Ohio’s Failure to Oversee Online and Dropout Recovery Schools Is Even Bigger Than ECOT Scandal

ECOT, the Electronic Classroom of Tomorrow, is the symbol of a much bigger problem in Ohio and across a number of states: an out-of-control sector of cyber schools and so-called “dropout recovery schools” whose savvy operators and owners have learned how to skirt and manipulate state laws that merely assumed entrepreneurs would run schools for the purpose of benefiting their students instead of lining their own pockets.  That was an incredibly naive assumption.

In her new expose of EdisonLearning’s Capital High School in Columbus, Ohio, For-Profit Schools Get State Dollars for Dropouts Who Rarely Drop In, Heather Vogell demonstrates that Ohio’s problem is much bigger than ECOT, and explores the outrageous scandal across several states of dropout recovery schools sucking profits from the scarce dollars in state education budgets: “Such schools aggressively recruit as many students as possible, and sometimes count them even after they stop showing up, a practice that can generate hundreds of thousands of dollars in taxpayer-paid revenue for empty desks. Auditors have accused for-profit dropout recovery schools in Ohio, Illinois and Florida of improperly collecting public money for vanished students… So-called ‘dropout recovery’ schools are increasingly popular, with many setting up shop in poverty-stricken city neighborhoods. In Chicago this past year, about 8,000 students attended such schools. In Ohio in the 2014-2015 school year, more than 16,000 students did, including some who attended online-only programs.”

Vogell examines the Ohio dropout recovery schools being sponsored by EdisonLearning—Capital High School in Columbus and a chain of 8 EdisonLearning dropout recovery schools across the state, the Magic Johnson Bridgescape Academies: “For-profit school management companies like Capital’s parent, EdisonLearning, have rushed into this niche, taking advantage of the combination of public funding, an available population of students and lax oversight… For EdisonLearning, the move to dropout recovery schools signaled a remarkable downshift in ambition. When launching the Edison Project 25 years before, media executive Chris Whittle and former Yale University President Benno Schmidt held out privatization as a fix for urban schools’ ills…. At its height, Edison managed dozens of schools in cities across the country, including Philadelphia and Baltimore. Whittle and Schmidt left their administrative roles in December 2006. Money troubles and controversies over test scores, staffing and safety forced the company to scale back… By 2013, the Bridgescape program had expanded to 17 schools in six states.”  Eventually Magic Johnson severed his ties with the schools: “In the summer of 2016, EdisonLearning ended its partnership with Magic Johnson and removed his name from schools’ signs… EdisonLearning—which sold off a chunk of its business in 2013—posted a significant loss in the 2016 fiscal year and has closed Bridgscapes in Illinois, Ohio and Virginia. But it is still bullish on dropout education.”

Capital High School, the dropout recovery school featured by Vogell, occupies a storefront in Columbus, Ohio, and although its student attendance ought to be able to be documented more easily than at an online school like ECOT, confirming students’ attendance has been a huge problem for the state of Ohio which pays the tuition: “Last school year, Ohio’s cash-strapped education department paid Capital High $1.4 million in taxpayer dollars to teach students on the verge of dropping out. But on a Thursday in May, students’ workstations in the storefront charter school… resembled place settings for a dinner party where most guests never arrived. In one room, empty chairs faced 25 blank computer monitors. Just three students sat in a science lab down the hall, and nine more in an unlit classroom, including one youth who sprawled out, head down, sleeping.  Only three of the more than 170 students on Capital’s rolls attended class the required five hours that day, records obtained by ProPublica show. Almost two-thirds of the school’s students never showed up; others left early.  Nearly a third of the roster failed to attend class all week. Some stay away even longer.  ProPublica reviewed 38 days of Capital High’s records from late March to late May and found six students skipped 22 or more days with no excused absences… Though the school is largely funded on a per-student basis, the no-shows didn’t hurt the school’s revenue stream. Capital billed and received payment from the state for teaching the equivalent of 171 students full time in May.”

Vogell describes aggressive efforts to recruit students. Some states provide an incentive for high school counselors to recommend that students move to a dropout recovery school: the students no longer count against the public high schools’ graduation rate if the students drop out into an alternative “dropout recovery” school. In other cases recruiters from the for-profit dropout recovery schools take coffee and donuts to meetings with high school counselors from whom they seek referrals. Vogell describes one Midwestern city where the dropout recovery schools engaged church pastors to help with recruitment. Vogell interviewed students’ probation officers who complained that dropout recovery programs with little structure are not helpful to the students they monitor.

