Enrollment and Achievement in Ohio’s Virtual Charter Schools

August 02, 2016

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Fordham’s latest study, conducted by learning technology researcher June Ahn from NYU, dives into one of the most promising—and contentious—issues in education today: virtual schools. What type of students choose them? Which online courses do students take? Do virtual schools lead to improved outcomes for kids?

With over thirty-five thousand students enrolled in its fully online charter schools (“e-schools”), Ohio boasts one of the country’s largest populations of full-time virtual students. The sector has also grown tremendously, with a 60 percent increase in enrollment over the past four years—more than any other type of public school. Using four years of comprehensive student-level data to examine Ohio’s e-schools, the study finds: 

  • E-school students are mostly similar in race and ethnicity to students in brick-and-mortar district schools. But e-school students are lower-achieving (and more likely to have repeated the prior grade), more likely to participate in the federal free and reduced-price lunch program, and less likely to participate in gifted education.
  • Students taking online math courses are more likely to enroll in basic classes relative to students taking face-to-face courses. Almost no students take advanced math courses (like AP Statistics, Calculus, or Algebra II) online, especially compared to students who take face-to-face classes.
  • Across all grades and subjects, students who attend e-schools perform worse on state tests than otherwise-similar students who attend brick-and-mortar district schools, even accounting for prior achievement. In contrast, students in grades 4–8 who attend brick-and-mortar charter schools perform slightly better than their district school counterparts in both reading and math. Results are mixed but modest for students in grade ten.
  • Findings also suggest that e-schools drag down the performance of the entire charter sector.

Online schools offer an efficient way to diversify—and even democratize—education in a connected world. Yet they have received negative, but well-deserved, attention concerning their poor academic performance, attrition rates, and ill capacity to educate the types of students who enroll in them. This is especially true in Ohio, where virtual schools have failed (as yet) to realize their potential.

Using a slightly different analytical approach than CREDO’s Online Charter School Study (2015), Dr. Ahn’s results corroborate the disappointing findings on Ohio’s online schools. Bold changes in policy and practice are needed to ensure that these schools better serve their students. For advocates of online learning and educational choice, the work has just begun.

Can Policymakers Fix What Ails Online Charter Schools?

By Dara Zeehandelaar and Michael J. Petrilli

08/08/2016

A major development of recent years has been the explosive growth of online learning in K–12 education. Sometimes it takes the form of “blended learning,” with students receiving a mix of online and face-to-face instruction. Students may also learn via web-based resources like the Khan Academy, or by enrolling in distance-learning “independent study” courses. In addition, an increasing number of pupils are taking the plunge into fully online schools: In 2015, an estimated 275,000 students enrolled in full-time virtual charter schools across twenty-five states.

The Internet has obviously opened a new frontier of instructional possibilities. Much less certain is whether such opportunities are actually improving achievement, especially for the types of students who enroll in virtual schools. In Enrollment and Achievement in Ohio’s Virtual Charter Schools, we at Fordham examined this issue using data from our home state of Ohio, where online charter schools (“e-schools”) are a rapidly growing segment of K–12 education. Today they enroll more than thirty-five thousand students, one of the country’s largest populations of full-time online students. Ohio e-school enrollment has grown 60 percent over the last four years, a rate greater than any other type of public school. But even since they launched, e-schools have received negative press for their poor academic performance, high attrition rates, and questionable capacity to educate the types of students who choose them. It’s clearly a sector that needs attention.

Our study focuses on the demographics, course-taking patterns, and academic results of pupils attending Ohio’s e-schools. It was authored by Dr. June Ahn, an associate professor at New York University’s Steinhardt School of Culture, Education, and Human Development. He’s an expert in how technology can enhance how education is delivered and how students learn.

Using student-level data from 2009–10 through 2012–13, Dr. Ahn reports that e-schools serve a unique population. Compared to students in brick-and-mortar district schools, e-school students are initially lower-achieving (and more likely to have repeated the prior grade), more likely to participate in the federal free and reduced-price lunch program, and less likely to participate in gifted education. (Brick-and-mortar charters attract even lower-performing students.)

The analysis also finds that, controlling for demographics and prior achievement, e-school students perform worse than students who attend brick-and-mortar district schools. Put another way, on average, Ohio’s e-school students start the school year academically behind and lose even more ground (relative to their peers) during the year. That finding corroborates the disappointing results from Stanford University’s Center for Research on Education Outcomes (CREDO) 2015 analysis of virtual charter schools nationwide, which used a slightly different analytical approach.

Importantly, this study considers e-school students separately from those in other charters. It finds that brick-and-mortar charter students in grades 4–8 outperform their peers in district schools in both reading and math. In high school, brick-and-mortar charter students perform better in science, no better or worse in math, and slightly worse in reading and writing compared to students in district schools. This confirms what some Ohioans have long suspected: E-schools weigh down the overall impact of the Buckeye State’s charter sector. Separate out the e-school results and Ohio’s brick-and-mortar charters look a lot better than when the entire sector is treated as a whole.

