials were very effective, especially if you were an executive at K12, Inc., a for-profit company contracted to manage the cyberschool.  According to Agora’s 2013 IRS filing, it paid $69.5 million that year to K12, Inc.  According to Morningstar, total executive compensation at K12 in 2013 was $21.37 million.

Not so effective for kids or taxpayers, though.  What the ads don’t tell you is that they are paid for using your school tax dollars instead of those funds being spent in classrooms, and that academic performance at every one of Pennsylvania’s cyber charters has been consistently dismal.  While the PA Dept. of Education considers a score of 70 to be passing, Agora’s PA School Performance Profile (SPP) scores for 2013, 2014 and 2015 were 48.3, 42.4 and 46.4.

In fact, not one of Pennsylvania’s cyber charters has achieved a passing SPP score of 70 in any of the three years that the SPP has been in effect.  Additionally, most PA cybers never made adequate yearly progress during all the years (2005-2012) that the federal No Child Left Behind law was in effect.  While cybers may be a great fit for some kids, overall they have been an enormous waste of taxpayer dollars drawn from all 500 school districts without any authorization by those districts.  Unlike brick and mortar charter schools which must be authorized by their local school district, cyber charters were authorized, and are ostensibly overseen by the state Dept. of Education.

Even if the cyber’s SPP score is 50 points less than a school district school, locally elected school boards have virtually no discretion when it comes to paying cyber tuition bills.  If they don’t pay the cyber school the Department of Education will draft their account.

These poor results are reflected in national studies.  Stanford University reported that online schools have an “overwhelming negative impact,” showing severe shortfalls in reading and math achievement.  The shortfall for most cyber students, they said, was equal to losing 72 days of learning in reading and 180 days in math during the typical 180-day school year.  In math it is as if they did not go to school at all.  The National Alliance for Public Charter Schools, a charter advocacy group based in Washington, said the findings were so troubling that the report should be “a call to action for authorizers and policymakers.”

What can Pennsylvania policymakers do to improve the performance and accountability of our cyber charters?  Here are some possibilities for our legislators to consider as they return from summer break.

Consider cyber charter reform separately from brick and mortar charter school reform legislation.  Charter reform has proven to be a very tough nut to crack.  There seems to be increasing agreement that cyber education as presently configured is not working for most of our students or our taxpayers.

Consider closing some of the most persistently underperforming cybers with scores in the 20s, 30s and 40s and have their students transfer to one of the better performing schools.  One of the tenets of school choice is supposed to be that failing schools would be closed.

Consider funding cyber education via a separate dedicated budget line instead of tuition payments from school districts.  These schools are already authorized by the state department of ed, not by school boards.

Consider providing PDE with the staffing and resources needed to effectively oversee the cyber charters that they have authorized.

Consider the recommendations of the PA Auditor General’s June 2012 special report on Charter and Cyber Charter Education Funding Reform.

Consider the recommendations of the PA Special Education Funding Commission’s December 2013 report that calls for using three funding categories based upon the intensity of services required to meet special education students’ needs.

In 2014-15 cyber charters reportedly received over $100 million more in special education tuition payments than they actually spent on special education services.

Consider requiring all ads for cyber charters to clearly state that the ads are paid for using school tax dollars and to clearly state the cyber charter’s SPP score and the fact that a score of 70 is considered passing.

Consider creating a centralized marketing website at PDE instead of having cyber charters spend tax dollars on ads.  This site would link to the websites for each of the state’s cyber schools.

A blog posting entitled “Can-policymakers-fix-what-ails-online-charter-schools? by Dara Zeehandelaar and Michael J. Petrilli recommended three strategies for improving online schools:

(1) Consider adopting performance-based funding for e-schools.  When students complete courses successfully and demonstrate that they have mastered the expected competencies, cybers schools would get paid. This creates incentives for cybers to focus on what matters most—academic progress—while tempering their appetite for enrollment growth and the dollars tied to it. It would also encourage them to recruit students likely to succeed in an online environment.

(2) Policy makers should seek ways to improve the fit between students and e-schools. It seems that students selecting cyber schools may be those least likely to succeed in a school format that requires independent learning, self-motivation, and self-regulation.  Lawmakers could explore rules that exempt cyber schools from policies requiring all charters, virtual ones included, to accept every student who applies and instead allow cybers to operate more like magnet schools with admissions procedures and priorities.

(3) Policy makers should support online course choice, so that students interested in web-based learning can avail themselves of online options without enrolling full-time in a cyber charter. This might include encouraging students to use their own school districts’ programs if their school district or intermediate unit offers cyber education.

Cyber charters were intended to be a better alternative to traditional schools that were deemed as failing.  Over 10 years later that has consistently proven not to be the case.  We have spent over $1 billion in tax dollars on cyber tuition in Pennsylvania in just the past three years.  Our students and taxpayers deserve better.

Lawrence A. Feinberg of Ardmore is serving in his 17th year as a school director in Haverford Township.  He is the founder and a co-chairman of the Keystone State Education Coalition.

Penn Foster Names Heather McAllister as General Counsel and Corporate Secretary

Share Article

Penn Foster named Heather McAllister general counsel and corporate secretary, with overall responsibility for Penn Foster’s legal, compliance and governance matters. McAllister is now also a member of the executive management team that sets strategic direction for the company.

Penn Foster seeks to set the standard for compliance in the industry; Heather has been successful at building and administering robust compliance and governance programs, creating corporate processes and procedures, and implementing best practices. to

Scranton, PA (PRWEB)
April 05, 2016

Penn Foster, a leader in career-focused online and blended learning solutions for today’s workforce, today named Heather McAllister as general counsel and corporate secretary, with overall responsibility for Penn Foster’s legal, compliance and governance matters.