This blog has been tracking the scandal at Ohio’s Electronic Classroom of Tomorrow.  Now suddenly in a new development, ECOT will become a new chapter in the story Vogell exposes: Ohio has now initially approved ECOT’s changing its designation to a “dropout recovery school.”

To review: ECOT’s best known problem is that the state has accused it of theft of tax dollars for students the school claims but who are not regularly participating.  We’ll see if the Ohio Supreme Court will uphold a lower court’s demand that ECOT return enormous overpayments, money ECOT has already turned over to the two privately held, for-profit companies that provide curriculum and management services. ECOT’s founder, William Lager, owns both companies and has been collecting sizeable profits which he has shared with Ohio legislators as political campaign contributions. ECOT sued to prevent the state’s clawing back $60 million overpaid to ECOT during the 2015-16 school year, when ECOT charged the state for educating 15,300 students. The state has been able to document only 6,300 students in school at ECOT that school year. Now the state is demanding that ECOT repay $19 million for the 2016-2017 school year.  Although ECOT claimed 14,200 students last school year, the state can document only 11,600.

In the newest development, ECOT has now been initially approved by the Ohio Department of Education as a dropout recovery school.  For years ECOT has been earning an F rating from the state for its students’ test scores and deplorable graduation rate—an F rating which, under a 2015 law, now threatens the survival of its nonprofit sponsor, the Educational Service Center of Lake Erie West. In late September, the Ohio Department of Education agreed to accommodate ECOT’s request that it be declared a “dropout recovery school” instead of a regular online school.  The new designation will automatically change the school’s overall grade from F to C without any added responsibility for ECOT to better serve its students. Ohio, we learn, has lower expectations for the students at dropout recovery schools and will change the school’s overall score, even if the students’ academic performance and graduation rate remain deplorable. All ECOT has to do is prove that the majority of its students are between the ages of 16 and 21 and are in need of special services for students at-risk. The Plain Dealer‘s Patrick O’Donnell adds: “The Ohio Department of Education…. does not audit that claim and leaves it to schools and their oversight organizations known as ‘sponsors’ to make that determination.”

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Ohio Auditor’s Report on Low Attendance at Dropout Recovery Schools Confirms Long Trend

Last October, Ohio State Auditor, Dave Yost sent staffers unannounced to 30 charter schools across the state to see if the headcount of students present matched the number of students the schools had declared were enrolled this year.  Yost announced on January 22, 2015 that, “Out of the 30 schools reviewed, seven were identified as having unusually high variances in students counted by AOS (Auditor of State) staff versus the number of students the schools reported to ODE (Ohio Department of Education).  For example, when AOS staff went into the Academy for Urban Scholars in Youngstown, they found zero students in the school where 95 students were supposed to be enrolled… All seven schools are classified as Dropout Recovery and Prevention schools by ODE and serve predominantly dropout recovery students.” The state reimburses the schools at a per-student rate, based on the number enrolled.

Akron Beacon-Journal reporter Doug Livingston puts the new report from Auditor Dave Yost in context: “According to October enrollment figures self-reported to the Ohio Department of Education, the 30 charter schools were on track to receive $54,592,383 in taxpayer funds to educate 6,985 students.  The auditors, however, counted only 5,524 students.  The more than 1,400 missing students, if they were absent for an entire year, could cost taxpayers $12 million for empty seats…. That $12 million represents 8 percent of the support going to Ohio’s 381 charter schools.  The lowest attendance rates were found at charter schools that enroll students who already have dropped out of a traditional public school and are at least a year behind.  These ‘dropout recovery’ schools had, on average, a 50 percent attendance rate,” when Yost’s staff made their unannounced visit last October.

According to Yost’s January 22 report, one of the problems is that “dropout recovery” schools are permitted in state law to use a strategy called “blended learning,” “the delivery of instruction in a combination of time in a supervised, physical location away from home and online delivery where the student has some element of control over time, place, path or pace of learning.  The combination of on-site and online instruction for community schools, offering blended learning opportunities increases the risk of noncompliance with enrollment documentation requirements.”

