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Two for-profit companies vying to tap into public education funding streams and enroll thousands of North Carolina children into virtual charter schools will be in front of a state education committee tomorrow.

K12 logoA special committee designated by the State Board of Education to review virtual charter school applications will meet from 10:30 a.m. to 1 p.m. Wednesday on the seventh floor of the state Education Building, 301 N. Wilmington Street in Raleigh. Audio of the meeting, which is open to the public, will also be steamed here.

The full State Board of Education, responding to the state legislature’s creation of a pilot program for virtual charter schools, will meet in  January to decide if the online schools can enroll students – and receive public funding – for the 2015-16 school year.

Virtual charter schools teach students from kindergarten through high school through classes delivered through children’s home computers. Parents or guardians often serve as “learning coaches” to assist with lessons while teachers remotely monitor students’ attendance and performance.

North Carolina’s legislature opened the door for two virtual charter schools to open next August when it tucked a provision in this summer’s budget bill that created a four-year pilot program for two online-based charter schools to open by August 2015.

The country’s virtual education market happens to be dominated by two companies, K12, Inc. (NYSE:LRN) and Connections Academy, a subsidiary of Pearson, an educational publishing company also traded on Wall Street (NYSE: PSO). Both companies employed lobbyists in North Carolina last year.

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Tennessee’s education commissioner has ordered the closure of a struggling K12, Inc.-operated online school, as lawmakers here at home debate a budget proposal that could pave the way for K12 to finally set up shop in North Carolina.K12 logo

Tennessee Virtual Academy began operating in 2011 and struggled to produce positive academic results from the get go, according to The Tennessean. Three years of low student growth at the K12-managed school prompted Kevin Huffman, Tennessee’s education commissioner, to order the school’s closure at the end of the 2014-15 school year.

K12, Inc. has a history of producing low performance and graduation rates across the country, most recently prompting the NCAA to announce that it will no longer accept coursework from 24 virtual schools that are affiliated with the company.

The company has also been compared to subprime mortgage lenders, pulling in and churning out a disproportionate amount of students who are not well prepared for the online learning model–all in the name of big profits from taxpayer budgets.

A spokeswoman for K12, Mary Gifford, told members of a study committee considering virtual charter school options here in North Carolina that the poor results simply reflect the fact that their company tends to attract low performing students, and the home-based system of education can do little to help that demographic.

“High school is a nightmare,” Gifford told the virtual charter study group in February. “Forty percent of the students in high school will be very successful.”

K12, Inc. has been trying, unsuccessfully so far, to land in North Carolina, and is currently waiting on the state Supreme Court to hand down a decision on their appeal to open a virtual charter school in the state.

Meanwhile, lawmakers have acted on the recommendations of a virtual charter school study committee and have inserted language into the proposed 2014 budget to direct the State Board of Education to establish a Virtual Charter School Pilot Program, which would authorize the operation of two virtual charter schools serving students in kindergarten through 12th grade beginning in the 2015-16 school year.

The provision would allow the virtual charters that show positive academic outcomes to become permanent institutions at the discretion of the State Board, without having to go through a formal application process.

There does not appear to be criteria set forth in the proposed legislation for how the State Board of Education should vet and select the two virtual charter schools that would take part in the pilot program.

Notably, at least 90 percent of all teachers employed by the virtual charter schools must reside in North Carolina.

To read the virtual charter school study committee’s report to the legislature, click here.

To read the language for a virtual charter school pilot program in the state budget proposal, click here and read section 8.35.

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A for-profit online education company will be at the legislature tomorrow to give a pitch to lawmakers about the virtual public charter schools it runs, and profits from, in more than 30 other states.

An executive from K12, Inc., a Wall Street-traded company that gets the bulk of its revenue from running online public schools, is slated to make a presentation Tueaday at the Joint Legislative Education Oversight committee. The hearing begins at 10 am. Tuesday in room 643 of the Legislative Office Buildling.

(Steaming audio of the meeting will be available here, and a copy of the commitee’s agenda is here.)

