Education — April 4, 2012 at 12:11 pm

Cyber schools: A for-profit model designed to destroy our public school system & benefit corporations


Class, may I have your attention please?

Republicans in Michigan are pushing forward with an effort to remove the cap on so-called “cyber schools” (also known as “virtual schools”) in our state. Already passed in the Senate as Senate Bill 619, it has been reported out of the House Education committee and will be voted on in the near future.

It is nothing more than a diversion of taxpayer funds intended for education into the coffers of for-profit corporations.

Cyber schools enjoy all the financial benefits of traditional “brick and mortar” schools without the need to supply busing, athletics, meals, arts and music, etc., much less an actual physical building with its upkeep and maintenance. This means they get the allotment of over $7,000 but don’t have to spend it on much of the overhead incurred by our public school districts. This, of course, means big profits for the companies that run them.

S.B. 619 removes the requirement that students in cyber schools previously enrolled in public school and does not require them to offer all grades between kindergarten and 12th grade. Although the law requires cyber schools to demonstrate experience delivering a quality education program, the legislation does not define what this actually means, leaving it open to interpretation.

These online schools will not save the state money. In fact, the House Fiscal agency’s analysis (PDF) says just the opposite:

By eliminating or lessening a number of restrictions on cyber schools, including expanding the cap on the number of cyber schools and enrollment in cyber schools, the bill would likely result in an increase in State School Aid Fund expenditures as the number of cyber charter schools proliferates and the enrollment in cyber schools rises.

The American Federation of Teachers puts the price tag at $7.2 billion.

Not surprisingly, the push for cyber schools is being bankrolled by companies that will benefit the most from the profits that come with them. The biggest of these is a company called K-12, Inc. In 2011, K-12, Inc. made a whopping $522 million in profits — $336 per student. A recent article in The Nation titled “How Online Learning Companies Bought America’s Schools” puts it this way:

Despite the clear conflict of interest between her lobbying clients and her philanthropic goals, [lobbyist Patricia] Levesque and her team have led a quiet but astonishing national transformation. Lobbyists like Levesque have made 2011 the year of virtual education reform, at last achieving sweeping legislative success by combining the financial firepower of their corporate clients with the seeming legitimacy of privatization-minded school-reform think tanks and foundations. Thanks to this synergistic pairing, policies designed to boost the bottom lines of education-technology companies are cast as mere attempts to improve education through technological enhancements, prompting little public debate or opposition. In addition to Florida, twelve states have expanded virtual school programs or online course requirements this year. This legislative juggernaut has coincided with a gold rush of investors clamoring to get a piece of the K-12 education market. It’s big business, and getting bigger: One study estimated that revenues from the K-12 online learning industry will grow by 43 percent between 2010 and 2015, with revenues reaching $24.4 billion.

The effort to shift taxpayer money from public schools to private, for-profit cyber schools is being helped along by the American Legislative Exchange Council (ALEC) which has a coordinated, 50-state strategy, offering templates for legislation/bills for what it calls “The Virtual Public Schools Act”. According to The Nation article, the department responsible for this work is headed up by an executive from Connections Learning, another for-profit company offering online learning.

So what about cyber schools? Do they work? Evidence suggests not. The New York Times recently did a seminal piece about cyber schools, focusing largely on K-12, Inc.

By almost every educational measure, the Agora Cyber Charter School is failing.

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.

By Wall Street standards, though, Agora is a remarkable success that has helped enrich K12 Inc., the publicly traded company that manages the school. And the entire enterprise is paid for by taxpayers. […]

Kids mean money. Agora is expecting income of $72 million this school year, accounting for more than 10 percent of the total anticipated revenues of K12, the biggest player in the online-school business. The second-largest, Connections Education, with revenues estimated at $190 million, was bought this year by the education and publishing giant Pearson for $400 million.

