So, I’m working on this meta-synthesis of the virtual schooling literature project with Cathy Cavanaugh and Tom Clark. We have paper presentations at AERA and NECC on this topic and hope to turn it into a manuscript (and maybe a VSS presentation, well proposal first). Anyway, this has got me back into some older literature that I haven’t used in a while, so I didn’t make any immediate connections to the Wisconsin situation.
The Cyber Charter Challenge
A new trend could lure thousands of students
and millions of dollars away from school districts
By Glenn Cook
Having weathered many of education’s passing fads, Sylvester Small was not surprised by the choice movement. Small, a second-year superintendent who has spent his entire 31-year education career in Akron, Ohio, estimates that his district now loses $8 million to $9 million a year to charter schools, home schools, and private and parochial schools.
“When it comes to choice,” he said matter of factly, “we’ve got it all in Ohio.”
But even Small was caught off guard by the latest twist in the choice movement: taking charter schools into cyber space. And he’s not the only one. School districts in Ohio, Pennsylvania, and 23 other states are trying to catch up to a trend that has the potential to lure thousands of students and millions of dollars away from them.
A rash of unexpected bills from cyber charters to unsuspecting school districts has led to a flurry of lawsuits and new legislation in Pennsylvania. Ohio’s lawmakers are considering a bill that would put a moratorium on all charters for two years. Meanwhile, enrollment is growing so quickly that Small’s district has already lost more than $320,000 to the Electronic Classroom of Tomorrow (eCOT), a cyber charter that is promising to cap the number of students this fall at 3,500.
“This whole thing is moving so fast that it’s caught everybody by surprise,” said Small, whose 30,000-student district is working with a consortium to form its own cyber charter. “A lot of public school districts had to react out of protection for their own well-being. That’s what we’ve done.”
THE ‘ULTIMATE UNSCHOOL’
Cyber charters, like their bricks-and-mortar brethren, are a curious amalgam of home schools, for-profit companies, and public school districts that cater to parents seeking a choice. Where they differ from traditional charters is in their reach — across district boundaries, from one end of a state to another — and their approach.
Using public money, the charters provide students with a computer, a curriculum, online and hardbound texts, and Internet access — all free of charge. The student works at home, with or without a parent’s supervision, and communicates online or via teleconference with the teacher.
“It’s kind of the ultimate unschool — we don’t know what they’re doing,” said Stuart Knade, general counsel for the Pennsylvania School Boards Association (PSBA). “They’re experimenting with kids’ lives on the public dollar.”
Barbara Stein, a senior policy analyst with the National Education Association, said cyber charters are “closer to facilitated home schooling than to a quality public education.” As such, she noted, they contradict much of the intent behind the recent No Child Left Behind Act, which requires public schools to have highly qualified teachers.
“The government says it’s OK to call this a public education when you have a person with none of this training working at home to educate a student,” Stein said. “That’s not public education.”
Students schooled at home are a key market for cyber charters. The no-cost, structured curriculum — provided by for-profit companies such as William Bennett’s K12 — appeals to parents who don’t want their children to attend a traditional public school but aren’t sure they can properly instruct the kids at home.
“I am not an educator,” said Cindy Baird, whose son is a fourth-grader at eCOT. “I was trying to do a home school, but I wasn’t sure my son was working at the right level because I wasn’t working from a fixed curriculum.”
JUMPING IN WITH BOTH FEET
The Toledo-based eCOT, which bills itself as the first statewide K-12 cyber charter in the country, opened in late 2000 and has been joined by about 30 others in a dozen states. Today, 25 states permit cyber charters, compared to the 37 that allow traditional charters.
Pennsylvania, with seven cyber charters, is the leader. But Ohio is close behind with four, and Bennett’s company is helping a fifth get off the ground this fall. Enrollment in these two states alone is projected to top 30,000 in the next few years. The potential for growth, especially in a largely unregulated environment, is unlimited.
That scares public education supporters like Darold Johnson, legislative and political coordinator for the Ohio Federation of Teachers. He said questions about accountability, standards, and financial practices raise a “whole series of concerns” that should be answered legislatively before cyber charters are allowed to operate.
“It’s strange, because instead of going slow and figuring all of this out, we’ve jumped in with both feet and just let everything fly,” said Johnson, whose organization is suing to overturn the state’s charter school law. “The legislature sees billions of dollars going to education, and the corporate world says, ‘How can we get [our] foot in the door?’ It seems that’s all they think about. How can we make the bottom line work?”