The consistent, negative findings for e-school students are troubling, to say the least. One obvious remedy is to pull the plug—literally and figuratively—but we think that would be a mistake. Surely it’s possible, especially as technology and online pedagogy improve, to create virtual schools that serve students well. The challenge now is to boost outcomes for online learners, not to eliminate the online option. We therefore offer three recommendations for policy makers and advocates in states that, like Ohio, are wrestling to turn the rapid development of online schools into a net plus for their pupils.

First, policy makers should adopt performance-based funding for e-schools. When students complete courses successfully and demonstrate that they have mastered the expected competencies, e-schools would get paid. This creates incentives for e-schools 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—a form of “cream-skimming” that is not only defensible but, in this case, preferable. At the very least, proficiency-based funding is one way for e-schools to demonstrate that they are successfully delivering the promised instruction to students. That should be appealing to them given the difficulty in defining, tracking, and reporting “attendance” and “class time” at an online school.

Second, policy makers should seek ways to improve the fit between students and e-schools. Based on the demographics we report, it seems that students selecting Ohio’s e-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 e-schools from policies requiring all charters, virtual ones included, to accept every student who applies and instead allow e-schools to operate more like magnet schools with admissions procedures and priorities. E-schools would be able to admit students best situated to take advantage of the unique elements of virtual schooling: flexible hours and pacing, a safe and familiar location for learning, a chance for individuals with social or behavioral problems to focus on academics, greater engagement from students who are able to choose electives based on their own interests, and the chance to develop high-level virtual communication skills. E-schools should also consider targeting certain students through advertising and outreach, especially if they can’t be selective. At the very least, states with fully online schools should adopt a policy like the one in Ohio, which requires such schools to offer an orientation course—the perfect occasion to set high expectations for students as they enter and let them know what would help them thrive in an online learning environment (e.g., a quiet place to study, a dedicated amount of time to devote to academics).

Third, policy makers should support online course choice (also called “course access”), so that students interested in web-based learning can avail themselves of online options without enrolling full-time. Ohio currently confronts students with a daunting decision: either transfer to a full-time e-school or stay in their traditional school and potentially be denied the chance to take tuition-free, credit-bearing virtual courses aligned to state standards. Instead of forcing an all-or-nothing choice, policy makers should ensure that a menu of course options is available to students, including courses delivered online. To safeguard quality and public dollars, policy makers should also create oversight to vet online options (and veto shoddy or questionable ones). Financing arrangements may need to change, too, perhaps in ways that more directly link funding to actual course providers. If it were done right, however, course choice would not only open more possibilities for students, but also ratchet up the competition that online schools face—and perhaps compel them to improve the quality of their own services.

Innovation is usually an iterative process. Many of us remember the earliest personal computers—splendid products for playing Oregon Trail, but now artifacts of the past. Fortunately, innovators and engineers kept pushing the envelope for faster, nimbler, smarter devices. Today, we are blessed as customers with easy-to-use laptops, tablets, and more. But proximity to technology, no matter how advanced, isn’t enough. E-schools and their kin should facilitate understanding of how best to utilize online curricula and non-traditional learning environments, especially for underserved learners. From this evidence base, providers should then be held to high standards of practice. Though the age of online learning has dawned, there is much room for improvement in online schooling—and nowhere more than in Ohio. For advocates of online learning, and educational choice, the work has just begun.

—Dara Zeehandelaar and Mike Petrilli

This post originally appeared on Flypaper

K12 Inc. Tries to Pivot from Virtual School Failures to Profit from "Non-Managed" Schools

Submitted by Dustin Beilke on January 7, 2016 – 9:01am

If you were a public school and Wall Street didn’t like you that might not seem like such a big deal. What do financiers know about educating children? It’s a big deal, however, if you are K12, Inc., and enticing investors to buy into your low-cost, high yield "cyber school" idea is key to your bottom line.

At K12, Inc.’s stockholder meeting in December, its own investors criticized the schools’ lamentable academic performance and voted down its executives’ proposed salary increases. This is just the latest piece of bad news, which has been coming in rafts for K12 since 2013.

As K12’s executives were being rebuffed by stockholders inside the law offices of Latham & Watkins, in Washington, D.C., outside K12 was picketed by members of the California Teachers Association for more or less the same list of educational shortcomings, as Diane Ravitch noted.

Some editorial boards crow when they receive criticism from two opposing sides of a controversial issue. "If both sides are unhappy we must be doing something right" is the familiar refrain, as if there are only ever two sides to an issue or the sides have equal merit.

In the case of K12, however, it is hard not to wonder how much longer the company can withstand this loud unanimity of animus–even a firm Wall Street insiders like convicted fraudster Michael Milken helped launch, as the Center for Media and Democracy (CMD) detailed in "From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers with Phantom Students and Failing Grades."

No major supporters have yet publicly called for pulling the plug, but anti-public education zealots like the billionaire Walton family and the Koch brothers have plenty of other places to invest in to try to bring down "government schools."

Big, Big Payouts to Execs at Taxpayer Expense

In its recommendation that shareholders vote against the pay proposal, the advisory firm Glass Lewis & Co. said K12 exemplifies a "substantial disconnect between compensation and performance results." Glass Lewis gave the company an "F" for how it paid its executives compared to peers.