More from The Nation:

A recent study of virtual schools in Pennsylvania conducted by the Center for Research on Education Outcomes at Stanford University revealed that students in online schools performed significantly worse than their traditional counterparts. Another study, from the University of Colorado in December 2010, found that only 30 percent of virtual schools run by for-profit organizations met the minimum progress standards outlined by No Child Left Behind, compared with 54.9 percent of brick-and-mortar schools. For White Hat Management, the politically connected Ohio for-profit operating both traditional and virtual charter schools, the success rate under NCLB was a mere 2 percent, while for schools run by K12 Inc., it was 25 percent. A major review by the Education Department found that policy reforms embracing online courses “lack scientific evidence” of their effectiveness.

Finally, from a January 18th, 2012 Detroit Free Press article titled “Virtual Schools lag other public schools’ performance” that has mysteriously disappeared from their website (cached HERE), we have this:

The report by the National Education Policy Center says 27% of for-profit companies operating virtual schools met the adequate yearly progress standards of the federal No Child Left Behind law. K12, Inc. operates … Michigan Virtual Charter Academy. Of the 39 virtual schools that K12 operates that received an AYP rating in 2010, 13 met the standards. Connections Academy, based in Baltimore, operates the … Michigan Connections Academy. Nationwide, 27% of its virtual charters met the standards.”

Given these facts — high profits coupled with poor performance — it’s hard to draw any conclusion other than that this is an effort that is being pushed through in an aggressive manner by those who stand to profit the most from the siphoning off of public funds, taxpayer revenues, to for-profit corporations.

Unsurprisingly, there is a strong effort to defeat this legislation in Michigan and across the country. In Michigan, the Michigan Education Association, American Federation of Teachers and labor groups have gotten involved.

Fran Brennan, the Michigan State Director of Working America, a labor coalition fighting S.B 619, writes this:

Working America is a non-profit community organization and began representing Michigan working families in 2008. Our organizers have had conversations with your friends and neighbors, resulting in over 98,000 people becoming committed members of Working America in Michigan! We are proud to listen and give a collective voice to over 3 million people nationally.

In the past few weeks, Working America began informing people about the Cyber-School legislation being considered in Lansing. Our organizers have knocked on over 3,000 doors resulting in over 1,700 conversations generating hundreds of calls to their legislators. Resoundingly, when our organizers provided concrete examples of how the Governor and the Majority Party at the legislature are undermining the education system in Michigan—our members responded with disbelief, anger, and even disgust and were easily inspired to make the call.

As Working America member, Michele Gaw said, “My kids could learn a bunch of facts on a piece of paper easily. But how are they going to learn other important things like working with others, making friends and other social interactions that you can get in a regular school?”

As the vast majority our members have expressed, the greatest gift we can give our children is a good quality, well-rounded education, and Cyber-Schools are not the solution, but rather, the solution is increasing funding to all our community schools.

For these and many more reasons, we are asking you to CALL YOUR STATE REPRESENTATIVE to defeat Senate Bill 619.

You can listen to an interview with Fran Brennan from this morning on First Shift with Tony Trupiano HERE.

For more reading on this, I highly recommend two linked pieces above as well as this one by a parent with students in the Ann Arbor Public Schools system: “Getting clear about “profit” in our public schools”.

Now is the time to act to stop this well-funded theft of taxpayer money by private, for-profit corporations. Call your House representative today and tell them to vote NO! on Senate Bill 619. If you need help finding out who they are or how to contact them, visit this helpful website: Michigan House of Representatives.

  • Why does private industry have to mess up what my family has found to be a GOOD thing? I’m in CA and my 10th grade son is using my employer’s non-profit Virtual High School to re-mediate an F he received in his 1st semester English class. He’s doing it while completing his 2nd semester courses at his main high school. Over the summer, he will use VHS to fill in gaps in classes not offered in a logical sequence at his high school. This will enable him to be on track to take up to 4 AP classes in 11th grade. We’ve found the VHS class to be quite rigorous, but perhaps that’s because it is being essentially run by a 4 year college? 
    Anyhow – just a lament at how something that could be quite valuable gets messed up when people try to make a profit off of it. I certainly see the problems with what they are trying to do in Michigan. 

