ALEC and the Invisible Schools with Invisible Success

From a report titled Invisible Schools, Invisible Success

Virtual schools are popular because they are profitable. Estimates show that “revenues from the K-12 online learning industry will grow by 43 percent between 2010 and 2015, with revenues reaching $24.4 billion.”

More than 200,000 K-12 students are enrolled in full-time virtual schools across the country; when expanded to all students enrolled in at least one course, the number explodes to 2,000,000. The more children enrolled in virtual schools, the greater the profit for the companies.
In December 2004, the American Legislative Exchange Council (ALEC) approved the “Virtual Public Schools Act.” That model bill sparked a rush by private companies to embrace virtual schools and virtual learning across the country. Today, there are more than 230 nationwide accredited private virtual schools in the country.
ALEC is closely tied to the virtual school movement, having pushed its “Virtual PublicSchools Act” on behalf of corporate members of its board since 2005. The law was adopted by ALEC through the work of its Education Task Force,comprised of corporate lobbyists and conservative legislators. According to the Center for Media and Democracy’s website, ALEC Exposed, two of the three co-chairs on ALEC’s Education Task Force work directly for virtual school companies

  • Mickey Revenaugh, Co-founder and Senior VicePresident of State Relations for Connections Academy,a virtual school company; and
  • Lisa Gillis, Director of Government Affairs and SchoolDevelopment for Insight Schools, part of K12 Inc.

K12 is one of the largest virtual school operators in Ohio. The Ohio Virtual Academy, represent about 26% of K12′s annual revenues. We've previously demonstrated that virtual schools in Ohio are manufacturing profits at the expense of education, primarily by packing their virtual classrooms. These packed virtual classrooms have a significant effect on students

–OVA enrolled a total of 18,743 students cumulatively throughout the 2010/2011 school year with 9,593 withdrawing by the end of the year, for an astoundingly high churn rate of 51.1%

"[…]these cyber schools might as well have a turnstile as their logo for the volume of withdrawals they experience.", noted one researcher.

To highlight the emphasis K12 puts on profits above education, comes this leaked email from their CFO in Pennsylvania

An April 23, 2010 e-mail from Kevin Corcoran to a host of his colleagues is likely the sort that, in one form or another, millions of Americans deal with regularly during the work day.

Bluntly noting “We have not made the progress we need to in this area,” Corcoran adds, “More than $1[million] in funding” is in the balance.”

“Anyone who has not fulfilled their obligation in this area should not be surprised….when it’s time to discuss performance evaluations, bonuses and raises.”
In the e-mail, Corcoran, who is Agora’s financial chief, was miffed because 81 “IEPs,” short for individualized education programs–basically customized teaching plans for Agora’s growing populace of special education students–hadn’t received the necessary signatures; without them, various school districts would not release reimbursement of $15,000 per pupil (or higher) to Agora, and thus K12, to educate a student populace that have had profound troubles meeting educational expectations.

More concerned about bonuses and raises, than the fact that students have outstanding IEP's that are not being addressed. This is part of the educational mess ALEC has and continues to try to create.

4 reasons educators must get in the game and fight ALEC

We mentioned some of the radical education policies ALEC was seeking to push in up coming legislative sessions, here are 4 reasons educators must get in the game and fight ALEC

  1. ALEC puts the profits of corporations before the welfare of students. Virtual schools and for-profit charters do NOT do all that a neighborhood school can do—so why does its Virtual Public Schools Act insist those corporate ventures should receive the same public funding?
  2. ALEC thinks its corporate members know better than your community how to run your schools. A common theme throughout ALEC education bills is to reduce local control of parents and democratically elected school boards.
  3. ALEC would have you giving more standardized tests. When they say they want to” apply marketplace standards” to education, they mean they want to increase the reliance on standardized testing to judge student and teacher performance.
  4. ALEC thinks corporations deserve “a voice and a vote” (their words) more than U.S. citizens do! Although it has disbanded its highly controversial Public Safety and Elections Task Force, the damage has been done: an estimated 5 million eligible voters will have a more difficult time exercising their right to vote in the 2012 election.