In 2015, K12 CEO Nathaniel Davis was making $5.3 million and CFO James Rhyu was making $3.6 million. Their base salaries were $700,000 and $478,500, respectively, which were dwarfed by additional pay and stock for their "performance." (See more details on their total compensation in the pdf uploaded below.)

In all, K12’s five highest paid executives received a total of more than $12 million in compensation last year. That’s one of the reasons CMD has called K12 Inc.’s former CEO, Ron Packard, the highest paid elementary and secondary school educator in the nation.

Nearly 90% of K12’s revenues–and thus its huge pay for executives</a–<comes from Americans' state or federal tax dollars.

K12 Inc. also pays each member of its Board of Directors between $155,000 and $216,000 annually for a few hours of work each year—far more than local school board members make for much more time spent in general. (See uploaded K12 proxy filings below for the details.)

While K12’s promoters love to mention that it is a publicly traded company, it is also trading at its lowest stock price since 2010, down 75 percent from its September 2013 peak.

Meanwhile, a new report from Stanford University’s Center for Research of Education Outcomes (CREDO) found that online charters do a very poor job of educating children. In general, students in online charters lose 42 days of reading in a year, and 180 days of instruction in math. And there are only 180 days of instruction in most public school years.

Enrollment has also dropped almost 5 percent from its peak. No less a business authority than Bloomberg Business investigative reporter John Hechinger presented grim prospects for K12 as of late 2014, and no one has revised them upward.

Millions in K12 Ads at Taxpayer Expense Too

This decrease in business has come despite massive advertising and marketing expenditures by the virtual schools industry. K12 has spent untold millions in public funds on ads—a luxury budget item that traditional public schools are not permitted even when competing with K12 for students.

It spent at least $20 million on ads in 2012 alone, but it has not publicly disclosed ad spending in recent years even as its ads have become more ubiquitous in markets like Wisconsin and Arizona, for example. K12 does not disclose its ad budget in its public annual report.

Plus Taxpayer Money Helps K12 Pay to Play with ALEC Politicians

K12 also spends taxpayer money lobbying state and federal officials. It recently got a seat, for example, on the corporate board of the American Legislative Exchange Council (ALEC), where for years it has also paid for a seat and vote on ALEC’s "Education and Workforce Development" Task Force, which advances a "cash for kids" lobbying agenda.

ALEC corporations spend tens of thousands of dollars each year for such access to lawmakers, and K12 has also paid many thousands of dollars to underwrite some of ALEC’s docket of events for legislators and lobbyists.

Through the ALEC Task Force, K12 has actually had an equal vote with state legislators on so-called "model" bills to divert taxpayer funds away from traditional public schools toward the objectives of ALEC’s private sector funders, to help their bottom-lines and/or legislative agenda.

ALEC’s "Virtual Public Schools Act," for example, even allows virtual schools to be paid the same amount per pupil as traditional public schools even though operations like K12 have no bricks and mortar school house or desks or air-conditioning or gyms, etc., to maintain.

As CMD’s SourceWatch has documented:

"In 2004 when the ‘model’ bill was drafted and approved, both K12 Inc. and Connections Academy were part of the ‘School Choice Subcommittee of ALEC’s Education Task Force, according to an archived version of ALEC’s website from February 2005. The subcommittee recommended six bills for adoption, including the ‘Virtual Public Schools Act.’ According to ALEC, the bill was drafted by Bryan Flood of K12 along with Mickey Revenaugh of Connections Academy, then-Colorado Representative Don Lee (now a lobbyist for K12, see [below]), ‘and the rest of the Subcommittee.’" (Connections is now part of Pearson PLC, a British mega-corporation headquartered in London.)

K12’s reps at ALEC Education Task Force meetings have been its Senior VP for Government Affairs (lobbying), Bryan Flood, along with its VP for Government Affairs, Don Lee, and its Senior Director of Government Affairs, Bob Fairbank.

ALEC’s Education Task Force is co-chaired by Utah state Sen. Howard Stephenson (R-11). Through the ALEC corporate bill mill, Stephenson has even done a roadshow with K12’s Don Lee to drive more business to K12 through legislation. Given his advocacy of efforts to divert tax dollars from traditional public schools to charters and virtual schools, some press in Utah have questioned whether Stephenson is a public servant or a lobbyist for outside interests. (There is no way to independently verify whether Stephenson has actually ever invested in K12 or Pearson, or not.)

Notably, Lee and Fairbank are both former Colorado state legislators who took the revolving door out of public service into well-paid gigs, like peddling what K12 is selling to legislatures across the country. And, the head of their lobbying shop, Flood, is the former flack for then-Gov. John Engler of Michigan, who is now pulling down big bucks for sitting on K12’s Board of Directors: $55,000 in cash plus $100,000 in K12 stock for a few hours of his time last year.

Making "Friends" Everywhere K12 Goes….

Utah, Arizona, and Wisconsin are not the only states where K12 is active and facing criticism. The "Ohio Virtual Academy," for example, which accounted for 10 percent of K12’s revenue in 2014, received failing grades on a state report card for student test-score progress and graduation rates. A state analysis found that only 37 percent of K12’s Ohio ninth graders earned diplomas within four years.