Akron’s Small likens the boom in cyber charter start-ups to the recent flurry of dot.coms, many of which went belly-up.
“You’re going to see a bunch of these schools start up, then there’s the period of mass confusion we’re in now,” he said. “But there will be a period where the states make adjustments to the laws, and then you’ll have a few private providers with some quality.
“Sooner or later, quality is what’s going to count. A lot of things start up, but quality is what counts.”
THE WILD WEST
David Serratore and his fellow board members in the 3,400-student Wallingford-Swarthmore School District in southeastern Pennsylvania are concerned about quality and the bottom line. This year, trustees have put aside $170,000 from the district’s $41 million budget to pay for students who attend traditional and cyber charter schools. Holding out that money, especially in a tight budget year, means the board is faced with cuts in other programs, Serratore said.
“I don’t believe we’ll use that much,” he said, “but the potential is truly there.”
Pennsylvania has been one of the leading states in the choice movement, and Serratore said he believes the charter school laws are fair. Cyber charters, he said, are a different story because the proper oversight has not been in place.
“If cyber charters are held to the same standards that public schools are held to, I wouldn’t have a problem with this at all,” Serratore said. “If state legislatures force them to maintain and follow the same laws and regulations as the public schools in the state, I say that’s fine. But they’re not doing that, and they’re taking money from us.
“We’re left holding the bag of laws, and they’ve been left holding the bag of money without the laws or strings attached.”
This was especially true in the spring of 2001, when school districts across the state started receiving bills from the Einstein Charter Academy and the Western Pennsylvania Cyber Charter School, among others. The Pennsylvania School Boards Association sued, claiming that online schools do not have the right to exist as cyber charters, and school districts refused to pay for the students they had lost. In all, more than 300 districts refused to pay $10 million in bills they received from the two schools.
The move backfired when Charles Zogby, the state’s education commissioner, started withholding funds from the districts to pay the cyber charters. Districts were not allowed to appeal Zogby’s decision, which led to further litigation.
“It’s been the Wild West here, really,” said Stuart Knade, PSBA’s general counsel. “When these things began, there really wasn’t any type of statutory authority for a public school to be [operated] on a virtual basis. There has been a real absence of any authorization for these things or standards for what they are trying to do.”
In January, Zogby withheld $3.5 million in tuition payments from Einstein after parents complained that they were missing computers they had been promised and not receiving special education services. That decision also landed in Pennsylvania’s Commonwealth Court, and Zogby paid Einstein only after the charter’s founder — Mimi Rothschild — left the school and new management was brought in.
Other challenges to the state’s cyber charters are pending, but some resolution has been reached. In June, the Commonwealth Court ruled against PSBA, saying the state’s cyber schools are legal, but several regulations have been subsequently put in place.
Legislation passed since the ruling requires the online schools to go through Zogby’s office — not a local district — to get a charter. When tuition disputes arise, Zogby will review them to see if they are credible before money is withheld from districts. In addition, legislators approved a plan to reimburse districts for up to 30 percent of the approximately $2,000 per student they lose when a student decides to attend a cyber charter.
“Because of administrative inaction, this whole experiment was allowed to take place without any budgeting for it and without any studies to see if it would work,” Knade said. “The legislation makes it less of a Wild West, but it still falls short of what needs to be done.”
ENROLLMENT QUESTIONS PERSIST
One of the biggest sticking points for cyber charters and school districts is enrollment. When a student signs on to attend a cyber charter, districts are charged based on a portion of their per-pupil expenditures. The bills can range from $5,000 to $15,000 per child, depending on the services provided.
Cyber charters use the money to provide the tools the students need — computers, software, textbooks, scanners, and printers — and the teachers who work with them. But because they don’t require extensive facilities and don’t provide other traditional school services — such as food service, transportation, or extracurricular activities — cyber charters can become very profitable very quickly.
Take Ohio’s for-profit eCOT, which reported a first-year loss of almost $4 million, then turned a $1 million profit in its second year. Part of the first-year loss was due to a $1.6 million settlement with the state over enrollment figures, and company founder Bill Lager admits that his school grew too fast.
“We discovered very quickly that we had to create the rules as we go along,” Lager said. “It was literally an accounting nightmare that occurred overnight.
“We built our infrastructure to grow at a rapid pace, and we could go to 7,000 students, but we want to step back and focus on curriculum, teacher involvement, and field trips to increase socialization for our students,” he said, noting eCOT has 5,000 to 6,000 students on a waiting list. “Our goal is to maintain the best system, best curriculum, and best teachers that we can.”