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  • CB_Demented

    You know it’s not just Republicans pushing for more virtual school availability right? At least not nationally. The educational industry itself is pushing for it as well, and it’s a logical outgrowth. It’s been being used by hospital homebound kids for a few years now, and the educational establishment has seen the potential and is moving forward full throttle with it. We’re now offering virtual schooling through state mandate here and it’s being done in house. We provide the entire infrastructure.

    As to evidence it doesn’t work well sometimes…well, there’s a large amount of evidence public schools don’t work well too, but we aren’t abandoning them either, nor should we. There’s a large number of factors to consider, and any program, whether in a brick and mortar school or over the web, will put out crap product if it isn’t very carefully constructed and maintained.

    And yes…there is profit to be made doing this. I challenge you to check out just how much profit is made selling things to brick and mortar schools. Look up some of the larger curriculum companies like America’s Choice and see how much per student they’re getting.


  • Bill Cole

    The real problem with “cyber-schools” is that they get farmed out to scam operators like K-12 Inc. whose business is making money, not educating students. Entangling the idea of online education with the train-wreck of for-profit charter schools is a mechanism for expanding the conversion of government from a provider of public goods and operator of public institutions into a machine for funneling money from taxpaying citizens to corporate managers and shareholders.

    I have been an advocate for online education literally since I was an elementary student myself and it was considered a crazy sci-fi concept and the Internet was a DARPA toy. There are sound arguments for expanding online education grounded in the fact that kids learn in different ways and at different paces that can’t all be served optimally by the traditional classroom model and in the problem of needing a critical mass of students to justify specific classes at the high school level. I was very fortunate to have attended a very well-funded public school system that could afford to hire and keep highly-trained and highly-skilled teachers to handle classes as small as 5 students in advanced levels of unpopular subjects like Chemistry, Calculus, and a half-dozen foreign (and/or dead) languages. Most schools cannot do that, and it was only feasible for some in the past because of the inequitable funding models of the time. Cyber-schools are often pitched as the ultimate solution to critical mass and individualized curriculum issues, but they are bundles of failure  in areas that traditional schools handle reasonable well, such as the non-coursework skills of following a schedule, working with peers and supervisors (i.e. teachers), and general functioning as social beings. It is also a fact of our society that physical schools serve critical roles in the function of our society, providing adult supervision for children so that parents can hold jobs, being a point of contact for kids who need help beyond their parents, and even assuring that kids have access to basic nutrition. 

    Rather than creating “cyber-schools” in a way designed to dismantle public education, we should instead be trying to get schools to leverage modern technologies where they can address some of the real problems schools have with educating all of their students well.  That might end up reducing the number and nature of jobs in schools, but it also might mean that teachers can be more focused on their areas of interest and be able to find stable jobs that are highly motivating. The point of educational reform shouldn’t be to preserve unionized teaching (or other) jobs and it shouldn’t be to demolish the public education system for profit-driven or ideological purposes. The point should be to educate more students well and fewer students poorly. 

  • James_UT

    Funny, my son (11) received a letter from the Governor last year for getting in the top 5% of test results for the State of Utah.  He attended Washington Online, which uses K12.  I guess either Utah public schools are really, really bad, or this article makes K12 sound a heck of a lot worse than it is.

    •  That’s a pretty bad measuring stick. Outliers exist everywhere. Congratulations, your made up son is exceptional. Well done. That doesn’t change the facts.

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  • Does anyone think that cyber schools can prosper, whether it be public or private? With proper reform could tax payers save money by replacing failing brick and mortar schools with cyber schools whether they be public or private. This is something that has been on my mind, and I just started my research. Naturally this piece concerns me as it destroys my hypothesis.

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