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For-profit education companies set to receive millions of Iowa tax dollars

By   /   May 9, 2012  /   No Comments

By Sheena Dooley | Iowa Watchdog

DES MOINES — More than $4.1 million of Iowa taxpayer dollars will be shipped out of state next year to two for-profit education companies with a poor track record in other states, according to open enrollment figures.

Leaders in the Cumberland Anita Massena School District, known as CAM, and Clayton Ridge School District contracted earlier this year with Connections Academy in Baltimore and K12 Inc. in Virginia, respectively, to run full-time virtual schools. To date, 710 students from across the state have formally requested to open enroll out of their districts and into CAM and Clayton Ridge, according to superintendents in those districts.

Under the partnership, CAM will more than double its current enrollment of 423 students next year, while Clayton Ridge will add 140 students to the 603 that already attend schools in the district. They, however, will see little of the additional $6,001 that follows each student.

K12 Inc. and Connections Academy instead will collect about 96 percent of that per-pupil money, under their agreements with the districts. They will provide students with computers and Internet, comprehensive curriculum, guidance services and Iowa-licensed teachers.

“The bottom line is K12 Inc. has their expenses and they are selling their products,” said Allan Nelson, Clayton Ridge superintendent. “I wheel and deal for the best deal. Do I know how much profit they make? No. But when I buy a bus I don’t know how much profit they make. And what am I going to do with that information anyway? Say send me $400, you made too much?”

Susan Stagner, vice president of state relations for Connections Academy, said in an email that third party surveys of parents show 90 percent or more rated the school favorably and said they would recommend it to other families. She did not include any figures related to student retention or performance.

Officials at K12 Inc. did not return calls seeking comment.

The agreements with the companies set off a firestorm earlier this year when K12 Inc. and Connections launched statewide recruitment campaigns. Small districts feared the virtual schools would create competition for students among already struggling districts.

Educators also questioned the quality of education they provide and the effect it would have on students, who would never have to leave their homes.

In Arizona, K12 Inc. outsourced instructional responsibilities at the Arizona Virtual Academy to low-paid workers in India, according to a study co-authored by Gene Glass, a research professor at the University of Colorado’s School of Education in Boulder. Online companies were accused of inflating enrollment in Colorado, which also doles out funding based on student numbers, Glass said.

A recent investigation by EdNews Colorado, a consortium of news organizations in the state, showed Colorado spent nearly $100 million in taxpayer dollars last year on online schools. Of the 10,500 students enrolled in the state’s 10 largest online programs, some of which were run by Connections Academy and K12 Inc., half left the schools within a year. They produced three times as many dropouts as they did graduates, according to the 10-month investigation.

Despite the problems, virtual academies in the past five years have become the fastest-growing alternative to traditional schools in the country. They are operating in nearly 30 states with enrollments reaching about 300,000, according to Glass.

The growth has occurred despite a lack of evidence the schools provide an adequate alternative for some students, Glass said in a recent interview.

“Tens of millions of public dollars are flowing out of these states to the companies,” he said. “And schools are really starting to feel it.”

Senate and House education committees tried to block the virtual schools in early legislation, but both chambers passed a measure Tuesday allowing the partnerships through the 2014-15 school year.

Both companies hired lobbyists, although it’s unclear how much, if any, money they spent during the current year. K12 Inc. employed one lobbyist, while Connections Academy hired four, according to state records.

The virtual schools will face heavy scrutiny next year, said Jason Glass, Iowa’s top education official. He is not related to Gene Glass. If the virtual schools fail to meet the Iowa’s law and standards, the state will yank a large portion of their funding.

“It’s all so new,” Olson said. “People aren’t sure how it’s going to affect everything. I am happy that we will be allowed to provide it for the next three years. It gives us an opportunity to demonstrate the benefits of virtual schools for some of our Iowa students.”