McAllister is now also a member of the executive management team that sets strategic direction for the company. The announcement was made by Frank Britt, president and CEO, Penn Foster, to whom McAllister reports.

Most recently, McAllister was vice president, legal and compliance of K12 Inc. (LRN) where she counseled the $900 million education technology company on litigation, transaction governance and regulatory matters that confront a high-growth business in a highly regulated industry. McAllister also served as chair of K12’s Legal Compliance and Ethics Committee and as chief compliance officer for the school’s management business.

Prior to K12, Heather served as counsel for the Susan G. Komen Foundation and worked for law firms based in Washington D.C. and New York City, respectively.

“Heather McAllister has a strong and proven record in effectively promoting strategic business goals in a variety of sectors, including education, with deep expertise in high school,” said Britt. “Penn Foster seeks to set the standard for compliance in the industry, and Heather has been successful at building and administering robust compliance and governance programs, creating corporate processes and procedures, and implementing best practices to create an ethical and compliant culture focused on student value and outcomes.”

“I’m excited to join the Penn Foster team, and be part of an organization with a long history, committed to operating with the highest levels of compliance and delivering superior outcomes for our students,” said McAllister.

McAllister earned a J.D. from the University of Pittsburgh and a MBA from The George Washington University. She has been a frequent speaker on legal, compliance and governance issues at a variety of conferences and firms, and has lectured at Georgetown Law School.

About Penn Foster

Students, employers and partner organizations rely on Penn Foster to build the skills and knowledge to power the 21st century workforce. For over 125 years, Penn Foster has been dedicated to helping people lead more meaningful and productive lives and to improving social outcomes through education. Penn Foster provides career pathways for opportunity youth and adult learners through diverse and affordable online diploma, certificate and degree programs, offered via its high school, career school and college. With more than 30,000 graduates each year, Penn Foster’s online and blended learning programs are delivered in a self-paced, competency-based model wrapped by comprehensive academic, professional and personal support and coaching. For more information, visit

Peter Greene reports a shocking development (for operators of cyber-charters): Pennsylvania Governor Tom Wolf has said that he wants to reduce payments to cyber-charters, the online charter schools that are usually offered by for-profit corporations. Cyber-charters receive full state tuition for every student they enroll, and every dollar is subtracted from funding of local district schools that the student otherwise would have attended. Numerous studies have shown that the virtual schools have high attrition (as much as 50% a year), low test scores, and low graduation rates. But they are very profitable.


This is actually a shocking development for critics of virtual charters because their usual modus operandi is to sprinkle campaign contributions to key legislators and the governor, thus protecting their cash cow.


Greene writes:



Pennsylvania cyber charters are Very Sad, because the new governor of the state is threatening to end their long-standing party.



Years ago, a local departing superintendent offered a few words of advice. “If you want to get rich,” he said, “go start a cyber school.” He was not kidding. For the past decade-plus, running a Pennsylvania cyber charter has been as good as printing money. Despite their abysmal record of academic failure, Pennsylvania cybers rake in money hand over fist.



There’s no big secret to it– a cyber is paid the full per-capita home district cost of every student it enrolls. If it costs East Bucksawanna $10,500 per child to provide buildings and maintenance and infrastructure and resources and teachers and books and all the rest, then the Gotrox Cyber Acdemy gets that same $10,500, with which it provides the student with a computer (free!!) and access to a teacher or two (each of whom is carrying several hundreds of students).



It’s like running a dealership where every customer will pay the purchase price of their last brand new luxury automobile and in return, all you have to give them is some object with wheels.



This has been a point of contention in PA because every cent that goes into cyber coffers comes straight out of public school tax dollars. Every student that a cyber enrolls is a budget cut for public schools, and the cuts are vicious and deep and resulting in loss of programs, closing of schools, and furloughs of teachers. Taxpayers are complaining to public schools, “What the hell did you do with all that money I gave you,” and public schools reply, “That guy right over there [pointing at cyber charter] took it, and that guy right over there [pointing at legislator] says I have to let it happen.” People are getting pissed off. The baloney about how the money follows the child isn’t convincing, because people are now seeing that the child not only takes his own family’s money, but the tax dollars from all the neighbors on his street, too.



Cyber charters in PA have created whole new traditions. For instance, a cyber school may test a student to determine if the student has special needs. Why would they care? Perhaps because they get roughly $10K for regular students and $25K for students with special needs.



There’s also the tradition of enrollment day, on which guidance counselors and cyber schoolsters sit at their computers and toss students back and forth like hot potatoes on a reverse e-bay. Why? Well, there are two magic dates on the cyber calendar. After one certain date, the school gets to keep the money even if the kid leaves the cyber. After enrollment day, whoever still has the kid has to count that students test scores as their own.



Anyway. Governor Wolf has raised a fun question– how much does it actually cost to educate a cyber-student? Because shouldn’t it cost, you know, less? And if so, why should taxpayers pay more? No other public school (because, like all charters, cybers insist on calling themselves public schools) sets a budget that includes an extra couple of million just to feather the nest.



Just as a footnote, two operators of virtual charters are currently under indictment for the misappropriation of millions of dollars. Not like a principal or an assistant principal stealing petty cash. Big-time money. Millions.


The largest chain of virtual charters is K12, Inc. It was created by Michael Milken, noted non-educator, and his brother Lowell, also a non-educator. It is listed on the New York Stock Exchange.



via Diane Ravitch’s blog » K12 Inc.

