While this article is almost a month old now, it caught my attention from somewhere today:
PreK-12 Dominates Growth in E-Learning – THE Journal
This article reminded me that I had this entry (or at least links and images that I wanted to turn into an entry) saved to come back and finish at a later date – and I guess this is that latter date. The line that particularly caught my attention in this article was:
“by 2015, preK-12 academic institutions in the United States will spend $4.9 billion on “self-paced” electronic learning products and services, according to a new report released this week by research firm Ambient Insight.”
In the next four years, the amount of money spent on self-paced electronic learning – including the database-driven online learning programs often marketed to credit recovery students – will be almost $5 billion in the United States. One of the reasons this struck me was because of one of the blog entries I had saved for this entry, written by a business analyst, entitled Plato Learning No Expert in Making Profits. This is potentially a $5 billion industry, yet this business analyst doesn’t believe this provider of database-driven K-12 online learning (among other things) doesn’t have the potential to make a profit or as much profit as it should. Is there something wrong with this picture to you?
But this is just a small piece of the corporate environment within the K-12 online learning landscape. This graphic from the 2010 Keeping Pace in K-12 Online Learning report is useful for describing the overall situation:
If we just examine the “Education Management Organizations” or what most of us would describe as the folks who administer the vast majority of cyber charter schools. Unfortunately, the only one we can really look at is K12, Inc. – and that is because they are a publicly traded company. You can actually look at their stock and other public information under the letters LRN on the New York Stock Exchange. If we look at the performance of these two bodies (i.e., the New York Stock Exchange and K12, Inc.) over the past 12 months, and I used twelve months because the New York Stock Exchange graphic would only go back 12 months.
If you do some basic math you’ll see that the New York Stock Exchange had a little over 32% increase, while K12, Inc. increased by almost 74%. I mention this, not to pick on K12, Inc. but to use them as an example of what I see as the larger issue.
If you look at the budgets for these cyber charter providers (at least in states where they are required to post public budgets), it is difficult – if not impossible to figure out how much of this increase in stock prices can be attributed to profits made from their administration of cyber charter schools? I discussed this very issue previously, or most recently, in Funding Virtual Schools – Michigan Edition.
I mention this here again today for a variety of reasons. K-12 education in general is big business, as there is a lot of money involved. K-12 online learning is similarly big business. However, for some – myself included – I’m not comfortable with a state or school district simply handing over 93% to 97% of the per pupil funding for each student to these for profit cyber charter companies with only this amount of information available. If we had a better understanding of the funding model, how it works, and what kinds of profits these companies are making on the per pupil funding; some people – myself included – may be a bit more comfortable with this form of K-12 online learning and the funding models that are used.
It is this understanding or transparency that may prevent the fear that comes when I see things like this scroll through my Twitter stream:
In instances like this, my concern is for the students – both in terms of whether they are receiving an equitable education to their brick-and-mortar counterparts or, as my colleague Chuck would think about, how much better an education could these students have receive had ALL of that money gone directly to their schooling?