K12’s operations in California have produced similar results, as In the Public Interest (ITPI) has documented, despite K12’s efforts to blame the state. (CMD has partnered with ITPI on research previously.)

Several online charters have cancelled their contracts with K12, and in Tennessee, education commissioner Kevin Huffman called for shuttering the Tennessee Virtual Academy because it had test results "in the bottom of the bottom tier" and is an "abject failure."

Altogether, K12 has lost management contracts or been threatened with school shutdowns in five states.

The National Collegiate Athletic Association (NCAA) also ruled last April that prospective students from 24 K12 Inc. high schools can no longer count credits toward athletic scholarships.

A pro-union decision by the California Public Employment Relations Board no doubt came as more bad news for K12’s brass. The board ruled that the California Teachers Association (CTA) is the exclusive bargaining agent of the more than 750 teachers at the Simi Valley-based California Virtual Academies (CAVA). Teachers have been seeking a stronger voice in improving working conditions and student learning for CAVA’s 15,000 students.

CAVA teachers had been calling for improvements for years. In March 2015 a study of CAVA by ITPI called for better oversight. In June 2015, CTA filed complaints with school districts that authorized CAVA charters throughout California.

K12 Hoping "Non-Managed" Schools Will Save It?

While no one is publicly calling for K12 to shut down, K12 itself is "diversifying its portfolio" in an apparent effort to ease out of the online charter school business.

K12 has built its brand by operating "managed schools" in which K12 runs and profits from all of the programs at a particular K12 school. In a managed school, the company does all of the teaching, curriculum, assessment for the customers—er, students—who choose it over attending a public school or participating in a traditional home-schooling arrangement.

The new revenue stream K12 is pioneering is in what it is now calling "non-managed schools" in which K12 sells the digital content and platform for a school for some other company or entity to run (and be responsible for the results). Non-managed programs have been growing by leaps and bounds as managed virtual schools have fallen on hard times.

The only problem with this model is that managed schools still bring in much more money than the non-managed kind. Some managed schools, for example, bring in $1,849 per student while non-managed schools bring in only $462 per pupil on average.

But, getting some revenue without being responsible for results may be the way for the future of K12: an analysis of K12 figures comparing September 2015 to the prior year showed that enrollment at "managed" virtual schools was declining 12 percent while it is increasing 34.5 percent at "non-managed" schools.

Non-management could take profiting from taking money out of traditional public schools without real accountability to a new level for K12.

CMD’s Executive Director Lisa Graves contributed research to this report.

k12inc 2.pdf

K12 upgraded to Overweight By First Analysis

August 10, 2016 10:01 am

Writer: Camille Ainsworth

Posted In:

US Broker Ratings

In an analyst rating update on Wednesday shares of K12 (NYSE:LRN) had their rating upgraded by analysts at First Analysis.

The broker said it has now set a ‘Overweight’ rating on shares of K12 with a price target of 14. The price target according to the broker shows a possible increase of 23.35% from the current stock price of 11.35.

Over the last twelve months K12’s share price has decreased from 14.88 to 11.35, changing by -23.72%.

The companies 50 day moving average is 12.68 and its 200 day moving average is 11.16. The 52 week high K12’s shares have peaked at is 15 whilst the 52 week low for the company’s shares is 7.11.

K12 has 37,492,000 shares which are currently outstanding with a price of 11.35 calculating K12’s market capitalisation to 425.53M USD .

K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a range of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include public school programs, which consists of managed programs and non-managed programs, Institutional Sales, which includes educational products and services sold to school districts, public schools and other educational institutions that it does not manage and international and private pay schools, which consists of private schools. The Company offers a range of learning applications, which include mobile learning, interactive games, virtual labs, e-book and digital book distribution.

This Free Education Comes with Strings Attached

What if you were able to homeschool for free?

This fall, Omaha Public Schools is opening a new online kindergarten-through-8th-grade school specifically targeting homeschooled students. In fact, only homeschooled students are eligible to enroll this year.

The program, Omaha Virtual School (OVS), is a publicly funded school that allows students to complete much of their coursework from the comforts of home. Enrolled students may also receive access to a computer and low-cost internet as an added benefit. The school is being marketed as the best of both worlds: Homeschooling with the support of professionals—and no price tag.

Sound too good to be true? It might be. Before you sign up, HSLDA recommends that you count the cost. Public programs like OVS take control of the academic curriculum and coursework away from parents and place it in the hands of the public school system. While parents have some involvement, they play of the role of “coach” and make way for certified teachers to do the bulk of the teaching. Parents will have little to no say in the educational objectives or course content of OVS classes.