Here is the weekly Fairtest report on new developments in the public’s efforts to roll back the testing frenzy that has been imposed on our nation’s children by Congress, the Bush administration, and the Obama administration:

Bob Schaeffer of Fairtest writes:

It’s only the middle of September but assessment reformers have already recorded an initial set of “wins” for the new school year: Pittsburgh significantly reduced district-mandated testing, and Florida suspended a controversial statewide reading exam. Building on successes of the recent past, escalating “enough is enough” pressure on federal, state and local policy-makers should produce many more victories in 2014-2015. For a list of questions to ask your district, check out the second item in this week’s collection of clips.

“Testing Reform Victories: The First Wave” — How Much Our Movement Has Already Accomplished

Key Questions to Ask Your District About School Testing

Connecticut Should Reduce Student Over-Testing

Florida Suspends a Controversial Test as Debate Widens Over School Testing

Another Florida School Board Blasts Testing Overkill

Lift Florida’s Test Obsession Burden

Floridians Stand Against Testing Excess is Long Overdue

Georgia Education Association Seeks Major Reduction in Testing

Kentucky Public Schools Under Siege by So-Called “Reformers”

Massachusetts Needs Less Testing, More Learning — A Model Letter to the Editor

Putting Minnesota Test Scores in Context

Too Much Testing in New Mexico Schools

New York Congressman Will File Bill to Cut Federally Mandated Testing in Half

New York May Slightly Relax Grad Testing Requirements

New Ohio School Report Cards Show Link Between Poverty and School Performance

Pittsburgh PA Elementary Schools To Reduce Testing Significantly

Fewer Exams Means More Hours for Learning

Parents, Teachers Applaud Pittsburgh’s Cutback in Testing

In Texas NEA President Calls for Testing Reform

Introduction to Yong Zhao’s New Book, “Fatal Attraction: America’s Suicidal Quest for Educational Excellence”

“Teach to the Test” Drives Teachers to Quit

How Young Is Too Young to be Inundated With Standardized Tests

Good Morning Mission Hill: A Way to Highlight Your Organization’s Work

National Merit Scholarships Continue to Misuse Tests Scores to Award College Aid

Another Large, Public University Adopts Test-Optional Admissions

Bob Schaeffer, Public Education Director

FairTest: National Center for Fair & Open Testing

office- (239) 395-6773 fax- (239) 395-6779

mobile- (239) 699-0468


via Diane Ravitch’s blog

Keystone State Education Coalition

Pennsylvania Education Policy Roundup for June 3, 2014:

In God We Trust? How about a bill that would require charter and cyber schools to post their PA School Performance Profile scores prominently in any advertising paid for with public tax dollars?

Blogger Rant:

At a recent school board meeting I voted against authorizing a payment to Agora Cyber Charter School. Why? During the NCLB regime, Agora never once made AYP; this year their PA School Performance Profile Score was 48.3 (scale of 100). In my district, our Middle School score was 94; our High School score was 96.4. Agora is run by K12, Inc., a for-profit company founded by convicted bond felon Michael Milken. K12 paid it’s CEO $13 million from 2009 through 2013 and spent our tax dollars on over 19,000 local TV commercials. I do not believe Agora should receive one cent of my neighbors’ tax dollars.

Instead of posting “In God We Trust”, how about a bill that would require charter and cyber schools to post their PA School Performance Profile scores prominently in any advertising paid for with public tax dollars?

via Diane Ravitch’s blog

« Pearson Wins Major Contract From Common-Core Testing Consortium | Main | American Institutes for Research Fights Pearson Common-Core Testing Award »

K12 Inc.'s Revenues Rise, Expansion Planned for Next Year

By Michele Molnar on May 5, 2014 5:48 PM | No comments



This page has been shared 26 times. View these Tweets.

K12 Inc., the largest for-profit provider of precollegiate online education, posted nearly 8 percent revenue growth in the third quarter, and is expecting to expand in the states it already operates in, said Nate Davis, K12 Inc.'s chairman and CEO, in a recent conference call announcing the company's third-quarter results.

The CEO of the Herndon, Va.-based company reported that the 8 percent jump in total revenues year-over-year amounted to $235 million for this quarter, and operating income increased 41 percent to $27.4 million for the quarter.

The third-quarter report received far less attention than the conference call in October 2013, when Davis announced that K12 enrolled 11,000 fewer students than it had anticipated for the 2013-14 school year.

This call had more news that the company is doing better financially, a fact that Trace Urdan, a senior analyst for Wells Fargo Securities in San Francisco, highlighted in his own “Equity Research” report about the company's stock, indicating that K12 is “on track for a strong fall,” and predicting that the stock will outperform the market.

“Enrollment, revenue-per-student and expense management in the company's core managed school business was strong,” Urdan wrote, while noting the competitive market facing the online education industry. Using K12's strategy of a shared technology platform is also a good sign for growth, he indicated.

Davis talked about K12's prospects in various states, saying growth will occur in new states but not “at the pace we've seen in previous years,” referring to his company's ongoing discussions with Illinois, New Jersey, and North Carolina. He said that he anticipated no imminent announcements of K12 schools opening in those states.

A new K12-managed Insight School is tentatively scheduled to open in Michigan this fall, with a focus on at-risk students from across the state. The first-year capacity of the school is 2,500 students. Within three years, the school could accommodate up to 10,000 students, Davis said.

Pennsylvania recently rejected a number of cyber-charters, including an application from Insight PA, a school that would have been managed by K12, on grounds that the board was not familiar enough with the oversight of a school, and that K12 would ultimately control the operation.

Career technical education is an area K12 has in its sights for growth. One example is the Iowa Virtual Academies, which recently announced that it is collaborating with the Northeast Iowa Community College in the Association of Business and Industry to provide an advanced manufacturing program for high school students. The three-year blended program will incorporate online instruction and on-site workshops, involving local businesses to ensure that the skills taught match the needs of employers.