Lager said eCOT needs the full per-pupil cost for every child — about $5,500 in Ohio — to maintain its intranet network. He said cyber charters that use a Web-based curriculum “cost half as much and may be getting more revenue than they need.”
“The World Wide Web is an open, uncontrollable environment,” Lager said. “You are hurting these kids if you put them on the Web without a security system. There has yet to be a filter that will screen children from going to sites that are undesirable.”
But public school officials and representatives at the TRECA Digital Academy disagree, saying Lager and other for-profits are in business to make money and serve a niche group comprised predominantly of home school students. TRECA, which is part of a consortium of 48 public school districts, says the potential profit margin per dollar of revenue ranges from 36 cents for high school students to 54 cents for elementary school children. The digital academy enrolled 700 students last year and is expected to grow by more than 100 in 2002-2003.
Lager counters that only 10 percent of eCOT’s enrollment comes from traditional home schools, and that is primarily in the elementary grades.
“We have never marketed our idea to any one demographic,” Lager said. “Our philosophy is that we will be available to any child eligible from age 5 to 22 in Ohio. Our goal is to find ways to take the education to the children wherever they are.”
A PUBLIC APPROACH
TRECA shares that goal, but the regional service center is taking a different approach. The consortium’s aim, according to Superintendent Mike Carder, is to help school districts start up their own charter schools. Districts that join TRECA sign a three-year contract, build their own digital school, and then leave the consortium. All profits are returned to the public schools.
TRECA, by all accounts, is taking the right steps. No student is admitted to the cyber school without a computer, printer, scanner, and Internet connection. All parents sign an acceptable-use policy and have regular communication with a teacher.
“Our goal educationally is to bring public schools into the arena of online public education,” said Josie Drushal, director of TRECA Digital Academy. “It’s something that’s coming, and they need help doing it. We don’t believe the bricks-and-mortar school is for everybody, or that the digital online school is for everybody. We’re looking for a marriage between the two.”
Akron joined the growing consortium in May, and Small, the district’s superintendent, said it’s time to stop looking at online education defensively and start recognizing it as an enhancement to the district’s current program.
“People get the idea when you do things like this that you’ve found a magic bullet, but it’s just another alternative we have to examine,” Small said. “We see it as an alternative to meet the needs of some kids, not everyone.”
Glenn Cook is managing editor of American School Board Journal.
A lot of similarities between the concerns expressed here in Ohio and Pennsylvania, and what we see happening in Wisconsin.
The second item that caught my attention is actually a profile of the Wisconsin Virtual Academy that was written as a part of an evaluation piece four years ago. The actual piece is:
I have re-produced the profile below.
Case Study: Northern Ozaukee and the Wisconsin Virtual Academy (WIVA)—Competition or Cannibalization?
While Lake Mills was still considering linking with K12, in October 2002, William Harbron, Superintendent of the Northern Ozaukee, Wisconsin, school district, contacted K12. He advised that if K12 was still looking in Wisconsin, he might be interested. Paul Thallner, K12’s manager of school partnerships, flew to Wisconsin and spoke to the Northern Ozaukee School Board. Less than a week later, the Board adopted the K12 curriculum. Twenty-four hours after that, K12 and Northern Ozaukee launched a marketing campaign for the Wisconsin Virtual Academy (WIVA). 40
The quick start was necessitated in part because the Board’s approval of K12 coincided with the start of Wisconsin’s open enrollment period. Wisconsin law provides a three-week period in which students may enroll in school districts other than the one in which they live. From the campaign, WIVA received 1,100 initial applications, but only 455 enrolled, leaving WIVA short of its 600-student target. K12 hopes to use parents who enrolled their children in 2003-2004 as marketing tools in the future, a tactic that the Appleton, Wisconsin, Connections Academy claims is useful (Connections Academies are virtual schools operated by Baltimore-based Sylvan Learning Systems, Incorporated).
Under the agreement, for each child enrolled in WIVA, the state takes away about $5,500 from the school district and awards this money to WIVA. In 2003-2004, Northern Ozaukee kept five percent of the $5,500 as an administrative fee. In 2004-2005, the fee drops to four percent and is three percent thereafter. At 455 students enrolled, WIVA brings an additional $125,125 to the district. Resident students in 2003-2004 numbered 849, with other open enrollment students bringing the total to 879.
Some districts have lost nearly as much. Waukesha District, for instance, had 33 students enter WIVA, a net loss of $181,500.
