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home : • politics : • government
January 27, 2020

11/19/2014 4:08:00 PM
Eye on Augusta: Commission Approves Second For-Profit Charter School
(Illustration by Hanji Chang)
(Illustration by Hanji Chang)
by Andy O’Brien

Last week, the Maine Charter School Commission (MCSC) voted 6-1 to enter into contract negotiations with a controversial online "virtual charter school" co-founded by former banker Ronald J. Packard and convicted junk bond trader Michael Milken. The Maine Virtual Academy (MEVA), which will contract for its online education platform with Virginia-based K12 Inc., will serve about 300 students across the state in grades 7 to 9 starting in the fall of 2015. MEVA plans to expand its enrollment to 750 students in grades 7 to 12 by the 2019-20 school year.

Maine law allows up to 10 charter schools, which are publicly funded, privately managed education institutions that are exempt from the oversight of local school boards. Unlike brick-and-mortar schools, virtual schools allow students to take online courses from their home computers and communicate with teachers via email, telephone and Internet chat. Parents act as "learning coaches" to oversee students. Supporters of virtual schools say they are particularly suitable for students who don't fit in at public schools either because they are advanced learners or have been bullied.

"Online schools are an important education option, although they are not for every student," said former superintendent and MEVA board member Beth Lorigan in a press release. "They require a high level of student engagement and persistence to succeed. For students willing to work hard, they will find our school to be a place where a team of committed educators are ready to help them achieve their goals."

However, the funding model, a subpar academic record, lack of accountability, and the profit-driven nature of the virtual school industry has fueled a backlash against virtual schools in recent years. Under the current rules, local school districts are required to pay about $8,000 to $9,000 per year in tuition for each student in the district that chooses to attend a charter school. There are currently six charter schools in Maine, which have enrolled nearly 900 students. A third of charter school students in the state log on to Connections Academy, another virtual school, run by British multinational Pearson. So far, Maine school districts have been forced to funnel $5 million this year to the state's six charter schools with no input from local school boards. Approximately $2 million of that sum has been paid to Connections Academy.

While the volunteer governing board of MEVA is considered "nonprofit," the actual "school" is run by K12 Inc., a publicly traded company led by former XM Satellite Radio CEO Nate Davis. Unlike public schools, which have a superintendent, MEVA will be run by its own "CEO." The commission rejected previous MEVA applications out of concerns that K12 Inc. had too much control over hiring decisions and school management. Under its revised application, the board of directors will hire the cyber teachers.

Green Lighting K12 Inc. Amidst Numerous Concerns

Although the commission voted to move forward with the proposal, its Review Team offered mixed reviews of MEVA's application. In a report released on Oct. 10, the team praised MEVA for its potential to meet the needs of rural populations and some students who are bullied. It noted that the staff will live in Maine, individual student learning plans will be created to address various needs of students, and the school's requirements for graduation exceed the state minimum.

However, the review team expressed several concerns about MEVA's proposal, including low staffing levels, low teacher salaries and a lack of face-to-face interaction. The report pointed out a lack of sufficient quality control based on hiring, orientation and professional development practices. It also noted that MEVA's graduation requirements are based on acquiring course credits with "little reference to future proficiency requirements." The report also raised questions about MEVA's ability to serve special-needs populations such as those with learning disabilities and English language learners. The team cited a lack of financial details in the application, about transportation and instructional equipment, for example.

"At times, budget detail as presented is difficult to understand," the report stated.

A spokesperson for MEVA did not respond to an interview request for this story.

According to the Maine Education Association, the state's teachers union, there's no reason why the state needs to contract with a for-profit corporation for an online school.

"The private for-profit virtual education model is great for investors but bad for kids," said MEA President Lois Kilby-Chesley in a statement. "The state should take charge of virtual learning and run its own virtual school that puts students first."