“Creating a direct path to either a job or a technical college program right after graduation is just one of the many ways we will look to create pathways that are relevant to students and attract them to K12-managed public schools,” Davis said in the call.

In January, K12 had announced plans for Ron Packard, its founder and departing CEO, to launch a joint venture with an investor group led by Safanad Limited, a global principal investment house based in New York and Dubai. That deal is off, with Davis saying it was too complex. Several international properties owned by K12 would have been part of the transaction.

“In general, investors would much prefer to see them sell the assets and shut down the projects outright, terminating the associated losses,” Urdan wrote in an email response to a question about the move. “While there may be some opportunity cost associated with not expanding internationally today, most investors believe K12's dominant position in the U.S. market will allow for this at a later date and that at present it represents a distraction.”

My colleague, Sean Cavanagh, recently reported on an investor group's lawsuit against K12 and Packard. The federal lawsuit accuses the company of misleading investors by putting forward overly positive public statements during much of last year, only later to reveal that it had missed key operational and financial targets. It also claimed that Packard sold 43 percent of his personally held common stock for $6.4 million in that period, before the company revealed disappointing results. K12 denied misleading investors, and Packard, through a company spokesman, said he has been forthright in his transactions.

We also covered the decision by the National Collegiate Athletic Association (NCAA) to reject coursework completed by athletes in 24 K12 schools when students from those schools are applying to Division I or Division II colleges or universities, effective in 2014-15.

In the conference call, Tim Murray, president and COO of K12, said the company is “working very, very hard with the NCAA” to help them shape policies that would ensure eligibility for schools operating in an online model. Many of the students served in this capacity are enrolled in individual sports like swimming and gymnastics, and attending online school frees up hours for their training.

More information about the K12 third quarter results are available here.

Follow @EdWeekMMolnar and @EdWeekIandI for the latest news on industry and innovation in education.



Print Email



This page has been shared 26 times. View these Tweets.



K12 Inc. Releases 2014 Academic Report –

    K12 highlights progress, a focus on academic improvement, and commitment to openness and accountability  

    HERNDON, Va., March 20, 2014 /PRNewswire/ – K12 Inc. (NYSE: LRN), America’s leading provider of proprietary curriculum and online and blended school programs for students in pre-K through high school today released its 2014 Academic Report providing an open and in-depth assessment of overall academic performance in K12-managed public schools.

    Nate Davis, Chairman and CEO of K12 Inc., said that by publishing this Academic Report K12 is continuing its commitment to accountability and transparency.

    “By regularly analyzing and openly communicating the results of our efforts and those of the schools’ governing boards who employ us, we aim to provide transparency and data on the issues we face as well as progress we’ve made.” said Davis. “All this effort is in the service of putting our students first, making their academic success foremost in everything we do.”

    In partnership with school districts and independent, nonprofit charter school governing boards, K12 operates full-time online and blended public schools in over 30 states. Last year K12 released its first comprehensive Academic Report and previously published an Academic Performance Trends report in 2012.

    K12’s 2014 Academic Report includes results from the 2013 state assessments in Reading, English Language Arts, and Mathematics, and examines individual school performance over a three-year period. The report details data on student performance in key subgroup populations, including low-income students (based on free or reduced-price lunch eligibility) and special education.

    The report also includes the most recent results from the Scantron Performance Series(R) assessments, used by K12 to provide a common measure of achievement across K12-managed schools with standards and accountability systems that differ state by state. The Scantron assessments, administered in the fall and spring, are norm-referenced adaptive tests that track gains in Reading and Mathematics during a school year, and allow comparison of each school’s performance to the performance of the student population used in norming the tests.

    Key findings of K12’s 2014 Academic Report include:

       – Over the past four years, students in K12-managed schools have generally       demonstrated gains very close to or above the Scantron mean norm group       gains in both Reading and Mathematics.     – On Scantron assessments, students in K12-managed public schools overall       outperformed the mean norm group gain in both Reading and Mathematics.     – In the 2012-2013 school year, on Scantron assessments K12-managed public       schools achieved 125 percent norm group gain in Reading across all grades       and 102 percent norm group gain in Mathematics across all grades.     – Persistence makes a difference.  Data confirm that students perform       better on state proficiency tests the longer they stay with the K12       program.  Students enrolled three or more years in K12-managed public       schools achieve higher percentages at or above proficiency compared to       students enrolled less than one year: 17 percent higher in Reading, 22       percent higher in English Language Arts, and 11 percent higher in       Mathematics.     – In K12-managed public schools, as in most public schools, lower income       students – those eligible for free or reduced-price lunch – do not       perform as well as students not eligible for federal meal subsidies.     – Compared to most public schools, K12-managed public schools serve a       significantly higher percentage of students who qualify for free or       reduced-price lunch: 63 percent in K12-managed schools compared with a       national average of 49 percent.     – K12-managed public schools in a sample of eight states, which includes       some of the largest schools, served a higher percentage of special       education students compared to the percentage of special education       students in the total school population in each state.     – State-adopted academic growth measures at two of K12's largest managed       public schools – Agora Cyber Charter School (PA) and Ohio Virtual       Academy – show these schools are making improvement in most grades even       as these schools continue to show rapid growth in enrollment with an       increasing number of students who qualify for free or reduced-price lunch       and an increasingly mobile student population. 

    K12’s Chief Academic Officer, Dr. Margaret Jorgensen, said, “While we are seeing improvement in many of the schools K12 serves, it is clear we need to make greater progress toward higher levels of proficiency for all students. That being said, the results of the Scantron tests and many of the state-adopted growth measure assessments show a more positive picture on student learning.”

