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NC virtual charter operator coughs up $168 million settlement in California case

Virtual charter schoolsHere at Policy Watch, we’ve reported extensively on the struggles of North Carolina’s two virtual charter schools.

Both schools—run by for-profit, education groups K12 Inc. and British-based Pearson—have been besieged with skyrocketing dropout rates in their first year of operation.

Yet state lawmakers moved in this year’s budget to include new relaxed restrictions for the schools, prompting fresh criticism from some traditional school advocates.

Now comes this report out of California, where state authorities have reached a reported $168.5 million settlement with K12 Inc. , which runs the controversial N.C. Virtual Academy, over claims that the company “manipulated attendance records and overstated its students’ success” in California, according to The Mercury News in San Jose, Calif.

From the Mercury News report:

The deal, announced Friday by Attorney General Kamala Harris, comes almost three months after the Bay Area News Group published an investigation of K12 Inc., a publicly traded Virginia company, which raked in more than $310 million in state funding over the past 12 years operating a profitable but low-performing network of “virtual” schools for about 15,000 students.

“Knowing that something will be done to address the schools’ problems is very reassuring,” said Gabriela Novak, who pulled her daughter Elizabeth from K12’s San Mateo County school after a year of frustrations and difficulty communicating with her teachers. “Finally, the system is working.”
 Harris’ office found that K12 and the 14 California Virtual Academies used deceptive advertising to mislead families about students’ academic progress, parents’ satisfaction with the program and their graduates’ eligibility for University of California and California State University admission — issues that were exposed in this news organization’s April report.
The settlement could help spur legislation that would prevent for-profit companies like K12 from operating public schools in California.
Supporters of virtual charter programs say they provide an option for students who struggle in traditional school settings, but virtual charters nationwide have been plagued by questions about dropouts and poor academic performance.
A Stanford University study of virtual charter academics last fall concluded that students in the online programs trailed their peers in traditional schools by as much as a full academic year.
More from The Mercury News report on virtual charters:
The Attorney General’s office also found that K12 and its affiliated schools collected more state funding from the California Department of Education than they were entitled to by submitting inflated student attendance data and that the company leaned on the nonprofit schools to sign unfavorable contracts that put them in a deep financial hole.
“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 said in a statement. “This settlement ensures K12 and its schools are held accountable and make much-needed improvements.”
The California Teachers Association and the California Charter Schools Association both applauded Harris’ announcement and denounced the company’s practices — even though the two special-interest groups are frequently foes.
More to come this week at Policy Watch.

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