Political Power of the Online Charter Czars: Can It Be Broken?

Ohio’s Steve Dyer reports in his personal blog that defenders of Ohio’s Electronic Classroom of Tomorrow, the notorious ECOT online charter school, have even been lobbying delegates to the Republican National Convention here in Cleveland against Ohio’s crack-down on e-schools which seem to have been collecting millions of dollars every year from the state for phantom students.  Dyer writes: “And now, the Ohio Coalition for Quality Education—the state’s ironically named and most egregious defender of poor-performing charter schools… slipped a letter under the doors of delegates to the Republican National Convention….”  The letter “blames sneaky Democratic bureaucrats at ODE (Ohio Department of Education) for ECOT’s problems….”  In fact, as Dyer explains, passage of a bill modestly to increase regulation of Ohio’s charter sector was passed with bipartisan support.  But now, as Ohio’s largest and most profitable charter stands to lose millions of dollars because it has been inflating the per-pupil attendance on which state funding is based, powerful backers are appealing to anyone they can to try to keep their school operating and keep the tax dollars flowing into their profits.

Patrick O’Donnell reports for The Plain Dealer that ECOT continues to try to beat state oversight.  ECOT was denied a court injunction to block an inspection by state regulators, who then went to the school to begin the scheduled attendance audit only to be denied access to the school’s records: “When Judge Stephen McIntosh rejected ECOT’s argument… investigators went to the school, as they had scheduled weeks earlier, to see records of when students were logged in to the school’s system to take lessons. ECOT, the state says, would not make those records available. ‘ECOT is refusing to provide ODE personnel with access to the log-in/log-out data for the students that ODE identified in connection with the year-end review,’ Douglas Cole, a lawyer hired by ODE, said in a letter to ECOT on Tuesday.  The audit has been postponed for two weeks to give ECOT another chance to provide records.”

O’Donnell quotes Neil Clark, the powerful Columbus lobbyist who represents ECOT, and who says ECOT will go back to court: “Our attorneys are in the room and they’ve made it very clear that any information that the Department of Education asks outside of our contract that they will need to file other paperwork with the court and make a request to the court that we submit the other data.”  (This blog has covered ECOT’s efforts to block state regulation here.)

Ohio is not the only state attempting to regulate online charter schools.  Howard Blume reports for the Los Angeles Times that, “The (California) state attorney general’s office has reached an $8.5 million settlement with an online charter school it had accused of false advertising, misleading parents and inadequate instruction.”  The state of California has been investigating 13 branches of the California Virtual Academy, affiliated with K12 Inc., the nation’s largest chain of fully online charter schools.  Blume explains that K12 has located the authorizers of its branches in very small school districts. California law pays an authorizer fee of 1 or 2 percent of the online school’s revenue to the sponsor for the cost of oversight. Very small school districts in need of funds have been sponsoring huge K12 branches that draw students from the across the populous county where each tiny school district-sponsor is located. Sponsorship has worked as a fund-raising venture for the small school districts but failed when such districts lacked any capacity to provide oversight.  While K12 agreed to the $8.5 million settlement, it did not agree that it committed the alleged violations: that the online branches of K12 misled parents by promising that they offered the required courses for admission to California’s public universities and that K12 promised for each student a flexible learning plan.  A second complaint based on testimony of a whistle blower had also accused K12 “of submitting fraudulent student attendance records to obtain more state education funds than they were entitled to… The (second) complaint alleged that teachers were pressured to record a full day of attendance for 30 minutes of work or to sign fabricated attendance registers.”  While K12 paid its fine to the state of California, it will be important to watch whether K12 cleans up its practices there and whether it is called to account in the other states in which it operates.

Oklahoma, whose legislature has provided stronger regulatory power, is reported by EdSurge to have shut down ABLE Charter, an online school designed to serve homeless students. EdSurge quotes Oklahoma Watch: “The allegations, the Watch writes, are ‘inadequate financial reporting, failure to comply with the Open Meeting Act, inability to maintain a four-member governing board and inadequate organization.’  The Watch reports that, of the 93 students enrolled at ABLE at the start of the 2015-2016 school year, just 12 remained until the end of the year, a steep dropout rate.”  States have been more successful in shutting down small operations like ABLE, but less likely to control the huge for-profits like K12 and ECOT.

In the past year, major reports across the political spectrum have discredited the full-time online academies. Last fall came the trio of reports from Mathematica Policy Research, the Center on Reinventing Public Education, and Stanford’s Center for Research On Education Outcomes (CREDO).  A press release summarizes the joint findings of the three reports: “Innovative new research suggests that students of online charter schools had significantly weaker academic performance in math and reading, compared to their counterparts in conventional schools.”  The press release quotes Mathematica fellow Brian Gill: “Challenges in maintaining student engagement are inherent in online instruction, and they are exacerbated by high student-teacher ratios and minimal student-teacher contact time, which the data reveal are typical of online charter schools nationwide.”  Robin Lake, director of the Center on Reinventing Public Education, comments: “The report recommends that policymakers consider moving online schools out of the charter context, or craft unique provisions specific to online charters.”  The Stanford CREDO analysis charges that, on average, students at online charters lose ground academically: “It would equate to a student losing 72 days of learning in reading and 180 days of learning in math, based on a 180-day school year.”

Then just last month—June 2016, the National Alliance for Public Charter Schools, the National Association of Charter School Authorizers and 50CAN, all firm supporters of the charter school sector released a major report which warns: “The well-documented, disturbingly low performance by too many full-time virtual charter public schools should serve as a call to action to state leaders and authorizers across the country. It is time for state leaders to make the tough policy changes necessary to ensure that this model works more effectively than it currently does for the students it serves. It is also time for authorizers to close chronically low-performing virtual charter schools. Our organizations plan to work actively with state leaders and authorizers as they embark on these efforts.”

Of course in state legislatures like Ohio’s it is the powerful contributors from the largest,and often lowest-performing for-profit schools who have the political power to block such efforts.  In Ohio, ECOT is operated by William Lager, who owns the two for-profit companies that provide all the services and curriculum for ECOT.  Plunderbund reported in 2014 that since its founding in 2001, William Lager had made a profit of over $130 million from IQ Innovations and Altair Learning Management, his two privately held companies, and that from 2000 to 2014, he had made political donations to Ohio politicians totaling over $2 million.