    Dr. Jorgensen added, “Nevertheless, our unwavering commitment is to raise achievement for all students and help them reach their academic goals, regardless of background, socioeconomic situation, or academic history. This report helps focus our efforts by showing us where we are succeeding and where we need to improve.”

    The K12 report highlights many new programs employed at K12-managed public schools to strengthen student engagement and drive academic success, including innovative blended learning models, a “Strong Start” initiative for new students, family academic support teams, increased teacher-led advisory sessions, college and career workshops, and additional remedial programs in the critical subjects of reading and math.

    “As we address the challenges of an increasing population of students who qualify for free or reduced lunch, we will continue to adapt and innovate to meet the needs of students enrolling in K12-managed public schools,” said Dr. Jorgensen. “We are exploring new digital solutions to enhance individualized learning for students and data-driven decision making for teachers. Moving forward, we will continue to monitor our efforts, collect and analyze data, and replicate successful practices across the schools we serve.”

    In response to a growing number of academically at-risk and credit-deficient students choosing online schools, K12 continues to launch new Insight Schools designed to serve the needs of students who were falling behind or failing in traditional schools. The programs offered at Insight Schools provide targeted solutions and wrap-around services to help at-risk students increase their level of engagement and earn credits needed to graduate. K12 is also launching a number of new initiatives designed to support teachers with more training, professional development and instructional tools.

    “We have a tremendous group of talented teachers and school leaders at K12,” said Dr. Jorgensen. “We are a company of educators. More than 70 percent of K12 Inc.’s employees and teachers in K12-managed public schools come to us with an education background. As educators, we take our responsibilities to the schools, students, and families we serve very seriously, and we are committed to doing everything we can to help them succeed.”

    The K12 report highlights the critical role of the highly qualified, state-certified teachers in K12-managed schools. Nearly 6,000 teachers are employed in K12-managed schools across the U.S. – the nation’s largest network of online school teachers in kindergarten through high school.

    Davis, who was recently named K12’s CEO in addition to his role as Chairman of the Board, has steered the organization towards increased accountability while advancing a progressive plan to improve and refine K12’s instructional models, curricula, and technology systems to drive higher performance. He outlined these initiatives today at K12’s second annual Academic Day held at the company’s Virginia-based headquarters.

    Emphasizing K12’s mission-driven culture, Davis affirmed that the education company’s focus is “on putting students first and supporting our teachers and school leadership, improving the quality of our curriculum and assessments, and accelerating the innovative use of technology to deliver engaging and effective learning experiences for each student.”

    Davis concluded, “We succeed only when students succeed. That is our goal. That is our passion. That is our work.”

    About K12 Inc.

    K12 Inc. (NYSE:LRN), a company of educators, is the nation’s leading provider of proprietary curriculum and online and blended school solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. The K12 program is offered through K12 partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at

    K12’s 2014 Academic Report:

    Logo –

    SOURCE K12 Inc.

    /CONTACT: Jeff Kwitowski, SVP, Corporate Communications, 703-483-728,

    /Web site:


    Mary Bottari.

    Center for Media and Democracy, and

    GET UPDATES FROM Mary Bottari






    From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers for Phantom Students and Failing Grades

    Posted: 10/04/2013 10:39 am


    Financial Crisis, éducation, Video, K12 Inc., American Legislative Exchange Council, Cyber Schools, For-Profit Education, Online Charter Schools, Online Schools, Virtual Schools, Whitney Tilson, Business News



    58 people like this. Be the first of your friends.








    Get Business Newsletters:



    The data is in and K12 Inc.’s brand of full-time public “cyber school” is garbage. Not surprising for an educational model kicked off with a $10 million investment from junk-bond king Michael Milken.

    Milken was the Wall Street financier who virtually invented junk-bonds – high-risk securities that were used to leverage hostile buyouts in the “go-go” 1980s. Milken came to symbolize Wall Street excess, serving as inspiration for the Michael Douglas character Gordon Gekko in the 1987 movie Wall Street. Milken spent almost two years in a federal penitentiary for securities fraud.

    After he was released from prison, Milken set his sights on the $600 billion public education “market,” forming new companies including Knowledge Universe and Knowledge Learning, parent company of the KinderCare child care chain. With his $10 million stake in K12 Inc., Milken aided one of his Vice Presidents and another junk dealer, Ron Packard, who specialized in mergers and acquisitions for Goldman Sachs back in the ’80s.

    The duo prepped to exploit the public education sector, and boy, have they. His various educational ventures have made Milken one of the richest men in America, and Packard raked in over $16 million in compensation from 2008 to 2012 as CEO of K12 Inc.– almost all of that money siphoned from public schools

    Explosion of For-Profit “Virtual Schools” Linked to ALEC

    In recent years, there has been an explosion of full-time “virtual” charter schools paid for by the taxpayer. From 2008 to 2012, 157 bills passed in 39 states and territories (including the District of Columbia) that expand online schooling or modify existing regulations. Many of these bills are attributable to American Legislative Exchange Council (ALEC) politicians.

    ALEC approved a “model” Virtual Public Schools Act in 2005 at a time when both K12 Inc. and Connections Academy (the second largest for-profit) were corporate sponsors and helped craft the measure, according to ALEC’s website at the time. Connections Academy quit ALEC under pressure, but K12 Inc. remains on the ALEC Education Task Force and helped sponsor the organization’s recent 40th anniversary shindig in Chicago.

    K12 Inc. and ALEC have pushed a national agenda to replace brick-and-mortar classrooms and hands-on teaching with computers and “distance learning.” K12 Inc. operated 58 full-time virtual schools and enrolled close to 77,000 students in the 2010-2011 school year.

