k12

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.
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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.
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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.”
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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.

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.
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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.