NEPC study: Virtual schools don’t deliver value to the taxpayers

7 May

Moi voiced her concern about virtual schools in Accountability in virtual schools:

Moi voiced her skepticism about for-profit online charter schools in Online for-profit K-12, good for bankers, bad for kids : All children can learn. Stephanie Saul of the New York Times is reporting on the cynical operation of for-profit charter schools in the article, Profits and Questions at Online Charter Schools which describes how the dreams of some children are being hindered. 

By almost every educational measure, the Agora Cyber Charter School is failing.

Nearly 60 percent of its students are behind grade level in math. Nearly 50 percent trail in reading. A third do not graduate on time. And hundreds of children, from kindergartners to seniors, withdraw within months after they enroll.

By Wall Street standards, though, Agora is a remarkable success that has helped enrich K12 Inc., the publicly traded company that manages the school. And the entire enterprise is paid for by taxpayers.

Agora is one of the largest in a portfolio of similar public schools across the country run by K12. Eight other for-profit companies also run online public elementary and high schools, enrolling a large chunk of the more than 200,000 full-time cyberpupils in the United States.

The pupils work from their homes, in some cases hundreds of miles from their teachers. There is no cafeteria, no gym and no playground. Teachers communicate with students by phone or in simulated classrooms on the Web. But while the notion of an online school evokes cutting-edge methods, much of the work is completed the old-fashioned way, with a pencil and paper while seated at a desk.

Kids mean money. Agora is expecting income of $72 million this school year, accounting for more than 10 percent of the total anticipated revenues of K12, the biggest player in the online-school business. The second-largest, Connections Education, with revenues estimated at $190 million, was bought this year by the education and publishing giant Pearson for $400 million.

The business taps into a formidable coalition of private groups and officials promoting nontraditional forms of public education. The growth of for-profit online schools, one of the more overtly commercial segments of the school choice movement, is rooted in the theory that corporate efficiencies combined with the Internet can revolutionize public education, offering high quality at reduced cost.

The New York Times has spent several months examining this idea, focusing on K12 Inc. A look at the company’s operations, based on interviews and a review of school finances and performance records, raises serious questions about whether K12 schools — and full-time online schools in general — benefit children or taxpayers, particularly as state education budgets are being slashed.

Instead, a portrait emerges of a company that tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.

Current and former staff members of K12 Inc. schools say problems begin with intense recruitment efforts that fail to filter out students who are not suited for the program, which requires strong parental commitment and self-motivated students. Online schools typically are characterized by high rates of withdrawal.

Teachers have had to take on more and more students, relaxing rigor and achievement along the way, according to interviews. While teachers do not have the burden of a full day of classes, they field questions from families, monitor students’ progress and review and grade schoolwork. Complaints about low pay and high class loads — with some high school teachers managing more than 250 students — have prompted a unionization battle at Agora, which has offices in Wayne, Pa.

The Illinois Online Network has a good synopsis of the pros and cons of online education at Strengths and Weaknesses of Online Learning  K-12 for profit schools exhibit many of the deficiencies of other for-profit schools. See, For-profit colleges: Money buys government, not quality for students,

The National Education Policy Center (NEPC)released a study which examined virtual schools.

Here is the press release from the National Education Policy Center:

As Online Elementary and Secondary Schools Expand, Academic Performance Lags 

New NEPC Study Finds Limited Oversight, Excessive Costs of Virtual Schools Drain Millions in Public Funds


Jamie Horwitz, 202/549-4921;
Alex Molnar, 480/797-7261;

URL for this announcement:

BOULDER, CO (May 2, 2013) –A national study, released today by the National Education Policy Center (NEPC), offers a comprehensive review of 311 full-time virtual schools operating in the United States and finds serious and systemic problems with them.

University of Colorado Boulder Professor Alex Molnar, who edited Virtual Schools in the U.S. 2013: Politics, Performance, Policy, and Research Evidence, summed it up this way: “Even a cursory review of virtual schooling in the U.S. reveals an environment much like the legendary wild west. There are outsized claims, lagging performance, intense conflicts, lots of taxpayer money at stake, and very little solid evidence to justify the rapid expansion of virtual schools.” 

Lagging Performance – Soaring Enrollment

On the publicly-available metrics of Adequate Yearly Progress (AYP), virtual schools lag significantly behind traditional brick-and-mortar schools

In the 2010-2011 school year, 52 percent of brick-and-mortar district and charter schools met AYP, contrasted with 23.6 percent of virtual schools – a 28 percentage-point gap.  Virtual schools also enroll a far smaller percentage of low-income students, special education students, and English language learners than brick-and-mortar public schools.

It now appears that early adopters of the virtual school model were largely home-schoolers who were used to studying alone and who generally had lots of parental guidance,” said Western Michigan University Professor Gary Miron. “As virtual schools have expanded, it appears that their performance has slipped dramatically.”