    Cyber School Students, Here Today Gone Tomorrow

    Like the ubiquitous African email scammers that promise great things as long as you pay them in advance, evidence is building that some full-time charter schools charge state taxpayers big bucks for students who may only spend a few days or a few weeks in front of a computer before they decide that “virtual” education is not for them – but the schools keep the cash anyway.

    Here is the trick. In many states, there is an annual “count date” or dates where heads are counted and state funding is distributed per child. Evidence is mounting that for-profit charters spend a massive amount on advertising to pack in students before the count (“enrollment bursts,” one education expert calls it), but once they get the cash, things fall apart.

    A 2012 USA Today exposé revealed that “virtual, for-profit K-12 schools have spent millions in taxpayer dollars on advertising” – $94.4 million from 2007 to 2012. K12 Inc. spent some $21.5 million in just the first eight months of 2012. Worse, K12 Inc. targets kids with huge ad buys on Nickelodeon, The Cartoon Network, as well on teen sites such as and

    One former teacher from Pennsylvania’s Agora Cyber Charter School, which is run by K12 Inc., talked about being assigned 300 students and not having any idea how many attended class: “A huge portion of my students never showed up or did anything. I have no clue what happened to them, though I have no doubt Agora was charging the state for them,” she said.

    Another former teacher from K12 Inc.’s Colorado Virtual Academy said, “Three-quarters of my credit recovery kids never logged in, never completed any work, never answered their emails or phone calls, yet they remained on my class rosters. I began wondering about the state-mandated hours for students at the high school level. No one is monitoring this as far as I can see.”

    In a few states, regulators are starting to catch on. According to the New York Times, a Colorado state audit found that K12 Inc.’s Colorado Virtual Academy received money for 120 students whose enrollment could not be verified.

    “The kids enroll, you get the money, the kids disappear,” says Gary Miron of the National Education Policy Center (NEPC) and Western Michigan University told the Times.

    Costs for online learning are much lower than traditional schools. Kids take lessons at home, so the virtual school operators have no classrooms to maintain or heating bills to pay. Teachers are paid less, and student-teacher ratios are massive. But some states pay cyber schools almost as much per child as brick-and-mortar schools – that’s $10,000 per student in Pennsylvania, double what it actually costs, says the state auditor.

    The Data Is In: Kids Don’t Learn Well in Front of Computer Screens

    So while the public school system is bleeding money to cyber schools, how are those cyber students doing?

    Until recently, data on performance of these full-time virtual charters has been scarce. But educators at NEPC started to pull together performance data from multiple states for annual and special reports. They confirmed what many suspected: with rare exceptions, kids don’t learn sitting in front of a computer all day.

    Using Adequate Yearly Progress (AYP) state data, state performance rankings, and graduation rates, the researchers showed that full-time virtual schools lag significantly behind traditional brick-and-mortar schools. In particular, only 27.7 percent of K12 Inc. online schools met AYP in 2010-2011, compared to 52 percent of public schools. Of the 36 K12 Inc. schools that were assigned a school rating by state education authorities, only seven (19.4 percent) had ratings that clearly indicated satisfactory status.

    The same study shows that on-time graduation rates are also much lower at online schools than at all public schools on average in the United States: only 37.6 percent of students at virtual high schools graduate on time, whereas the national average for all public high schools is more than double that: 79.4 percent.

    “The evidence is clear that kids are not doing as well in virtual schools as kids in charter schools or public schools,” says Luis Huerta of NEPC and Teachers College-Columbia University.

    Of particular concern to critics is the company’s emphasis on serving high-risk students who don’t have the motivated homeschool parents and support structures needed to make the most of the model. Why would K12 Inc. focus on this population? “It was an explicit business strategy to go after kids who would demand the least from their educational experience, which ultimately yields increased profits for K12 Inc.,” explains Huerta.

    Irate Investors and Unhappy School Districts

    In 2012, K12 Inc.’s cyber model came under fire from a surprising source: the company’s shareholders. They took a look at the emerging data and filed a class action suit alleging that Packard violated securities law by making false statements and omissions to investors about student performance. Another key allegation in the lawsuit was that K12 Inc. schools were hiding dropout rates or “churn” rates of more than 50 percent. This critical factor was “obscured by K12’s aggressive tactics to replace those who dropped out, allowing K12 to maintain the illusion that overall enrollments were increasing.” The parties reached a tentative settlement for $6.75 million in March 2013, and company officials continue to deny any wrongdoing.

    Affidavits from former K12 Inc. teachers that were incorporated into the complaint paint a devastating picture of an enrollment-driven, profit-driven corporate culture that leaves kids in the dust. (Note to Wall Street: If you want to exploit children, don’t hire a bunch of teachers who actually care about kids.)

    Here in Wisconsin, where the school choice movement began and where there has been a rapid expansion of distance learning, two Wisconsin school districts with online education programs – Grantsburg’s iForward and Waukesha’s eAchieve Academy – announced that they would not renew their contracts with K12 Inc. for the 2012-2013 school year.

    Grantsburg School District Superintendent Joni Burgin told the Center for Media and Democracy (CMD) that when the contract was purchased by K12 Inc., it was “fraught with challenges from the get-go. By the end of the year, we decided we couldn’t do it anymore. We decided to manage the school on our own.” Although the move to take the school’s management in-house was challenging at first, Burgin said, now they “don’t have to sit at a table and arm-wrestle with corporate business people who don’t understand how education is done in Wisconsin and don’t always have the students’ interests in mind. It’s called ‘for-profit’ for a reason.”

    The Big Short: Wall Street Turns on K12 Inc.