Consider also the concerning results of studies on the academic achievement of publicly funded virtual schools in other states:

  • A National Education Policy Center study by Western Michigan University researchers showed that only 27.7% of full-time virtual schools run by K12 Inc. met the federal academic progress goals (compared to 52% of traditional public schools). Students in K12 schools scored lower in both reading and math and had an on-time graduation rate of a mere 49%, compared to a statewide average of 79% in states where K12 schools were located.
  • In 2011, Stanford University’s Center for Research on Education Outcomes (CREDO) reported that virtual students in Pennsylvania scored 13% worse in reading and 24% worse in math than students in public brick-and-mortar schools.
  • In its 2015 Online Charter School Study, CREDO found innovative new research suggesting that students of online charter schools had significantly weaker academic performance in math and reading, compared with their counterparts in conventional schools.
  • As reported in Education Week in January 2016, the Walton Family Foundation, which has pumped millions of dollars into virtual learning, conducted a series of studies on the academic achievement of these virtual schools. The conclusion: “stark evidence that most online charters have a negative impact on students’ academic achievement.”
  • Individual news stories abound using the familiar phrases such as “lagging behind” and “smaller learning gains” to describe the academic plight of virtual school students. For example, a 2011 New York Times article on the Agora Cyber Charter School reported that 60% of students are behind in math, 50% are behind in reading, and one-third do not graduate on time.

This research, coupled with the evidence showing the profound academic success of private home education, indicates that the home environment is not the only key to homeschoolers’ academic success. HSLDA believes one of the primary reasons homeschooled students excel is the regular parental involvement and control of the educational program. Parents know their children best and care about their children more than any other person or entity. Thus, they are best situated to craft a custom-tailored educational plan to meet the individual needs of each unique child.

We understand that homeschooling is hard work for both parents and students. And we know it comes with a price tag: though options for homeschool curriculum abound as the number of homeschooled students has now topped 2 million, this material is not free or even cheap. However, HSLDA cautions families to carefully calculate the cost of publicly funded free education before handing over educational control to the public school. Students in virtual schools perform worse academically than their peers, on average, and public funding of homeschooling brings public control and standardization, eliminating the distinctiveness of private homeschooling and inviting regulation.

As always, feel free to contact our office with your questions about homeschooling in Nebraska.

Resources

Homeschool Research

Understanding and Improving Full-Time Virtual Schools (National Education Policy Center)

Walton Family Foundation: We Must Rethink Online Learning (Education Week)

Profits and Questions at Online Charter Schools (New York Times)

Studies: Existing full-time virtual schools earn poor grades (Portland Press Herald)

Charter School Performance in Pennsylvania (Stanford University’s Center for Research on Education Outcomes)

Online Charter School Study 2015 (Stanford University’s Center for Research on Education Outcomes)

Latest Editorial Proves The Wall Street Journal Will Defend Almost Any For-Profit Education Company

The Wall Street Journal continued its streak of defending for-profit schools with track records of questionable practices and “abysmal results,” this time shifting its focus away from fraudulent for-profit colleges to attempt to sugarcoat the failing online charter company K12 Inc.

The virtual charter school company K12 Inc. recently reached a $168.5 million settlement with the state of California following an investigation into the company’s marketing and management practices. At the same time, the state’s Education Department has announced an audit of a California virtual charter network managed by K12. The Wall Street Journal’s editorial board was, once again, ready to dismiss facts and defend the for-profit education company against what the board views as a politically motivated attack, baselessly claiming that recently substantiated allegations against K12 are “trumped up.”

The California state investigation into K12, launched by state Attorney General Kamala Harris, alleged that the company had engaged in a number of misleading advertising practices about the quality of its online schools, pushed unfair contracts on public charter partners, and inflated student attendance numbers in order to receive more state funding. It was spurred, at least in part, by a whistleblower report and complaints from educators formerly employed by a California charter network managed by K12. Educators at the K12-managed network moved to unionize in 2014, citing excessive workloads and inability to “effectively advocate for students without the threat of retaliation or job loss.”

An investigative series at the San Jose Mercury News earlier this year concluded that K12’s network of schools “is failing key tests used to measure educational success,” that K12-affiliated “teachers have been asked to inflate attendance and enrollment records used to determine taxpayer funding,” and that the companyexploits charter [and] charity laws for money.” An online education expert explained to The Mercury News that K12 “has shown an inordinate level of failure, yet it’s continually given lifelines by policymakers who have irresponsibly ignored what’s going on.”

Yet the Journal contended that another audit of K12’s management practices “looks trumped up” in a July 17 editorial. Complaining about K12’s settlement with the state of California, the editorial board characterized the investigation of K12 as part of a larger “coordinated assault” on for-profit colleges and education companies and claimed that “Democrats are ambushing” the virtual charter school company. According to the editorial board, the further audit of K12 means “Thuggish government marches on.”

The disastrous results of K12’s schooling model have also been well-documented in media investigations and in research from left-leaning and right-leaning organizations. A New York Times investigation raised red flags about K12’s practices as early as 2011, concluding about the company:

A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed.

Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.

A 2011 Washington Post report singled out K12’s early lobbying efforts and political contributions, pointing to limited data on the effectiveness of virtual charter schools even as the company successfully opened up state markets for its products through political involvement. In 2012, PolitiFact concluded that a Tennessee politician’s assertion that K12’s results were “the bottom of the bottom” was true.

