Conservatives waxed rhapsodic about online charter schools and about selling online programs to the public schools as a way to reduce the number of teachers needed. They recognized the online charters’ potential to disrupt traditional schooling and to destroy the influence of teachers’ unions. It was the very force for “creative destruction” that proponents of the free market admired. Terry Moe of Stanford University and John Chubb of the Edison Project, both critics of the unions and advocates of school choice, embraced online learning as a revolutionary force that would transform learning, reduce costs, and bypass the unions. Rupert Murdoch of News Corporation hired Joel Klein to promote online learning and paid $360 million to buy a company called Wireless Generation to generate electronic content. Murdoch saw a multibillion-dollar industry ready to be mined for vast profits.
Jeb Bush campaigned tirelessly to popularize the promise of online learning. In 2010, he and Bob Wise, the former governor of West Virginia, and their respective organizations—the Foundation for Excellence in Education and the Alliance for Excellent Education—released a joint statement called “10 Elements of High Quality Digital Learning,” which contained glowing promises of high-quality instruction delivered online, personalized and customized to meet the needs of every learner.
The ten elements were (1) student eligibility—all students are eligible; (2) student access—all students should have access to online education; (3) “personalized learning”—all students can get a customized online education from an approved provider; (4) advancement—students progress based on demonstrated competency, not by age or grade or seat time; (5) content—all courses are high quality; (6) instruction—digital instruction and teachers are high quality; (7) providers—all students have access to multiple high-quality providers of digital instruction; (8) assessment and accountability—student learning is the metric for evaluating the quality of content and instruction; (9) funding—funding creates incentives for performance, options, and innovation; and (10) delivery—infrastructure supports digital learning. The “10 Elements” supported online courses and online assessments in regular schools—a boon for the marketplace—and virtual schools, operating with minimal state regulation.
Its sponsors said this proposal would bring excellent education to every student in America and claimed that it would prepare everyone for college and a career, close the achievement gap, and narrow the income divide in American society. Free and easy and universal access to digital learning, they said, would transform American education and American society. Embedded in the “10 Elements of High Quality Digital Learning” was a recommendation that states should treat all education providers equally, whether they were “public, chartered, not-for-profit, or private.” This would make cyber-charters equally deserving of public dollars as public schools. The “10 Elements” urged lawmakers not to set any limits on how much, how often, or in what manner online instruction was delivered, while encouraging alternative certification for teachers. States should not permit school districts to restrict access to online schools, and states should require students to take online courses to graduate from high school. What a boon this was for providers.
The underlying theme of the “10 Elements” was deregulation: removing any obstacles to digital providers, such as requirements that teachers be certified (which would “stifle innovation and diminish quality”), that class sizes be limited, or that providers have a brick-and-mortar office in the district or state where they sell their products. Such an administrative requirement, they cautioned, might create “obstacles” that “prevent high quality providers from participating.” The “10 Elements” was truly a bill of rights for online providers, giving them free access to a state’s students without any quality controls for teachers or programming. One wonders how many providers of virtual schools would find it burdensome to have a physical office located in a state where they intend to collect millions of dollars of taxpayers’ money.4
The statement confidently asserted, “Digital learning is a proven method.” It is successful in the military, in industry, and in higher education, it asserts, so it will surely succeed in the schools, where it will be the “great equalizer” and “students will learn more.” The only research cited to support this claim was a U.S. Department of Education report. The authors of that report said they could find only five recent studies comparing online instruction with face-to-face instruction in the schools and that much more research was needed. It contained no support for the extravagant claims of the “10 Elements” about the benefits of digital learning in elementary and secondary schools.5
The preparation of the “10 Elements” statement was funded by the Gates Foundation, the Broad Foundation, and the Walton Family Foundation, as well as by many online providers who stood to benefit by its recommendations, including K12 Inc., Pearson, Houghton Mifflin Harcourt, Apex Learning, McGraw-Hill, and other big technology companies.