    For K12 Inc. CEO Ron Packard, it’s all about “educational liberty.” “Kids have been shackled to their brick-and-mortar school down the block for too long,” he puffs.

    Packard himself is “shackled” to the big bucks. In 2013, K12 Inc. took in $848.2 million from its business, with $730.8 million coming from its “managed public schools” (a.k.a. the taxpayers). That kind of money could buy you an army of actual teachers, more than 13,000 using Wisconsin teacher salaries as a guide.

    “Like subprime lenders giving mortgages to people with bad credit, this can be a good and socially beneficial business when it is carefully targeted. But when you introduce unlimited government money and virtually no government regulation, the industry will run amok,” Tilson told CMD. He argues that the K12 Inc. model is not appropriate for mass consumption, pointing to huge enrollment in Pennsylvania and Ohio K12 Inc. schools.

    But working to maintain the model is an army of lobbyists and ALEC politicians. K12 Inc. has hired 153 lobbyists in 28 states from 2003 to 2012 according to the National Institute on Money in State Politics.  

    All this leaves education specialists worried. There is no doubt that online education exhibits dazzling possibilities. Education expert Gary Miron uses an extensive suite of online tools to teach college and graduate students, and he is “excited” about the future of online education.

    But Miron “doesn’t want to see that future defined by corporate interests like K12 Inc. with a very narrow agenda,” he told CMD. Miron worries that “before policymakers wake up, we will have spent millions and millions of taxpayer dollars funding a failed education model.”


    In September, the Center for Media and Democracy (CMD) launched a new project on the privatizers and profiteers selling out our democracy. You can find detailed corporate profiles of K12 Inc. and Connections Academy (owned by Pearson, a British multinational media company) on our new website Rebekah Wilce and Katie Lorenze contributed to this article.








     by Taboola

    Courtney Jarrell, Utah Teacher, Accused Of Raping Student


    Which Schools Top 2014’s List Of Best Colleges?


    Psychologist: Greed Is Bringing America To Its Knees


    1 Surprising Simple Equation Can Help You Become a Better InvestorE*TRADE Financial


    Health Care Reform Information in 2 MinutesWebMD


    The 8 Least Expensive Places To Live in the U.S.Wall St. Cheat Sheet


    Sponsored Links

    Analytics Masters Degree

    Earn Your M.S. in Analytics Online. Accepting Applications thru…

    LLC in 3 Easy Steps

    LLCs Made Quick and Easy. Featured by CNN & MSNBC.

    360 Savings Account

    360 Savings. No fees. No minimums. Nothing standing in your way. Learn More.

     Buy a link here 



    • Comments
    • 18
    • Pending Comments
    • 0
    • View FAQ


    Post Comment Preview Comment

    To reply to a Comment: Click “Reply” at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to.


    Share your Comment:

    Post to Facebook.

    Post to Blogger.

    Post to Twitter.

    Post to WordPress.

    Post to TypePad.

    Post to Tumblr.

    View All



    Recency | 



    This user has chosen to opt out of the Badges program


    I’m not a scientist, man. I’m a corporate shill..

    1524 Fans


    18 minutes ago ( 9:48 PM)

    Those who can, do. Those who can not, privatize.

    Permalink |Share it




    796 Fans


    08:51 AM on 10/05/2013

    We had a couple of charter schools in PA, one owned by a politican, another by a foreign investor. No education was provided but the tax dollars went to fine decorations and salaries for friends and relatives.

    I guess they will need time to work out the bugs.

    Permalink |Share it



    Inside of a dog it’s too dark to read..

    619 Fans


    06:00 PM on 10/04/2013

    The utter cynicism and disregard for actually providing a quality education of cyber schools is sickening.

    Permalink |Share it




    160 Fans


    04:12 PM on 10/04/2013

    it’s a hoax. it’s not the implementation, it’s the process that fails. however, traditional schools aren’t anything to get excited about either.

    Permalink |Share it



    Inside of a dog it’s too dark to read..

    619 Fans


    05:59 PM on 10/04/2013

    And I would disagree with your last statement. Our children attended and graduated from a public high school that has 96% attendance, 97% graduation, with 93% of students going on to attend college. They score higher on college entrance exams than the state average, which is already higher than the national average, and a recent graduating class (525 students) were offered more than $17 million in scholarships. If this public school can produce this much excellence, we should try to find a way for others to excel, as well.

    Permalink |Share it


    madame48’s a gop Cookbook !Tempus edax,homo edacior.

    1167 Fans


    02:56 PM on 10/05/2013

    do some actual research…start with Finland, the 100% unionized country that has high teacher status and high pay ( so they can be very picky in admitting college students to the profession) this is the opposite of here. Germany, pretty much ditto…high status and pay, quality people admitted to teach. the other big thing in our competitors..Finland less than 5% poverty rate..ours 24% poverty rate (to see how poverty affects the brain development see the google)

    Permalink |Share it


    This user has chosen to opt out of the Badges program


    Gnothi Seauton.

    2331 Fans


    02:41 PM on 10/04/2013

    Treating education like a business will simply produce minds which only know what business wants them to know.

    Permalink |Share it




    1062 Fans


    02:38 PM on 10/04/2013

    This article blurs a line in the for-profit privatization scam. It compares online education to both public and charter schools, when many charter schools are also part of the for-profit privatization “reform” movement… and leaves out the publicly funded vouchers for private schools.

    The point I guess is that the scammers are not just online.

    We need to be wary of all of the above when profit, not the education of children is the motivation.

    I praise the article for exposing what can only be called criminality though.

    Permalink |Share it





    106 Fans


    01:32 PM on 10/04/2013

    Cyber schools are a white collar crime. A lot of people get hurt but no one goes to jail.

