How Controversial Online Charter Schools Push Aside Their Opponents
It has taken three years, a court case, an appeal, a half-dozen hearings, and a posse of lobbyists, but controversial education company K12 Inc. has finally won a battle to operate an online charter school in North Carolina.
The Board of Education approved today the opening of North Carolina Virtual Academy, an online charter school that will be managed and operated by K12 Inc. After years of resistance from the state school board, the approval was essentially mandated by a last-minute legislative rider slipped into the state's budget. Another virtual charter school, which will be operated by a subsidiary of education giant Pearson, was also approved.
In online charter schools, students take classes at home on their computers, interacting with their teachers via chat and video calls; as at traditional charters, taxpayers foot the bill.
The opening of North Carolina Virtual Academy is a key victory for K12, the nation's largest operator of online charter schools, which has been weathering increasing pushback across the country in the face of poor academic results and high student turnover in the online schools it manages. K12 does not dispute those results, but attributes them to the struggling student population it says it serves.
K12 was targeted by a high-profile campaign from activist investor Whitney Tilson, who criticized the school's practices and compared it to subprime mortgage lenders, as well as two shareholder lawsuits, which were both dismissed. The company was cited in Florida for failing to provide adequately certified teachers, and last year, the NCAA ruled that it would no longer accept coursework from two dozen of the company's virtual schools.
In 2013, the company lost its management contract in Colorado, which cited the school's poor results; last year, it lost a major contract to manage its largest school, in Pennsylvania, which at its peak made up 14% of K12's revenue. It is now on the verge of being driven out of Tennessee.
"K12 has have a lot riding on North Carolina Virtual Academy," said Matt Ellinwood, an attorney and policy analyst at the progressive North Carolina Justice Center, which has long publicly opposed K12's expansion into the state. "They're in a grow or die industry, and that's how their model works."
K12, currently valued at around $615 million, saw its stock rose almost 3% on Thursday, the day the company won the right to operate the North Carolina school. To increase revenue and satisfy shareholders, Ellinwood said, the company needs to replace its lost contracts with new ones, opening new schools in as many states as it can.
The complex legal and legislative battle K12 has waged in North Carolina shows just how far the company is willing to go to achieve that goal.
How Controversial Online Charter Schools Push Aside Their Opponents
Thanks to a mysterious legislative mandate tacked onto the state budget, North Carolina will now be home to two new experiments in online schooling.
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