ALEC, the conservative organization of state legislators committed to privatization of public education, is a major promoter of online learning. The co-chair of ALEC’s education task force was Mickey Revenaugh, the senior vice president of Connections Academy, for-profit online school provider. The two thousand state legislators who belong to ALEC could be counted on to bring ALEC’s model laws back to their home states. ALEC’s Virtual Public Schools Act authorized for-profit virtual academies and declared that they would be recognized as public schools, treated equitably, and allocated the same resources as other “public schools.” Connections Academy quit ALEC after the shooter of an unarmed teenager in Florida said he was acting in accord with the ALEC-devised “stand your ground” law. Some other corporations that sponsored ALEC were also embarrassed and withdrew their support.6
A state legislator in Tennessee introduced ALEC’s model legislation for virtual schools without even bothering to disguise its origin: “Asked by the Knoxville News Sentinel’s Tom Humphrey where he got the idea for the bill, [Representative Harry] Brooks readily admitted that a K12 Inc. lobbyist helped him draft it. Governor Bill Haslam signed Brooks’s bill into law in May [2011]. The statute allows parents to apply nearly every dollar the state typically spends per pupil, almost $6,000 in most areas, to virtual charter schools that are authorized by the state.”7
State after state passed legislation opening the door to virtual charter schools and for-profit virtual charters. At least twenty-nine states had one or more virtual charter schools for full-time students in 2012, and the number seemed likely to grow. A report issued by the National Education Policy Center said, “In league with the home schooling and charter school movements, virtual schooling has become the fastest growing alternative to traditional K–12 education in the United States.” The virtual charters merged the three disparate movements—charter schools, homeschooling, and online learning—into a single for-profit format.8
It was not a love of innovation that opened doors in many states for the for-profit virtual charter industry but adroit lobbying and campaign contributions. The industry gives generously to politicians and lobbyists to facilitate legislation authorizing them to open virtual schools in the state and obtain public funding. That is part of the cost of doing business. In Pennsylvania, which provides about 10 percent of K12’s revenues, the corporation spent nearly $700,000 on lobbying between 2007 and 2011. The corporations contribute to family organizations that support cyber-schools, and the family groups in turn use these resources to lobby legislators, make campaign gifts, and send large delegations of parents and children in matching T-shirts to legislative hearings and other public meetings on behalf of the industry.9
Jeb Bush’s Foundation for Excellence in Education actively lobbies and advocates for the benefits of online schooling. At a conference in San Francisco, Stephen Bowen, the state commissioner of Maine, got very excited when Bush’s top education adviser, Patricia Levesque, offered to help “suggest policies, write laws and gubernatorial decrees, and develop strategies to ensure they were impleme
nted.” An investigative report by the Maine Sunday Telegram uncovered “a partnership between Maine’s top education official and a foundation entangled with the very companies that stand to make millions of dollars from the policies it advocates.” The newspaper obtained more than a thousand pages of e-mails documenting how Maine’s digital education agenda was guided by the companies likely to benefit financially from the state’s policies, especially K12 Inc. and Pearson’s Connections Academy. “At stake,” said the report, “is the future of thousands of Maine schoolchildren who would enroll in the full-time virtual schools and, if the companies had their way, the future of tens of thousands more who would be legally required to take online courses at their public high school in order to receive their diplomas.”10
Colin Woodard, the Maine reporter, revealed that Stephen Bowen was a member of ALEC when he was chosen to be commissioner of education for the state of Maine, as were K12 Inc. and Connections Academy. K12 Inc. contributed $19,000 to Paul LePage’s campaign to become governor of Maine. Patricia Levesque was a lobbyist for many of the online companies, as well as the College Board. One of the bills proposed to Bowen was a requirement that all students take at least one Advanced Placement test online (that would benefit the College Board and the online companies). When Governor LePage proclaimed “the first ever National Digital Learning Day,” said the investigative report, the language of his executive order was largely written by the lobbyists representing the online companies. Woodard’s exposé of the profit motive behind the demand for online schools in Maine won a 2012 George Polk Award, one of the most prestigious in journalism.
When K12 Inc. decided to open an online charter in Massachusetts, it created a partnership with the rural Greenfield school district. According to The Washington Post, the state’s education officials vetoed the plan to start a statewide school. K12 then spent about $200,000 to lobby legislators. A Boston Democrat sponsored legislation allowing the Greenfield district to launch the Massachusetts Virtual Academy. She acknowledged to the Post that “the language was imperfect and didn’t address issues of funding or oversight but said she couldn’t wait to craft a comprehensive plan.” According to the Post, she received “at least $2,600 in campaign contributions from K12, its executives or its lobbyists.”11
When K12 wanted to open a statewide online school in Virginia, it followed a politically savvy path. It made generous campaign contributions of $55,000 to the Republican governor, Robert F. McDonnell, a staunch advocate of school choice. McDonnell pushed legislation to authorize full-time virtual schools in 2010. K12 created a partnership with rural Carroll County, taking advantage of the fact that state aid is linked to the district’s affluence or poverty. Carroll County receives some $5,400 per student in state aid, and K12 is reimbursed for that amount for every student who enrolls, regardless of where he or she lives. Had K12 located in affluent Fairfax County, The Washington Post pointed out, the state aid would have been about half that amount. For its part, Carroll County gets a handsome reward: a $500 registration fee for every out-of-district student, plus a management fee of 6.5 percent of K12’s taxpayer dollars for the school. That’s a plum for Carroll County but a loss for every district whose students enroll in K12’s online school.12
Education technology companies, Wall Street equity funds, and school choice advocates combined to promote online schooling. It was a win-win situation for all three sectors. The technology companies won market share as states required every student to take at least one online course and authorized virtual charter schools. Wall Street investors got a piece of an exciting new industry. The school choice advocates saw technology as the wedge that would undermine the preferred status of public schooling. At conference after conference, lobbyists for education technology, hedge fund managers, equity investors, and school choice advocates met to celebrate their victories and to plan for the next round of expansion. Lee Fang of The Nation described one of these conferences:
Standing at the lectern of Arizona State University’s SkySong conference center in April [2011], investment banker Michael Moe exuded confidence as he kicked off his second annual confab of education startup companies and venture capitalists. A press packet cited reports that rapid changes in education could unlock “immense potential for entrepreneurs.” “This education issue,” Moe declared, “there’s not a bigger problem or bigger opportunity in my estimation.”