Currently virtual schools enroll more than 200,000 elementary and secondary students in 39 states and the District of Columbia.  McLean, Virginia- based K12 Inc. is by far the largest private operator in this sector. 

Expansion Driven by Lobbying and Advertising Rather than Student Success

Despite virtual schools’ track record of students falling behind their peers academically or dropping-out at higher rates, states and districts continue to expand virtual schools and online offerings to students. 

Publicly-funded virtual school expansion appears to be driven by lobbying and advertising dollars.  It is not justified by the research evidence, nor is it governed by thoughtful policy.

Columbia University Professor Luis Huerta, another of the report’s authors, noted that,  “In the past two years a number of states, including Wisconsin, Oregon, Louisiana, and Michigan, either raised or eliminated enrollment caps for full-time virtual schools.”   Co-author Jennifer King Rice, a University of Maryland professor, points out that at the same time,  ”None of those states passed legislation strengthening accountability and oversight.”

High Cost to Taxpayers

The overall cost to taxpayers for lackluster virtual schools has been significant.  Despite incurring much lower costs than brick-and-mortar schools, virtual school operators receive the same allocation as charter schools that pay for buildings, desks, textbooks, and other costs associated with more traditional school settings.

The consistently poor performance of full-time virtual schools makes it imperative to know more about these schools. Stanford University Professor Emeritus Larry Cuban, who contributed a review of current research knowledge on virtual education to the NEPC report and has long followed education technology issues, explained: “The current climate of elementary and secondary school reform that promotes uncritical acceptance of any and all virtual education innovations is not supported by educational research. A model that is built around churn is not sustainable; the unchecked growth of virtual school is essentially an education tech bubble.”


The authors of the NEPC report conclude that continued rapid expansion of full-time cyber schools is unwise. More research is needed, and to enable such research, state oversight agencies need to require more, and better refined, data. Financial controls and funding unique to cyber schools need to be established. 

The NEPC report Virtual Schools in the U.S. 2013: Politics, Performance, Policy, and Research can be found on the web at

Moi wrote in Should ‘Enron’ weasels be trusted with K-12 education?

The debate currently going on in society is whether education is a “public good.”

The Business Dictionary defines a “public good.”

public good


An item whose consumption is not decided by the individual consumer but by the society as a whole, and which is financed by taxation.

A public good (or service) may be consumed without reducing the amount available for others, and cannot be withheld from those who do not pay for it. Public goods (and services) include economic statistics and other information, law enforcement, national defense, parks, and other things for the use and benefit of all. No market exists for such goods, and they are provided to everyone by governments. See also good and private good

Joseph Stiglitz, the Nobel Prize economist wrote KNOWLEDGE AS A GLOBAL PUBLIC GOOD:

This paper combines two concepts developed over the past quarter of century: the concept of global public goods and the notion of knowledge as a global public good.[3]

A public good has two critical properties, non-rivalrous consumption–the consumption of one individual does not detract from that of another–and non-excludability–it is difficult if not impossible to exclude an individual from enjoying the good. Knowledge of a mathematical theorem clearly satisfies both attributes: if I teach you the theorem, I continue to enjoy the knowledge of the theorem at the same time that you do. By the same token, once I publish the theorem, anyone can enjoy the theorem. No one can be excluded. They can use the theorem as the basis of their own further research. The “ideas” contained in the theorem may even stimulate others to have an idea with large commercial value.


The fact that knowledge is non-rivalrous–there is a zero marginal cost from an additional individual enjoying the benefits of the knowledge–has a strong implication. Even if one could exclude someone from enjoying the benefits of knowledge, it would be undesirable to do so because there are no marginal cost to sharing its benefits. If information is to be efficiently utilized, it cannot be privately provided as efficiency implies charging a price of zero—the marginal cost of another individual enjoying the knowledge. However, at zero price, only knowledge that could be produced at zero cost would be produced.

To be sure, to acquire and use knowledge, individuals may have to expend resources–just as they might have to expend resources to retrieve water from a public lake. That there may be significant costs associated with transmission of knowledge does not in any way affect the public good nature of knowledge itself: private providers can provide the “transmission” for a charge reflecting the marginal cost of transmission while at the same time, the good itself can remain free.

See, Education is a public good, not a consumer good

Moi wrote in Accountability in virtual schools:

Technology can be a useful tool and education aid, BUT it is not a cheap way to move the masses through the education system without the guidance and mentoring that a quality human and humane teacher can provide. Education and children have suffered because cash sluts and credit crunch weasels have destroyed this society and there is no one taking them on. They will continue to bleed this society dry while playing their masters of the universe games until they are stopped.

Where information leads to Hope. ©                               Dr.

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