Mary Gifford, the company’s senior vice-president for education policy scheduled to speak to lawmakers, also spoke last week in front of a virtual charter school study group assembled to craft recommendations for the State Board of Education of how the online-only schools should operate in North Carolina.

At that meeting, Gifford acknowledged low graduation and performance rates K12,Inc.-run schools have had in other states, saying that the company’s schools tend to attract low performing students and the home-based system of education can do little to help those high-school students.

“High school is a nightmare,” Gifford told the virtual charter study group last Tuesday. Forty percent of the students in high school will be very successful.”

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North Carolina or other states opening up online charter schools should put enrollment caps and other limits to ensure focus is kept on quality education and not profits, a board member of Colorado online charter school said recently.

“We’re not interested in being the biggest,” said Brian Bissell, the board chair of the Colorado Virtual Academy (COVA), an online school that recently moved to distance itself from the for-profit K12, Inc. that ran the school. “We want to deliver a high quality education.”

The Colorado Virtual Academy, one of the largest online-based schools run by K12, Inc , decided this month to take back the school management functions from the Wall Street-traded online education company that runs public charter schools around the nation.

Bissell, whose three children attend the K12-run school, spoke with N.C. Policy Watch about why the board decided to scale back its relationship with K12 and gave some advice for states that have yet to see the controversial school option open.

North Carolina doesn’t currently have any online, or virtual, full-time schools, which allow students from kindergarten through high school to take their entire caseload through online interactions with teachers through their home computers. The state-run North Carolina Virtual Public School allows students around the state to take individual classes online, either to catch up with their peers or take advanced classes not offered in their home counties.

K12, Inc. is a national leader in the online education industry, but has been criticized for methods that critics argue aggressively putsprofits over quality and doesn’t serve students well. K12, Inc. defends its business, saying that the online option works for many families and that the low academic standings are partly attributed to a population of students that come to K12 at academic disadvantages. Read More

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The Colorado Virtual Academy (COVA) recently broke off its future school management relationship with K12, Inc., a for-profit company that runs virtual public schools around the nation.

Online schools allow students to take their full course load from home computers, and K12 has been a national leader, with close to 85 percent of its revenues coming from public education dollars.

The Colorado charter school’s board of directors decided recently to part ways with the company’s hands-on school management for the 2014-15 school year, according to this article from a Colorado public radio station, KUNC. The school will still use K12-developed coursework and K12 will continue to run the school in 2013-14, according to KUNC.

From KUNC:

Brian Bissell, head of the COVA board, confirmed the change Tuesday. It will go into effect during the 2014-2015 school year. COVA has struggled with poor academic performance in recent years amid questions about K12 Inc.’s management of school resources—including teacher understaffing.

Bissell, who is a K12 Inc. shareholder and has three children enrolled in COVA, says that the school could still use K12’s curriculum but says school leaders have decided that new management is the best option.

“It became clear that at certain points in COVA history the interests of COVA—that is our students and their families, their teachers and Colorado’s taxpayers—these have not always been aligned with K12’s interests,” he said.

The Colorado school has been criticized for its low graduation rates (22 percent in 2011-12, according to state education statistics) and a discovery by state auditors that the school had overcharged $800,000 for 120 students who never attended, weren’t Colorado residents or whose enrollments couldn’t be verified, according to this in-depth 2011 New York Times article.

K12 spokesman Jeff Kwitowski said COVA is continuing to use K12, Inc. to manage the online school in 2013-14, and took issue with the idea that COVA was backing off from its use of the company.

From an email Kwitowski sent N.C. Policy Watch after this post’s initial publication:

We presented a self-management option to COVA Board so they could assume full management and operational control of the school next year, but they declined.  They wanted K12 to manage the school next year and use K12’s curriculum. Furthermore, they wanted the new agreement to state that if they received a new charter, a relationship with K12 would continue.  They voted to ratify the agreement.  In short, they didn’t “dump” K12, they stayed with K12.

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