As a consequence, Waukesha launched its own venture into virtual learning “as a business decision to recoup our losses.”41 Assistant Superintendent Heidi Laabs reported that she had seen many “high quality” programs at a recent Virtual High School Symposium in Anaheim sponsored by eClassroom, a division of eCollege, located in Denver. The District decided to go with one of them, KC Distance Learning, Inc., (KCDL) of Portland, Oregon, a subsidiary of KinderCare Learning Centers, Inc., and a high school, iQ [sic] Academy, will open in the fall.
Waukesha brought forward $400,000 for marketing, and KCDL expects to spend $1.1 million “up front.”42 In the three-week open enrollment period which ended February 20, 2004, Waukesha-KCDL spent $300,000 on radio ads, direct mail and billboards. Wisconsin Connections Academy in Appleton spent $90,000. WIVA declined to say how much it had spent. Northern Ozaukee Superintendent Harbron was quoted as saying, “We just told people to disregard the glitz and glamour of the marketing.”43
For the 2004-2005 school year, the new iQ high school received 396 applications, lower than the goal of 500, but considered encouraging by Waukesha officials given the short time iQ has existed. Wisconnections received 717 applications, while WIVA obtained 889. 44
Other districts are reportedly considering virtual schools. The specter of cannibalization, of one district taking students from another district, is there. It is perhaps limited. Under Wisconsin’s Open Enrollment Law, if a student’s departure from a district poses significant financial hardship to that district, the application to attend another district can be rejected. Typically to date, such rulings have attended expensive instances of special education.
It is not clear what proportion of the money K12 that receives becomes profit. K12 has established a firm to “manage” K12, “K12 Management, LLC.” An LLC—Limited Liability Corporation—is not subject to the same freedom of information laws as regular corporations. In fact, the existence of K12 Management LLC makes it impossible to determine who actually owns K12, Inc: all inquiries stop at the LLC. The LLC has only one employee, Charles Zogby, a vice president. The LLC does not, however, pay Zogby—K12, Inc provides his salary.
The profit margin would appear to be high. According to S. V. Date of the Palm Beach Post, K12 charges rent on the computers in the amount of $1,200 a year. Date says that in 2004, people could buy the same computer in Best Buy or Walmart for no more than $500.45
The Wisconsin Education Association Council (WEAC) has filed suit.46 It earlier lost a similar suit against Appleton Connections Academy, which WEAC has appealed. WEAC argues that the virtual schools violate Wisconsin’s open enrollment and charter school law. It contends that because the costs of operating a virtual school are less than those of a brick and mortar school, K12 will reap windfall profits. It also contends that the virtual academy establishes a charter school that operates largely outside the district’s boundaries, that the majority of the academy’s instruction is not provided by certified teachers but by parents, and that non-resident students do not receive educational services within the boundaries of the district.
K12’s site refers to K12’s curriculum as “rich,” “world class,” and even “proven,” which it certainly is not. The site claims:
We searched the world’s educational systems and found the most effective content and techniques to create our curriculum. The K12 curriculum is designed to help you meet or exceed national and state standards. A K12 education is comparable or superior to an education provided by the nation’s best private and public schools. 47
Some find these claims spurious. Said a Wisconsin parent, “Look at the sample lesson plan for K12. It’s very Pavlovian. Young kids are being encouraged through technology to run a maze, ring a bell, and eat the cheese.”48
Although this parent actually means to refer to operant rather than Pavlovian conditioning, the message is clear: the curriculum is not interesting and it promotes a one-size-fits-all approach. The instruction is mechanical and the system does not encourage creativity. Since the K12 curriculum borrows heavily from the Core Curriculum developed by E. D. Hirsch, Jr. at the University of Virginia, one would expect it to be heavily fact-based.
Elliot Soloway of the University of Michigan reached a similar verdict: “In the 21st century, they’re delivering a 19th-century curriculum.” Soloway pointed to the typical worksheet-style computer lessons that use brief bits of animation and sound effects as “rewards” and pointed out that they were hardly revolutionary.49 Similarly, a review of K12’s elementary history curriculum by Susan Ohanian finds that company’s use of technology primitive.50
Two years later, Soloway remained unconverted, commenting, “the educational philosophy is still, under it all, very much a teacher-teach, student-remember type of model. I find that model too limiting; it doesn’t help develop creative problem solving skills, which is what we must do.” 51
In previous entries on this topic I’ve used the phrase poaching students for profit. Seems that was one of the original intentions, or at least conclusions of this external assessment.
Also, note the original court case brought against the virtual charter schools. I’m not sure if they are connected to the case that the appeals court recently decided upon, which is the cause of all of this unrest.