The most recent reports from Mathematica Policy Research, Stanford University’s Center for Research in Education Outcomes, and the Center on Reinventing Public Education concluded that “students of online charter schools had significantly weaker academic performance in math and reading, compared with their counterparts in conventional schools.” BuzzFeed News’ coverage of the reports concluded that “Both Sides Of The Education Debate Are United In Scorn” for online charters like K12 due to “abysmal results” for students.

But K12 has the corporate and conservative credentials to warrant a healthy defense from The Wall Street Journal.

K12 Inc., until recently, called itself a “proud” member of the corporate-driven bill mill American Legislative Education Council (ALEC), which has pushed virtual schools legislation that would create greater demand for products like those produced by K12. K12 has also contributed financially to the Foundation for Excellence in Education, a pro-privatization think tank founded by Jeb Bush that also frequently touts digital learning tools in its policy recommendations. The majority of K12’s executives hail from the corporate world or from other for-profit education companies, and the head of K12’s “curriculum and products organization” previously spearheaded product development at Pearson Publishing.

The Journal has a long history of defending the sometimes indefensible when it comes to for-profit educational companies, often relying on violent analogies to make its point.

The paper stood by shuttered for-profit college chain Corinthian Colleges, even as the company faced multiple state and federal investigations related to its allegedly fraudulent marketing practices and its efforts to facilitate predatory private lending. In fact, the Journal’s editorial board characterized the numerous investigations, launched because of consumer complaints, as “political revenge” by “California job killer” Kamala Harris and a “drive-by shooting” and “contract hit” by the Obama administration. In April 2015, as the company closed its last remaining campuses, The Wall Street Journal wrote a “last rites” editorial lamenting that “the feds and Kamala Harris put 16,000 students on the street.” The now-defunct company has been held legally responsible for its practices, with several investigations and legal actions concluding that Corinthian had, indeed, misled its students about job placement rates and private loan terms, and that former students were owed debt relief.

The Journal has also repeatedly characterized efforts to address these types of fraudulent practices at other for-profit institutions as “regulatory assault,” a “ploy to win over millennials,” a “contract hit” (again), and a political “stealth attack” akin to “drone strikes,” dismissing evidence that these types of schools have taken advantage of veterans and servicemembers, as well as other innocent students, on the taxpayers’ dime.

California’s Charter School Mugging

Politicians punish a company for resisting unionizing its schools.

ENLARGE

Tom Torlakson, the superintendent of public instruction, during a meeting of the State Board of Education, Thursday, July 14, 2016, in Sacramento, Calif.

Photo:

Associated Press


July 17, 2016 6:54 p.m. ET

52 COMMENTS

Our readers know about the coordinated assault on for-profit colleges. Now Democrats are ambushing a fast-growing online education startup that manages charter schools.

The public company K12 operates 70 virtual and blended (online and traditional) schools nationwide, including 14 charters in California. K12 typically contracts with school districts or nonprofit charter organizations to operate schools. Students receive instructional materials in the mail and can log in online at any time to do work. Teachers record lectures, answer questions and assign and grade coursework. Parents of children with special needs or behavioral problems often prefer K12’s flexible format, as do many teachers. The virtual schools also provide options in rural areas with few charter schools.

All of this is anathema to unions, and in 2014 the California Teachers Association (CTA) launched a campaign to unionize K12’s charters. The union claimed the schools saddled teachers with heavy workloads, skimped on instruction—e.g., computers sent to kids weren’t updated—and turned away hard-to-teach students.

The union also flogged low graduation rates and test scores, though many urban public schools do much worse. Many K12 students enroll midyear and are behind on credits when they begin. Students who spend three or more years at the schools score 14 points higher in reading and 19 points in math than those who spend less than one year. The K12 charters don’t cherry-pick or discriminate among applicants, and more than 60% of students are low income.

After K12 challenged the union petition, Attorney General Kamala Harris began a sweeping investigation—one of the first launched by her new Bureau of Child Justice. She alleged that the schools are scamming taxpayers by recording students who log on for one minute as present and misleading parents by advertising the benefits of online education.

But this looks trumped up. In California, teachers at virtual schools record attendance based on educational activities that students complete, not the time they spend online. Like traditional schools, the virtual academies are compensated based on student attendance. Independent auditors approved by the state Education Department haven’t turned up any fraudulent activity in 10 years.

Nonetheless, on June 23 Tom Torlakson, the state superintendent of public instruction, ordered another audit to ensure that K12 schools are “serving their students well.” Five days later the California Public Employment Relations Board certified the CTA and ordered the schools to collectively bargain with the union.

Less than two weeks later, Ms. Harris proclaimed a $168 million settlement with K12, including $160 million in “debt relief” for “nonprofit charities” the company allegedly coerced into “unfavorable contracts that put them in a deep financial hole.” Those “charities” are the same charter schools that she accused of defrauding taxpayers. And the balance sheets of the nonprofit charters and K12 don’t show any debt. K12 typically charges more nationwide than California charter schools receive in per pupil allocations. Each year K12 forgives the difference, which has amounted to $160 million.

To sum up: K12 stays in business, but because it resisted unionization it gets hit with a huge fine and must collectively bargain. If K12 doesn’t accede to the union’s demands, the state Board of Education could use the audit as a pretext to shut the schools down. Thuggish government marches on.

