K12 Profits Tied to Virtual Learning Demand, Acceptance
The corporation known as K12 grew its “managed public schools” business – with operations in 32 states and the District of Columbia – by 31% last year, from $454 million in 2011 revenue to $596 million in 2012. (See 2012 annual report.) Also selling products – including the K12, Aventa, A+ and Middlebury on-line programs — to schools, the company netted $23 million in 2012. This profit, K12 tells shareholders, is dependent on increasing demand for virtual schools – like DC’s local CAPCS On-Line charter, which operates without a building or traditional instruction – and DC’s proposed Flex Academy – a blended school, combining traditional instruction with on-line hours. In addition, their 2012 annual report warns, “Our curriculum and approach to instruction may not achieve widespread acceptance, which would limit our growth and profitability.” (annual report, p.36, p.44)
Materials supporting DC’s proposed Flex Academy stress K12’s experience and the number of students served rather than achievement data; the proposal dodges talk of AYP (Adequate Yearly Progress) by suggesting that K12 should not be subject to the same assessment standards as other schools. (See also “Flex Academy “Answer Sheet”.)
Educational researchers have pointed out how few K12 schools achieve AYP nationwide and cite lower graduation rates for K12 schools compared with others in states where they operate. In an effort to narrow down what one study calls “overall weak performance” in K12 schools, researchers note that math scores, “which are more dependent on instruction, were substantially lower than reading scores, which are more influenced by students’ home environment.” The paper, recently published by the National Educational Policy Center, hypothesizes that concern for profit may be discouraging K12 from addressing student achievement.
While scores at CAPCS On-line are not the lowest in DC, the virtual school is not making AYP in math or reading, and scores in math are lower than those in reading.
“Online schools score better on Wall Street than in classrooms,” the New York Times declared in 2011. Business Week came to a similar conclusion, highlighting convicted felon Michael Milken’s role in founding K12.
In addition, the Times noted that K12 uses revenues – received from tax dollars in DC and many states – on advertising and lobbying for legislative changes that benefit the company. The article doesn’t mention that K12 sat on the wealthy and powerful American Legislative Exchange Council’s Education Task Force, framing model legislation that supports virtual and blended schooling. K12 tells shareholders that lobbying is one of its core capacities, noting “significant lobbying costs” in battling what it calls “harmful legislation which, in our opinion, was aggravated by negative media coverage about us or other Managed School operators.” (See 2012 annual report, p.30.)
Widely-reported policy recommendations suggest slowing or halting the growth of full-time virtual and blended schools until the low performance of these models can be understood and improved. Perhaps these reports aggravated some jurisdictions into pausing before further expanding these models. In the District, however, the Public Charter School Board put K12’s Flex Academy on the fast-track to approval. A public hearing is scheduled for January 28.