    ” In 2013, K12 Inc. took in $848.2 million from its business, with $730.8 million coming from its “managed public schools”. I’d be interested to see how much was actually spent per child and on what, along with the educational standards each child met. I’ll bet it doesn’t come close to a “bricks and mortar” school.

    Permalink |Share it





    85 Fans


    01:24 PM on 10/04/2013

    It is strange that there are no comments in the USA on this article– maybe because of the “shutdown” ?

    By strange co-incidence, I read about “ghost schools” in Pakistan yesterday in There are no schools but taxpayers keep paying!

    In north America, though, it is corporate thieves raiding public schools.

    I suspect there is “too much democracy” in some rich countries,where “making money” rather than “earning” it is the prevailing ethos.

    Permalink |Share it



    Lesley Anne


    462 Fans


    01:21 PM on 10/04/2013

    Corrections Corporation of America has lovely facilities for these and other scammers to spend their twilight years and they are looking to keep them 100% occupied. Too bad no one has the guts to put them there.

    Permalink |Share it


    Wisconsin Progressive


    40 Fans


    11:50 AM on 10/04/2013

    Gee sounds exactly like government sponsored healthcare programs.

    Maybe Obama will make the Affordable School Act next so we can have more fraud, waste and abuse!

    Permalink |Share it



    Inside of a dog it’s too dark to read..

    619 Fans


    05:50 PM on 10/04/2013

    Actually, I was going to say the exact opposite. Public education, like healthcare should not be a for profit venture. The goal of a for profit business is . . . profit, obviously. The goal of education should be education.

    My only complaint about ACA is that it’s not a single payer, which would move it even further from the for profit mindset of insurance companies. But it’s a good start. You should sort through your logic before you make a statement so full of holes as the one you just posted.

    Permalink |Share it




    922 Fans


    06:33 PM on 10/04/2013

    Keep Obama and Arne Duncan away from our public schools!

    Permalink |Share it


    There are More Comments on this Thread. Click Here To See them All



    . E-Mail Article Printer-Friendly Translate Share Article Text Size

    Florida E-Learning Policy Shift Puts Spotlight on K12 Inc.

    Aug 28, 2013 (Menafn – Education Week – McClatchy-Tribune Information Services via COMTEX) –Florida is pursuing policy and funding changes meant to open up the world of online K-12 education to greater competition, prompting tough times for the state-sponsored Florida Virtual School. But what do those policy changes mean for K12 Inc., the country’s largest for-profit manager of online public schools, which has a major footprint in the state?

    The answer is a mixed bag, with plenty of current and potential growth, but also continued questions about academic performance and quality, according to a review of recent news reports.

    While the state-run Florida Virtual School recently announced that it has shed one-third of its workforce amid sharply declining enrollments, the number of online public charter schools that Herndon, Va.-based K12 Inc. manages in the state is expanding, with new schools opening this fall in Broward, Duval, Palm Beach, and Pasco counties.

    “The tension in Florida is that there are so many different online options,” said John Bailey, the executive director of Digital Learning Now, a national advocacy group based in Tallahassee, Fla. “The legislature is trying to harmonize funding for all those options and trying to make sure there is equal opportunity for all providers.”

    Jeff Kwitowski, the senior vice president for corporate communications for K12 Inc., downplayed the “us-versus-them” dynamic.

    See Also

    See related story, “Florida Virtual School Faces Hard Times.”

    “From our perspective, we provide [content and services] to all types of institutions,” said Mr. Kwitowksi, noting that K12 Inc. also has contracts related to virtual instruction programs with more than 40 traditional school districts across the state.

    K12 Inc. is also growing in other parts of the country: This fall, the company will manage new full-time online schools in Colorado, Kansas, Michigan, Ohio, South Carolina, and Texas, bringing to more than 50 the total number of online and “blended” schools in its portfolio.

    In Ohio, the new Insight School of Ohio, approved by the state department of education in July, will join seven other K12 Inc. Insight schools around the country in focusing on “academically at-risk students,” according to a release from the school’s nonprofit governing board.

    “The Insight model is structured a little differently,” Mr. Kwitoski said. “It’s designed to provide more support for students in need of alternatives” to regular public schools.

    Quality Questioned

    A similar school has twice this year failed to gain approval in Pennsylvania, however.

    The proposals submitted by the proposed Insight PA Cyber Charter School and seven other applicants, none of which was approved, “were deficient and lacked evidence that students would be offered quality educational programs,” according to Timothy Eller, a spokesman for the Pennsylvania department of education.

    K12 Inc. has also faced problems in Tennessee.

    The Chattanooga Times Free Press reported this month that state officials had rejected K12 Inc.’s latest enterprise because they were still dealing with “low first-year student performance”at the company’s virtual school in Union County.

    Mr. Kwitowski wrote in an email that local officials had responded to the Tennessee education department’s concerns and that the new virtual school “still plans to open this year.”

    In addition to managing more full-time online schools, Mr. Kwitowski said, the company is eager to continue expanding its offerings for traditional districts, charters, and other organizations looking to provide students with the opportunity to enroll in individual online courses.

    It’s all part of an ongoing shake-up in the K-12 online education market, said Mr. Bailey of Digital Learning Now.

    “Years ago, the way you did online learning was your state sponsored a virtual school,” Mr. Bailey said. But now, with the increase in different types of providers, states are beginning to move toward different models, he said, resulting in friction because the existing funding formulas were not created with the emerging new landscape in mind.

    ___ (c)2013 Education Week (Bethesda, Md.) Visit Education Week (Bethesda, Md.)
    at Distributed by MCT Information Services

    Copyright (C) 2013, Education Week, Bethesda, Md.