Deeper look at K12 Inc.

We have mentioned the for-profit cyberschool company K12 Inc. in passing before (at least here and here).  Although K12 Inc. had been operating in Michigan, it wasn't clear that it had a huge number of students or that it was marketing heavily here.  It's now clear that K12 Inc. is making a massive marketing push in Michigan, so we want to tell you more about this company.  In short, even if the concept of cyberschools was something worth consideration, K12 Inc. has a track record of shoddy instruction, poor oversight, and rampant misuse of public funds.

Cyberschool operated by K12 Inc. is exactly what it sounds like - instead of going to a school with other children and a teacher, the child works from a computer at home.  Because K12 Inc. operates as a charter school in Michigan, each child K12 Inc. signs up as a customer means it gets to charge the state that child's per pupil allowance.  So, instead of that public money - tax dollars - going into a public school in our communities, those tax dollars go to this for-profit company which was trading at 31.07 on the NYSE as of August 9, 2013. Yahoo Finance.

It is almost certainly true that there is a niche of students who might benefit from an alternative school setting.  But K12 Inc. isn't marketing to a niche of students.  It's marketing to every student.  We previously took K12 Inc.'s quiz to tell us whether K12 Inc. was a good fit for a hypothetical child.  We described a special needs child who is happy in school, and who needs structure but with parents unwilling to provide it.  The quiz told us "K12 is an excellent option for your and your child."  In fact, we couldn't come up with any combination of answers that produced any other response.  Online schools rapidly expanding, spending tax dollars on marketing. Okemos Parents for Schools, July 26, 2013.  But whether or not what K12 Inc. does could be a good idea in theory, we know that it is producing terrible results and has been plagued with scandal everywhere it has operated in the country. 

Last year a former K12 Inc. teacher, Melony Black, spoke about her experience working for K12 Inc. where her massive workload left her with less than 2 minutes for each student each day:

“I started the year with 287 students in my seven high school English classes,” Melony said. “I was teaching three sections of lower-level English students who struggled with reading and writing.” K12, Inc. advertises that they will meet the needs of struggling students, and that each student will receive individualized attention. Yet, 287 students is nearly triple the student load of a traditional high school teacher.

How is ONE teacher supposed to give adequate, individualized attention to 287 students? “I asked how I would manage that many students, especially in a school that advertises itself as providing individual support,” Melony said. COVA administrators told Melony that the hours a traditional teacher would spend creating lessons and attending meetings would be her time to grade student work.

K12’s lack of teacher meetings and their pre-packaged, canned lesson plans are supposed to allow teachers adequate time for students. How much time, exactly? A 40-hour week divided by 287 students gives each student less than ten minutes per week - not even TWO MINUTES PER DAY - of the teacher’s attention. That is, assuming there aren’t any other duties for K12’s teachers. [K12, Inc. online schools: a view from the inside, examiner.com, September 5, 2012.]

Black also described a massive dropout rate.  It was explained to her that K12 Inc. had a "planned dropout" rate of about a third.  Of course, so long as the students were logged in for "count day," K12 Inc. was paid in full.  Black also worked with a "credit recovery" program for kids who had failed a class.  But, kids slipped through the cracks even more quickly with this program. 

“Three-quarters of my credit recovery kids never logged in, never completed any work, never answered their emails or phone calls, yet they remained on my class rosters,” she said. “I began wondering about the state-mandated hours for students at the high school level. No one is monitoring this as far as I can see.” [Id.]

So how is all that working out for students? Not good.

In 2011 the New York Times spent several months investigating online schools generally, and K12 Inc. specifically.  Their conclusion: ". . . a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards."  Profits and questions at online charter schools, New York Times, December 12, 2011.

Since then some harder data has become available:

Using Adequate Yearly Progress (AYP) state data, state performance rankings, and graduation rates, the researchers showed that full-time virtual schools lag significantly behind traditional brick-and-mortar schools. In particular, only 27.7 percent of K12 Inc. online schools met AYP in 2010-2011, compared to 52 percent of public schools. Of the 36 K12 Inc. schools that were assigned a school rating by state education authorities, only seven (19.4 percent) had ratings that clearly indicated satisfactory status. [From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers for Phantom Students and Failing Grades, PRWatch.org, Oct. 2, 2013.]

Given the roots of K12 Inc., it's practices and resultant student outcomes are unsurprising.  A public school operated by a locally elected school board only has one goal - educating students.  To be sure, schools differ from place to place, reflecting both the challenges and values of the community.  But in the end, a public school will always be about giving kids the best education - whatever that means to the local electorate.  But K12 Inc. has a much different history and set of incentives.

... Not surprising for an educational model kicked off with a $10 million investment from junk-bond king Michael Milken.

Milken was the Wall Street financier who virtually invented junk-bonds -- high-risk securities that were used to leverage hostile buyouts in the "go-go" 1980s. Milken came to symbolize Wall Street excess, serving as inspiration for the Michael Douglas character Gordon Gekko in the 1987 movie Wall Street. Milken spent almost two years in a federal penitentiary for securities fraud.

After he was released from prison, Milken set his sights on the $600 billion public education "market," forming new companies including Knowledge Universe and Knowledge Learning, parent company of the KinderCare child care chain. With his $10 million stake in K12 Inc., Milken aided one of his Vice Presidents and another junk dealer, Ron Packard, who specialized in mergers and acquisitions for Goldman Sachs back in the '80s. [Id.]

K12 Inc. is heavily incentivize to capture as much of the education "market" as possible. Normal folks call the education "market" our children.  So, here is what capturing them means:

An analysis by USA TODAY finds that online charter schools have spent millions in taxpayer dollars on advertising over the past five years, a trend that shows few signs of abating. The primary and high schools -- operated online by for-profit companies but with local taxpayer support -- are buying TV, radio, newspaper and Internet ads to attract students, even as brick-and-mortar public schools in the districts they serve face budget crunches.

... 

The USA TODAY analysis finds that 10 of the largest for-profit operators have spent an estimated $94.4 million on ads since 2007. The largest, Virginia-based K12 Inc., has spent about $21.5 million in just the first eight months of 2012. [Online schools spend millions to attract students, USA Today, November 28, 2012.]

All of this is public money which would be spent educating children if it had gone to a public school.  There is a lot more information out there about K12 Inc., and we'll be back with more in the future.