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K12, Inc. gets turned down for virtual school by appeals court

A state appeals court found that a proposed online charter school to be run by a Wall Street-traded education company K12, Inc. did not have an automatic right to have its application considered.

The court’s decision puts a halt to any plans to open the virtual charter school, with no applications currently pending with the N.C. Department of Public Instruction.

In an order issued today in the case, N.C. Board of Education v. North Carolina Learns, the three-judge appeals court panel backed the prior rulings made by former Wake Superior Court Judge Abraham Jones that the State Board of Education (SBOE) acted properly when, in 2012, it didn’t act on an application submitted by the online school.

“NCVA [North Carolina Virtual Academy] argues that the SBOE was required to act before the 15 March deadline and thus lost its ability to act by failing to meet the deadline,” N.C Appeals Court Judge Wanda Bryant wrote in the opinion. “We disagree.

“[I]t is clear that the SBOE had no duty to review or otherwise further act on NCVA’s virtual charter school application,” she wrote.

To read the entire appeals court opinion, click here.

North Carolina, unlike most states, doesn’t have any virtual charter schools that allow students to remotely take school classes through home computers. The state does run the North Carolina Virtual Public School, which offers individual online classes to school districts.

K12, Inc. is the nation’s largest provider of online education and runs charter schools in more than 30 states. Traded on Wall Street, the company (NYSE:LRN) reported $708 million in revenue in 2012, with 84 percent earned from running public schools, according to the company’s 2012 annual report.

The company has faced growing criticism in recent years for its profit-centric model of operation that critics say results in students being poorly served by the online schools.

N.C. Learns, a non-profit shell set up to house the N.C. Virtual Academy, had argued in the appeals case that it should have had its application considered by the State Board of Education in 2012, after it received preliminary approval for the statewide school from a single school board in Cabarrus County.

In exchange for giving the controversial online school preliminary approval, the school district stood to get a kickback of 4 percent cut of the online school’s total public education funding, estimated to be as high as $18 million in its first year if the company managed to hit its own projections of attracting 2,750 students statewide.

But the State Board of Education, the entity that governs all public education in the state, declined to consider K12’s application for final approval. An administrative law judge initially granted the school permission to open, but the Wake judge’s ruling in 2012 over turned that.

 

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