Education Reform For-Profit Fraud Virtual Charter Schools

Craig Harris: Online Charters Have a Record of Poor Outcomes, Fraud, and Profit

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Craig Harris, investigative reporter for the Arizona Republic, wrote about the abysmal record of online charter schools. Despite their poor outcomes, they continue to be very profitable.

The biggest of the online charter companies is K12 Inc., whose schools regularly get bad results but whose revenue this year topped $1 billion for the first time.

State regulators mouth complaints about the low quality of online charters yet they are renewed again and again. As Harris points out, even school choice advocates (except for Betsy DeVos) believe that the online charters should be regulated, yet they continue to operate unimpeded.

Harris writes:

SAN DIEGO — By the time authorities brought charges against the owners of A3 Education earlier this year, the online charter school company had bilked California taxpayers out of $50 million, according to indictments handed up in May. 

The state would have lost another $200 million if authorities had not detected the scheme to inflate enrollment in the virtual charter school using names gleaned from youth sports league rosters, said San Diego County District Attorney Summer Stephan. League owners are alleged to have received kickbacks for providing names, according to the indictments.

A3 Education, a nonprofit management company that enrolled tens of thousands of California students at its peak, had sought out small school districts to authorize its online schools, knowing the districts would provide little oversight, authorities said.

The California case is the latest in a string of allegations of fraud and educational malpractice against virtual charter schools. These have included, among others, multimillion dollar scams in Ohio, Oklahoma and Indiana, and academic or financial problems that shuttered online charter schools in Georgia, Nevada and South Carolina.

California last year banned for-profit charter schools and this year adopted a two-year moratorium on new virtual charter schools. Neither law, however, would have affected A3 Education or its schools.

The Arizona Republic visited seven states to investigate the successes and challenges surrounding charter schools — the publicly funded but privately operated schools that many believed would revolutionize American public education through competition and innovation…

In Arizona, which has the most charter school students out of the states, no online charter school meets the state Charter Board’s academic standards. And Arizona’s largest virtual charter school, Primavera Online, earned the board’s lowest academic ranking and posted declining graduation rates for the last decade. That hasn’t stopped Primavera founder and CEO Damian Creamer from paying himself a combined $10.1 million in 2017 and 2018.

Primavera, which has a total enrollment of 22,000, reported a $10 million profit this year, while spending $6.9 million on teacher salaries. 

“These guys are definitely in it for the profit,” said Macke Raymond, director of the nonpartisan Center for Research on Education Outcomes, or CREDO, at Stanford University.

Negative headlines have, however, prompted prominent charter school leaders to call on regulators to clamp down on virtual charters, and for the industry to cut ties with the schools.

Todd Ziebarth, a senior vice president of the National Alliance for Public Charter Schools, said poor academic performance at virtual charter schools gives ammunition to teachers unions and others who oppose school choice, hurting high-quality charter schools and the broader school-choice movement.

“They make up a small percentage of charter schools, but a huge percentage of negative publicity,” said Tom Torkelson, chief executive of Texas-based IDEA Public Schools, one of the nation’s largest charter school operators. “They add no value. I would never send my kids to one.”

Torkelson argues that it’s time for online charter schools to go out of business.

But few states have enacted reforms, experts note, because when such proposals arise, virtual charter operators — flush with cash — have flooded key lawmakers with campaign contributions.

This proves that when a big charter corporation buys legislators, they stay bought.

Despite poor academic performance, virtual charter schools likely are here to stay because parents want that choice, said Raymond, the CREDO director.

However, CREDO notes in a study, low-performing online charter schools are not keeping their end of the educational “grand bargain” struck about 25 years ago, during the early charter movement.

That deal gave charter operators the freedom to teach kids in innovative ways with minimal red tape. By being allowed to run a school like a business, operators promised they would allow regulators to shut down poor performing schools. 

To fix the problems, Stanford researchers concluded that charter school authorizers “must step up their responsibilities and demand online charter providers improve outcomes for students.” And, states should examine the progress of existing online programs before approving any expansions.

Raymond said she still believes in a “cost-efficient and effective education through online” schools but the system “doesn’t seem to deliver on that.”

University of Colorado researchers agreed that states should slow or halt the growth of virtual and blended schools until their performance has improved, and student-to-teacher ratios are lowered.

But Miron, the Western Michigan professor, said changes are unlikely.

Even when prosecutors, like the San Diego County district attorney, crack down on one virtual school another will quickly pop up because the business is so lucrative, he said. 

“Even if a charter board fires them, it doesn’t affect them. They are not losing a building,” Miron said. “They don’t get punished for risky behavior. It’s a very different model for brick-and-mortar schools.”

 

 

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