For more on how you can get invovled, you can go here.

Virtual schools, virtually useless

Michael Morrison, writing for Decisions Based on Evidence, brings to our attention some recent reports on the failures of virtual schools (or e-schools) in places other than Ohio. Here's findings from Colorado

Minnesota is also finding similar problems

“While the number of course registrations has quadrupled over the last few years, full-time online students have become less likely to finish the courses they start. Course-completion rates for full-time online students dropped from 84 percent in the 2006-07 school year to 63 percent in 2009-10. During this period, several individual online schools experienced large and steady declines in course-completion rates, while only one program showed significant improvement.”

And in Pennsylvania, K-12 Inc.’s Agora Cyber Charter School's results are terrible.

Nearly 60 percent of its students are behind grade level in math. Nearly 50 percent trail in reading. A third do not graduate on time. And hundreds of children, from kindergartners to seniors, withdraw within months after they enroll.

We've mentioned K-12 Inc. before and noted they are Ohio's fastest growing virtual school provider. It appears there is a two fold reason why K-12 is Ohio's fastest growing, a reason that might also indicate why academic performance isn't so stellar. Stephen Dyer at 10th Period notes from K-12's financial filings

In fiscal year 2011, we derived approximately 13% of our revenues from each of the Ohio Virtual Academy and the Agora Cyber Charter School in Pennsylvania. In aggregate these schools accounted for approximately 26% of our total revenues. If our contracts with any of these virtual public schools are terminated, the charters to operate any of these schools are not renewed or are revoked, enrollments decline substantially, funding is reduced, or more restrictive legislation is enacted our business financial condition and results of operations could be adversely affected.

Dyer concludes

This means the laws in Ohio and Pennsylvania are so beneficial to online schools that one of the nation's biggest operators cannot exist without those laws remaining in place. As we reported last year at Innovation Ohio, Ohio Virtual Academy had a 51:1 student-teacher ratio, and this is on top of them getting enough state money to have a 15:1 student-teacher ratio and give $2,000 laptops to every child while still clearing 31.5% profit. In fact, they spend barely 10% of their money on teachers -- easily the lowest percentage of any of the major statewide eSchools. That means 90% of their $59 million in state money they got last year went to things other than teachers. But they don't have buildings, custodians, lunch ladies, or buses to maintain. So what where could the remaining $53 million in Ohio taxpayer money be going?

It would be a shame if K-12's milking the Ohio taxpayer to subsidize their other operations, as their SEC filing indicates it's doing.

An even greater shame that thousands of Ohio's virtual school students are being short changed a quality education at the expense of next quarters financial report.

Failing students, falling stock prices, and investor law suits

We've discussed the sorry state of Ohio's virtual schools before, and noted that for-profit virtual school operator K12 is the fastest growing in the state

Despite taking $58,944,956 from the state to run their Virtual academy, and despite packing their classrooms at a student teacher ratio of 51:1, their stock price has been falling rapidly

Shares of online education provider K12 Inc. LRN +1.86% were down 4% Wednesday, touching a one-year low earlier in the session at $20.29 after declining sharply on Tuesday. A New York Times article this week said that one of K12's main charter schools frequently failed to graduate students on time, and fell short of grade-level standards in math and reading.

Now the company is being sued by shareholders for being misleading

A shareholder in Virginia-based K12 Inc. has filed a lawsuit against the virtual-schools operator in federal court, alleging that the firm violated securities law by making false statements to investors about students’ poor performance on standardized tests.
The lawsuit comes after a spate of national news stories — including in The Washington Post — raised questions about the effectiveness of virtual schools, K12’s in particular. The firm’s stock has since plummeted.

Key among those stories was a New York Times investigation published Dec. 12 that found a mismatch between K12 student achievement and statements made by chief executive Ronald J. Packard.