Moe has worked for almost fifteen years at converting the K–12 education system into a cash cow for Wall Street. A veteran of Lehman Brothers and Merrill Lynch, he now leads an investment group that specializes in raising money for businesses looking to tap into more than $1 trillion in taxpayer money spent annually on primary education. His consortium of wealth management and consulting firms, called Global Silicon Valley Partners, helped K12 Inc. go public and has advised a number of other education companies in finding capital.
Moe’s conference marked a watershed moment in school privatization. His first “Education Innovation Summit,” held last year, attracted about 370 people and fifty-five presenting companies. This year, his conference hosted more than 560 people and 100 companies, and featured luminaries like former DC Mayor Adrian Fenty and former New York City schools chancellor Joel Klein, now an education executive at News Corporation, a recent high-powered entrant into the for-profit education field.13
As the industry prospered, it came under increased scrutiny. Journalists and researchers began to question the cost and value of the education it provided, and educators awakened to the fact that every student who left a district school for a charter, whether bricks-and-mortar or virtual, diminished the district’s enrollment and budget.
In an article in Bloomberg Businessweek, John Hechinger pointed out that K12 schools had worse academic results than brick-and-mortar schools. The company’s response was that it was enrolling high numbers of poor students, a rationale that would be scorned by reformers as an “excuse” if offered in defense of a regular public school. Critics, including the auditor general for Pennsylvania, complained that the state’s cyber-schools—which receive nearly $11,000 per student—were overcharging for their services. When K12 enrolled special education students, its charges far exceeded those of the local school district. Hechinger reported that a parent had two boys who received one hour a week of speech therapy via headset, microphone, and Web conferencing; for this service, the state paid the cyber-charter nearly $22,000 annually for each boy. The same once-a-week speech service from the local school district would have been about $1,500 each. And the money for these services comes out of the state’s limited budget for public education.14
Unlike most educators, people in the corporate sector believed that education would be transformed by those who have a profit motive. Michael Milken was serenely confident in the education program he initiated. To address education and other major problems, he said, “In each case, the solution is the same: Unleash the energies of entrepreneurial people, and they will change the world.” According to Ron Packard, the possibilities for expansion were limitless: “There’s no reason why eventually you can’t be educating a billion kids online.”15
The New York Times launched an in-depth investigation into the claim that “corporate efficiencies combined with the Internet can revolutionize public education, offering high quality at reduced cost.” The Times focused on K12, the industry leader, to explore these issues. What it found was “a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload, and lowering standards.” To bolster profits, the company recruits students who are ill-suited for online education, which requires “strong parental commitment and self-motivated students.” Consequently, K12 and other for-profit online schools experience “high rates of withdrawal.” Teachers complained of low pay and heavy workloads, with some managing more than 250 students; many said they felt pressured to pass students who did little work. Students who were inactive remained on the roster, enabling the compa
ny to collect tuition for them. According to the story, state auditors in Colorado identified 120 students in K12’s Colorado Virtual Academy who could not be verified or never logged in or did not meet state residency requirements.16
Students who enroll in K12 online schools receive a computer, an Internet connection, materials, and workbooks. Their parents are their “learning coaches.” Teachers work from their homes or other remote locations. Teacher pay is low, starting in the low $30,000s, less than their counterparts in traditional schools. Some elementary-level teachers manage online classes of 75 children, while some high school teachers may be responsible for more than 250. The most significant cost to any school is teachers’ salaries, and the most significant saving is increased class size, although that means less time and attention for individual students. Teachers are available on the Internet or by telephone, and some schedule meetings with students when it is physically possible.
The online industry zealously protects its financial and legal status, said the Times. When Stephen Dyer, a state legislator in Ohio, began questioning the state’s formula for financing charter schools and online schools, he was picketed by protesters carrying signs that said, “Why won’t Rep. Stephen Dyer let parents choose the best education for their kids?” The protesters said they were parents, children, and employees of schools who belonged to an organization called My School, My Choice. But when Dyer’s wife questioned them, she learned that they were “paid temp agency workers.”17 The Times’s reporter tracked down the group’s connection to a Republican lawyer in Columbus and from there to the board president of the Ohio Virtual Academy, which is managed by K12 and receives $60 million annually from the state.
Reign of Error: The Hoax of the Privatization Movement and the Danger to America's Public Schools Page 23