Company with ties to NC virtual school accused of misleading parents in California

Posted 4:53 p.m. yesterdayUpdated 5:57 p.m. yesterday

Raleigh, N.C. — A company with ties to a North Carolina virtual charter school has reached a multimillion-dollar settlement with the state of California over claims it manipulated attendance records, misled parents and overstated the academic progress of students at its online charter schools in that state.

The Virginia-based, for-profit company K12 Inc. has admitted no wrongdoing but will pay $8.5 million to California as part of the settlement.

K12 helped start the North Carolina Virtual Academy, a taxpayer-funded online charter school that launched last year and serves about 1,400 students at any one time. The company provides the school with curriculum and other materials but does not operate the school, according to NCVA’s head of school Joel Medley.

NCVA is governed by a board of directors made up of local community leaders, parents and state educators who oversee academics, staffing and other items for the school. Medley said it’s unfair to compare NCVA to K12-affiliated schools in other states.

“We’re not California. We need to be careful with generalization,” he said, noting that states have different laws and policies for how online charter schools are run. “This has had no impact on us. We’re continuing to do business as normal.”

North Carolina debuted two virtual charter schools last AugustNCVA and North Carolina Connections Academy, which has ties to Pearson, a London-based education company. The schools were launched as part of a four-year pilot program to determine whether virtual charters can succeed in North Carolina.

Their first year has been marked with questions about their high student withdrawal rates. In March, a report to the State Board of Education found that about 500 students, or about 26 percent of those who had signed on to take courses, had withdrawn from each school in the first five months of operation.

Virtual charter school leaders, including Medley, say those numbers are misleading because some students plan to take online classes for only a brief period.

In a letter to state school board members in March, Medley said “higher withdrawals are not a testament to a virtual school’s quality but rather the nature of the online model.” He pointed to virtual schools in other states, including Florida, which he says have higher withdrawal rates.

He urged people to be patient with NCVA.

“With this being a pilot, we’ve got four years. Give us four years,” he said. “Give it time.”

Charter Groups Want More Regulations for Virtual Charter Schools

Posted

By David Safier

on at 4:00 PM

click to enlarge

  • Courtesy of PhotoSpin

Now this is an interesting development. Some prominent charter school organizations have published a report advocating stricter regulations to improve the performance of virtual charter schools, also known as on-line schools. This isn’t an entirely new development. Charter school organizations have been trying to weed out poorly performing schools from the charter ranks, and this is their latest effort. More at the end of the post about the positives and negatives of this push.

Three organizations, National Alliance for Public Charter Schools, National Association of Charter School Organizers and 50CAN, joined together to publish A Call to Action To Improve the Quality of Full-Time Virtual Charter Public Schools. The organizations support virtual charters, but they’ve read the reports about how poorly students at those schools perform compared to students at other public schools and believe the schools should be more carefully regulated.

The facts about the virtual schools in the report look to me to be accurate. A vital bit of information is that 70 percent of the schools are run by for-profit organizations, directly or indirectly, which means the profit motive is going to trump education whenever the two are in conflict. Some other facts: there are 135 full-time virtual schools in the country; 79 percent of their students are in virtual schools with more than a thousand students; virtual school serve more students in poverty and fewer English language learners than traditional public schools.

The report’s recommendations are specific and, if implemented, could doom one of the biggest players, K-12 Inc., a publicly traded corporation (Arizona Virtual Academy, or AZVA, in one of its schools) whose many sins I’ve written about over the years and whose failings are being subjected to increasing scrutiny. The proposal is that enrollment be limited to hundreds, not thousands of students, and if the schools want to grow, they need to meet performance goals. That would be a stake in the heart of K12 Inc. whose profits are based on continual growth and whose stockholders are growing increasingly skittish (its stock is currently trading at about 11, down from a 2011 high of 36). AZVA has over 4,000 students. Another branch, Ohio Virtual Academy, has over 10,000 students. The corporation would crumble if it had to cut its schools’ student populations dramatically.

The report also recommends that virtual schools be funded based on their real costs, another potentialstake in the heart of the for-profit model. Right now, most virtual schools get close to the same per-student state funding as brick-and-mortar schools even though they don’t have physical buildings to pay for and maintain, and their teachers often have twice the student load of teachers in other charters and school districts (A 50-to-1 student-teacher ratio is the standard at K12 Inc. schools). The report estimates that per student costs at virtual schools are 60 percent of the costs at brick-and-mortar schools. Take away their inflated public funding—remember, taxpayers pay for charter schools, just like we pay for school districts—and they lose their profit margins.

It’s good to see charter school organizations actively pursuing some of the bad actors in their midst, and I agree with almost everything I read in this report. However, there’s a bit of a caveat I need to add. When they go after poorly performing charters, their targets are almost always schools with students from low income families. It’s true, some of those schools are doing a lousy job, just like some district schools do a bad job with their low income students, but some charters serving those students do terrific work, even though their test scores are at the low end of the spectrum because of socioeconomic factors beyond the schools’ control. If charter organizations work together with state regulators to carve out the genuinely bad schools, that’s a good thing. However, their motives may not be that pure. Every time a charter with low test scores is closed, regardless of the reason, the average test scores for the remaining charter schools rise. Closing charters serving low income students for any reason, good or bad, can give the charter PR people the kind of undeserved bragging rights they love. “Look at our scores! We’re more successful than school districts,” they can say, even though their higher scores may be a result of serving a different population. The poster child for this type of self congratulation is the BASIS chain which has a variety of ways to screen out academically undesirable students, then brags about its students’ academic achievement. The “education reform”/privatization folks would love to be able to say the same kind of thing about charters as a whole, and the easiest way to do that is to close schools serving low income students.

