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Hearing on N.C. virtual school opening scheduled for Monday

A Wall Street-run online charter school is on the verge of opening this fall, unless attorneys for the state education board can get a Wake Superior Court judge to stop the charter school from opening.

A hearing scheduled for Monday morning in Raleigh’s Wake County Courthouse will pit the interests of K12, Inc. and N.C. Learns, the non-profit formed to house the school, against the N.C. Board of Education and more than half of the state’s public school boards. The N.C. Justice Center, the anti-poverty non-profit that houses N.C. Policy Watch, has filed an amicus brief in the case, in opposition to the virtual charter school.

An administrative law judge ruled in May that the N.C. State Board of Education acted improperly by not reviewing the North Carolina Virtual Academy’s application upon receiving it this February after the Cabarrus school board’s gave the proposed statewide school preliminary approval.

In exchange for sponsoring the virtual charter school, the Caburrus school district was promised free use of K12, Inc. online products, as well as a 4 percent cut of the public education funding the virtual charter school anticipates receiving.

The virtual charter school backers argue that they have a right to open the school because of procedural mishap by the state education board. Meanwhile, state education officials plan on arguing that the controversial form of education hasn’t been vetted enough to warrant taxpayer money flowing through to a company with mixed reviews.

The K12, Inc., (NYSE: LRN [1]) has good reason to want to do business in North Carolina,where the company hopes to recruit 2,750 students in its first year and take in $18 million in federal, state and local education dollars in its first year.

Taxpayer-sourced dollars are where the company gets its profits.

More than 80 percent of its $522 million worth of the company’s revenue in 2011 came from running online-based public schools, according to the company’s 2011 annual report. It runs publicly-funded virtual schools in 29 states, as well as the District of Columbia, and may pursue offering virtual pre-K as well, according to its CEO Ron Packard made in a recent investor’s call.

But while the company has successfully cornered a large piece of the virtual education market, the company’s school hasn’t necessarily performed well in all states.

In Ohio, where the Ohio Virtual Academy has been run by K12 since 2002, only 30 percent of the school’s ninth graders graduate within four years, according to the school’s 2010-11 cohort graduation rate [2], which is adjusted to account for students that leave to attend other schools.  It plummets to 12.2 percent for black students. The Colorado Virtual Academy had an even lower four-year graduation rate – 12 percent overall, and 9.1 percent for black students, according to the state’s education department [3].

To compare, North Carolina’s statewide cohort graduation rate is 77.9 percent, dropping to 71.5 percent for black students and 68.8 for Hispanic children — all levels that has been decried as in need of improvement by state leaders of all political stripes.

K12 officials explain away those graduation rates and testing scores by saying that they take in students that are worse off academically than most, and were far behind in their schoolwork by the time they come to the online school.