According to the MEVA application, K12 Inc. will directly receive about 45 percent of the approximately $9,000 it will receive in tuition for each student. The MEA, which advocated for legislation to create a state-run virtual school last session, pointed out that New Hampshire operates its own non-profit virtual school at only $5,500 per full-time student.

Empirical evidence also suggests that K12 Inc. students fall behind their public school peers. A 2012 study by the National Education Policy Center (NEPC) at the University of Colorado found that for-profit virtual schools only graduated 38 percent of their students on time, compared to 79 percent in traditional public schools and 86 percent in Maine. Another study by the Center for Research on Education Outcomes (CREDO) at Stanford University concluded that virtual-school students fared "significantly worse" than students in traditional charter and public schools.

Yet another 2012 study, by researchers at Western Michigan University's National Education Policy Center, found that fewer than a third of virtual schools achieved adequate yearly progress (AYP), the measurement for academic performance mandated by the federal No Child Left Behind Act, compared to 52 percent for the nation's brick-and-mortar schools.

K12 Inc. schools have also had difficulty keeping track of whether students are even logging on and "attending" school. In 2011, Colorado auditors found that a K12-run school had overcharged the state by $800,000 for 120 students who never attended, according to The New York Times.

"Our findings are clear," said Gary Miron, an NEPC fellow, in a written statement. "Children who enroll in a K12 Inc. cyberschool, who receive full-time instruction in front of a computer instead of in a classroom with a live teacher and other students, are more likely to fall behind in reading and math. These children are also more likely to move between schools or leave school altogether - and the cyberschool is less likely to meet federal education standards."

In recent years, the subpar performance of K12 Inc. schools have led other states, including Tennessee, Colorado and Pennsylvania, to either sever ties with or reconsider their support for the virtual schools. Earlier this year, the NCAA even announced that it would not accept academic credits completed by student athletes at two dozen virtual schools operated by K12 Inc. at any Division I or Division II college or university.

Despite empirical evidence about its lackluster performance, K12 Inc. remains profitable, reporting revenues of $916.6 million from 2013 to 2014. Compensation for K12 Inc. executives totaled over $21 million in 2013. The Center for Media and Democracy labeled former CEO Ronald Packard one of the highest paid "government workers" in the U.S. It's a distinction earned by others in the privatized public services industry, which includes private prisons, waste management, water companies and other infrastructure. Unlike public schools, virtual schools also spend a substantial amount of money on political lobbying and advertising. K12 Inc. spent $26.5 million on advertising in 2010, according to an analysis prepared for The New York Times by Kantar Media.

At the same time, K12 Inc. has been the target of a number of lawsuits, including litigation brought by investors accusing the company of misleading shareholders about business practices and exaggerating student performance. The company agreed to pay out a $6.2 million settlement to stockholders last year.

And in spite of MCSC's concerns about MEVA's application, political pressure to approve virtual schools has been great. In January 2013, after the commission turned down four charter applications, including one from MEVA, LePage called for the resignation of commission members who voted no.

"I am asking [the commissioners] for the good of the kids of the state of Maine, please go away. We don't need you. We need some people with backbones," LePage said.

Failed Efforts to Rein in Virtual Schools

Over the past two years, Democrats in Maine's Legislature have submitted several bills to put tighter controls on virtual schools, but all of them were vetoed by Gov. LePage. One bill, sponsored by Rep. Matthea Daughtry (D-Brunswick), would have required charter schools to be non-profit. Although the Legislature passed that bill, the governor vetoed it.

"Rather than follow the lead of other states and accept public charter schools as an option, some are focused on preventing their establishment," wrote the governor.  "The way to fix education is not by throwing more money at the problem or by letting students' ZIP codes determine their destiny."

The commission has stated that K12 Inc.'s contract should stipulate MEVA can terminate its contract with K12 Inc. for any reason. However, given that K12 Inc. is the entity that initiated the proposal in the first place, it remains to be seen how aggressive the board will be in keeping the corporation accountable to taxpayers.

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