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K12 logoThe Wall Street sharks who want to buy up our public education system do not appear inclined to go away quietly. After being rebuffed by state education officials and failing thus far to get what they want in the courts, K-12, Inc. (the troubled, for-profit, “virtual” charter school company) has turned to what it undoubtedly expects will be a more hospitable  forum — the General Assembly.

As N.C. Policy Watch reporter Sarah Ovaska reported yesterday afternoon, K-12 lobbyists have prevailed upon a state lawmaker to enter legislation that would put the company on the path to open its proposed online charter in North Carolina. For people who care about public schools, this should be a very worrisome development. This is from Ovaska’s report: Read More

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K12, Inc., the for-profit online virtual school company that made a bid to open up a statewide school in North Carolina, plans on settling claims that it misled investors.

The proposed settlement would not require the company to admitting wrongdoing, butK12a would pay investors $6.75 million, according to a preliminary settlement draft in federal court records and obtained by Education Week.

Education Week reports that the lawsuit’s claims about academics and quality would be dismissed and the settlement would stick to allegations about how the company disclosed information about student enrollment and retention.

The investor lawsuit came after a series of negative attention and press accounts questioning whether K12, Inc. (NYSE: LRN) was more focused on profits than educational quality. The lawsuit itself claimed that top officials of K12, Inc. misled the public and investors by downplaying questions about the schools’ educational quality. (Click here to read more about the lawsuit’s initial filing.)

The company has the largest share of the online schooling market, running public schools in 30 states where students from kindergarten through high schools take classes through programs on their home computers while parents act as “learning coaches.”

The company prides itself on offering alternatives to families seeking alternatives for their local school systems, but schools run by the company have low graduation rates and performance outcomes. In Tennessee, where legislators approved the virtual school in 2010 after concerned push from K12 lobbyists, state education officials have found only 16 percent of the 3,200 students in the K-8 program performed at grade level in math.

The company had made a push to open up a statewide virtual charter school in North Carolina in 2011 and 2012 by partnering with Cabarrus County Schools (which would get a kickback for agreeing to host the virtual school) but the State Board of Education, which authorizes charter schools in the state, did not consider its application. The matter is now held up in the appeals court.

Since then, the State Board of Education passed a more stringent application process for virtual charter schools, cutting back on the per-student reimbursement and requiring that graduation rates are within 10 percent of the state average (which is up to 80 percent).

N.C. Learns, non-profit organization put together by the company filed a letter of intent that it intended to apply to open for the 2014-15 school year, but did not submit an application by Friday’s deadline, according to a list of 70 prospective charter schools kept by the N.C. Department of Public Instruction.

(Another online company, Connections Academy, did submit an application to open up a statewide virtual school in the fall of 2014. Connections is owned by Pearson, an international education company (NYSE:PSO).)

K12 could still get a chance to educate North Carolina students (and get a slice of North Carolina public education funding). Legislation creating virtual schools could appear this year, with top state leaders like Gov. Pat McCrory expressing interest in the virtual school.

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Here’s another tidbit about K12, Inc., the publicly-traded company trying to open up a virtual charter school in North Carolina.

K12, (NYSE:LRN), the largest virtual education company in the nation, spent $21.5 million in the first eight months of 2012 advertising the online public charter schools it operates in 29 states, according to an article that ran yesterday in USA Today. (My colleague Chris Fitzsimon also made mention of that in his Friday Follies column today).

That’s a decent amount to spend on advertising, especially considering that 85 percent of the company’s revenue comes from public sources. Click here to read more about the ad buys, and how USA Today calculated the estimates.

Lots of ads ran on kid-friendly media outlets, including Nickelodeon, The Cartoon Network and MeetMe.com, a social media site used by teens (and tweens).

The company also may be trying to tap into the disaffected youth market – it spent $3,000 to advertise on VampireFreaks.com, which bills itself as “the Web’s largest community for dark alternative culture,” according to the USA Today article.

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K12, Inc., a for-profit virtual education company looking to open a statewide virtual school in North Carolina, took a fairly major hit yesterday on Wall Street when a stocks analyst downgraded the company’s performance outlook.

A Wells Fargo analyst took the stock from a favorable “outperform” stock rating Monday to a more neutral rating of “market performance” based on ongoing questions being brought up about the quality of education it offers at Colorado Virtual Academy, according to KUNC, a public radio station in Colorado.

The company (NYSE: LRN) has the largest reach of for-profit online providers in the country, and runs virtual public schools in 29 states. Students from kindergarten to 12th grade can take their entire school curriculum from their home computer, at the expense of public taxpayers.

The Colorado online school had a graduation rate of just 12 percent in 2010. To compare, North Carolina’s statewide graduation rate topped 80 percent for the first time last year, a number that political leaders of all stripes say is still too low.

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N.C. Learns, the group behind a proposal for a virtual charter school, plans on appealing a Wake Superior Court judge’s order that put the school’s plans on indefinite hold.

The school would have been run by K12, Inc., a Wall Street-traded educational company that gets most of its revenue from public dollars for online-only schools it runs in more than two dozen state around the country.

Wake Judge Abraham Jones ruled on June 29 that the state board didn’t have to review an application  submitted by the online-only school, and overturned an administrative judge’s decision to grant the school permission to open.  (Click here to read a past story about the case.)

N.C. Learns, a non-profit whose start-up costs are being paid for by K12, Inc., is appealing Jones’ order to the N.C. Court Of Appeals, according to a notice of appeal filed in the Wake County Courthouse July 27.

The N.C. School Board Association and the N.C. Justice Center joined the state board in opposing the virtual charter school, arguing that school districts around the state would have their funds depleted for an online-only school with questionable performance in other states. (N.C. Policy Watch is a project housed under the N.C. Justice Center, an anti-poverty statewide advocacy group.)

The appeal is also seeking to overturn Jones’ decision to allow the school board association from intervening in the case, according to the notice written by state Sen. Fletcher Hartsell, who was hired to serve as the attorney for the proposed virtual school.

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