During one investment conference call, the Times reported, Packard said that test results at one of the company’s largest online schools — Agora Cyber Charter — were “significantly higher than a typical school on state administered tests for growth.”

In fact, the article said: “Weeks earlier, data had been released showing that 42 percent of Agora students tested on grade level or better in math, compared with 75 percent of students statewide. And 52 percent of Agora students had hit the mark in reading, compared with 72 percent statewide. The school was losing ground, not gaining it.”

Despite failing students, falling stock prices, and investor law suits, K12, Inc. CEO Ronald J. Packard earns a windfall

Ronald J. Packard, the chief executive of Herndon-based education company K12 Inc., earned a total compensation package worth $5 million in fiscal 2011, according to an amended annual report filed Thursday with the Securities and Exchange Commission.

That’s nearly twice the $2.67 million Packard earned in 2010. It includes $551,000 in cash, $4.2 million in stock awards and about $290,000 in other compensation.

A awful lot of that fat paycheck came out of the pockets of Ohio tax payers, and some complain about teachers pay.

Packed Virtual Classrooms

Later today, Apple will unveil its plans for digital textbooks.

Steve Jobs described textbooks as an '$8 billion a year industry ripe for digital destruction', in conversations with his biographer Walter Isaacson.

Given how much dead tree weight students have to carry around, and how expensive textbooks have become, this is an area ripe for a solution. But as Apple lays out its plans for capturing some of the profits to be had from education, likely with an innovative technology based solution, corporate education reformers have set their sights on using technology to capture profits in an altogether different way.

The Fordham Foundation recently released a paper titled " Creating Sound Policy for Digital Learning, A Working Paper Series from the Thomas B. Fordham Institute. The piece begins

Online learning, in its many shapes and sizes, is quickly becoming a typical part of the classroom experience for many of our nation’s K-12 students. As it grows, educators and policymakers across the country are beginning to ask the question: What does online learning cost? While the answer to this question is a key starting point, by itself it has limited value. Of course there are cheaper ways to teach students. The key question that will eventually have to be addressed is: Can online learning be better and less expensive

At that point the paper descends into the usual rote corporate ed stuff, using anecdote to try to capture the costs and quality of virtual education. The total lack of innovative thought is captured in their first graph.

You will clearly note that it is not technology driving the savings, but instead the slashing of spending on educators. The entire difference between a traditional model and virtual model is in the category of faculty and admin expenditures. Stephen Dyer, at his new blog "10th Period", points out that actual e-school spending in Ohio follows this exact model

Over at Innovation Ohio, I helped write and research a report that pointed out Ohio pays these major eSchool operators enough money for them to provide 15:1 student:teacher ratios, $2,000 laptops and still clear about 30% profit.

However, they don't do that. On average, they have 37:1 student:teacher ratios. Ohio Virtual Academy (run by the infamous, national for-profit K-12, Inc.) has a student:teacher ratio of 51:1, if you can believe it. Anyway, of the $183 million Ohio's taxpayers sent to these eSchools last school year, the schools spent a grand total of $27.5 million on teacher salaries, or about 15% of its money.

E-schooling as envisaged by corporate education reformers doesn't rely upon any technological innovation as a means to deliver high quality education, they use the virtual nature of the model to obfuscate the fact that class sizes can become huge. It's hard for a parent to know their child is crammed in to a packed class with 50 other students if he is sat alone in his bedroom. What you don't see, won't hurt, right?

It's never explained how a teacher can deliver quality to such large classes, in a situation where the virtual nature of the classes already make it naturally more difficult and challenged.

We know from facts certain that Ohio's e-schools are appallingly bad. Even the Fordham Foundation itself found e-school to be terrible

Perhaps before we even begin to consider cost, we ought to sort out the very serious problems we have with quality. What does it matter how cheap something is, if it is not fit for purpose? One might even argue, with tongue not so firmly planted in the cheek that Ohio's e-schools are breaking consumer laws

In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties irrespective of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.