Charter School Must Pay California Millions

By DON DEBENEDICTIS 

     LOS ANGELES (CN) — The operator of 14 online charter schools in California must pay the state $8.5 million, provide $160 million in debt relief and reform itself to resolve charges of false advertising and using misrepresentations to increase its taxpayer funding.     The settlement should end a July 8 lawsuit the attorney general filed against Virginia-based K12 Inc. and its 14 California schools, and a 2012 whistleblower lawsuit against K12 and its California Virtual Academy @ Los Angeles.     The profit-seeking K12 and its “virtual,” or online, schools, misrepresented their students’ achievements, test scores, class size, individualized instruction and parent satisfaction, the state says in its Superior Court complaint.     All 14 California defendants are named a variation of “California Virtual Academy”: California Virtual Academy @ San Mateo, California Virtual Academy @ Los Angeles, and so on. All 14 are organized as, or operated by, nonprofit California Public Benefit corporations.     “K12 ‘provides substantially all of the management, technology and academic support services in addition to curriculum, learning systems and instructional services’ for the virtual school defendants,” the attorney general says in the lawsuit, without specifying what she is quoting in the interior quotes.     The complaint continues: “The virtual school defendants receive funds from the State of California every year to pay for the education of the approximately 13,000 students attending these schools. Pursuant to the agreements, the virtual school defendants pay significant management and technology fees to K12 based on a percentage of the total funding the virtual school defendants receive.”     The fees include the cost of using K12’s software to take the Internet classes, for which students must pay, despite the defendants’ offer of a free education, according to the state.     Also, K12 et al. advertised that graduates would qualify for the University of California and California State University campuses, though they did not offer classes in several areas required for UC admission, according to the complaint.     At K12’s direction, the 14 schools inflated their daily attendance to collect unjustified funding from the state Department of Education: They credited students with a full day at school for logging in to class for as little as one minute, according to the whistleblower lawsuit.     “All children deserve, and are entitled under the law, to an equal education,” Attorney General Kamala Harris said in a statement. “K12 and its schools misled parents and the State of California by claiming taxpayer dollars for questionable student attendance, misstating student success and parent satisfaction, and loading nonprofit charities with debt.”     Harris put the total value of the settlement at $168.5 million because the agreement requires K12 to expunge about $160 million in so-called “balanced budget credits” the company provided the online schools under their contracts. Harris called the $160 million debt relief.     But in an angry retort, K12’s CEO said the company never sought or expected to collect on the credits, which he called subsidies, not debts.     “The attorney general’s claim of $168.5 million in today’s announcement is flat wrong,” Stuart Udell said in a statement. “Despite our full cooperation throughout the process, the Office of the Attorney General grossly mischaracterized the value of the settlement just as it did with regard to the issues it investigated.”     Udell put the value of the settlement at only $2.5 million: the amount K12 will pay to resolve claims it inflated attendance figures. It will pay another $6 million to cover the costs of the attorney general’s investigation and to fund other “enforcement cases to protect the rights of children” by the office, according to the main settlement document.     K12’s attorneys, Timothy Hatch with Gibson, Dunn & Crutcher in Los Angeles and Peter Wald with Latham & Watkins in San Francisco did not respond to requests for comment. Neither did the attorney for the charter schools, Paul C. Minney, with Young, Minney & Corr in Sacramento.     K12 did not admit wrongdoing or liability in the settlement, but it had been under fire for some time. In addition to the attorney general’s months-long probe, the California Department of Education was monitoring it, and the San Jose Mercury News published a series of investigative stories on it this spring.     The case began with a whistleblower lawsuit filed under seal in 2012 by a teacher from the California Virtual Academy @ Los Angeles. Susie Kaplar claimed she had been fired for refusing to pad her attendance figures. Because she filed the suit on behalf of the state, the attorney general’s office was able to take it over and bring its own suit.     The settlement agreement for her lawsuit includes the $2.5 million payment on attendance data. Under state law, Kaplar should collect an undisclosed portion of the settlement. She also will receive $80,000 in damages and attorneys’ fees.     Kaplar’s attorney, J. Mark Moore in Canoga Park, did not return a call seeking comment.     The California Charter Schools Association, which usually supports charter operators, praised the attorney general’s actions.     “CCSA condemns the predatory and dishonest practices employed by K12, Inc. to dupe parents using misleading marketing schemes, siphon taxpayer dollars with inflated student attendance data, and coerce [the nonprofit schools] into dubious contracting arrangements,” the association said in a statement.     It also endorsed legislation pending in Sacramento to prevent for-profit companies from controlling or operating charter schools.