Yost’s office explains that the charter schools that offer blended learning opportunities “must carefully document both the physical attendance of students as well as their participation in online learning opportunities as verified by log in records.”  And that is where one is reminded of Ghost Schools, a very similar report by Scripps Howard News Service back in 2008.  Ghost Schools tracked poor attendance at Ohio’s “dropout recovery” schools, which had at that time been around for a decade.  “The dropout-recovery school movement began in 1998 in Ohio, and in recent years has been averaging about $30 million a year in state payments for absent students.  Taxpayers have paid more than $100 million in the last five years through this system.”

Ghost Schools focuses on David Brennan’s White Hat “dropout recovery” schools as those with the worst record for both attendance and performance.  “The Ohio Department of Education requires schools to take action if absenteeism exceeds 7 percent, although dropout-recovery schools have been exempted from the rule… The Ohio schools with the worst attendance are the 17 Life Skills Centers run by the for-profit company White Hat Management, founded by Akron, Ohio businessman David Brennan.  The company operates 20 more Life Sills Centers in Arizona, Colorado, Florida and Michigan, many of which also have high levels of absenteeism.”

The Scripps Howard reporters explain, “Under Ohio law, truant students must be dropped from the enrollment lists after missing 105 hours of instruction.  But former employees and students at Life Skills Center schools said habitually truant students were kept on the active enrollment lists.  Former employees said they were routinely sent to students’ houses to obtain written excused absences using a standard form the company developed.  Then the absence became ‘excused’ until another 105 hours were missed.”  A supervisor for the Ohio Department of Education told the reporters, “the auditing methods used to determine how many full-time equivalent students (FTEs) are actually attending a school does not allow for any challenge of the accuracy of excused absence forms, other than to confirm that they exist.”

Back in 2008, the Scripps Howard reporters conducted the same kind of  headcount repeated by Yost last October, and with similar results: “The Ohio Department of Education during the 2007-2008 school year paid White Hat Management $1.5 million to teach 264 students enrolled at the Columbus school.  But a headcount by Scripps Howard News Service found that only 122 teenagers and young adults actually went to class on May 1, a typical school day.  It’s a figure school officials didn’t challenge.  Similar checks at Life Skills Center campuses in Akron and Cleveland also found that less than half of enrolled students actually went to class.”

One suspects that the records described in Yost’s new audit— of time spent in “blended learning” computer study outside of class—are not any better verified than the absence excuse forms Ghost Schools reported were collected and filed back in 2008.

The lax regulation of Ohio’s “dropout recovery” charter schools is widely believed to derive from the political power of White Hat Management owner David Brennan.  According to a recent report from Innovation Ohio and the Ohio Education Association, Brennan and his wife, Ann, have contributed more than $4 million in campaign donations since 1998 to Ohio legislators and other state officials.  One wonders if we will read the same report eight years from now about tax dollars being redirected out of Ohio’s public school education budget into the coffers of the huge charter operators whose profits help them buy weak regulation of Ohio’s charter sector.

In Ohio, Political Contributions Yield Budget Gift for White Hat’s David Brennan

Here’s what happened in Ohio’s mid-biennium budget review bill, signed into law on Monday by Governor John Kasich.  The governor and the legislature rewarded David Brennan, who runs the White Hat Life Skills Academy “dropout recovery” schools.  According to Brent Larkin in the Cleveland Plain Dealer, David Brennan “has poured more than $4 million into the coffers of Republican candidates in Ohio during the past decade.”

Recently this blog covered the scandal of Ohio’s so-called “dropout-recovery” charter schools, a scandal that has been exposed by Doug Livingston of the Akron Beacon Journal.  These schools offer students who have dropped out or are in danger of dropping out the opportunity to sit in a cubicle with a computer for four hours each day to recover enough credits to graduate from high school.  The state pays the dropout-recovery schools for all the students who are supposedly enrolled, but the dropout rate at these schools is higher than at any other secondary schools in the state, and the state keeps on paying for several weeks after the students stop attending.  Livingston has demonstrated that these schools are, in fact, driving up Ohio’s high school dropout rate.

Livingston writes, “Absenteeism tops the reasons why students drop out; charter schools continue to collect tax dollars for more than a month while they are gone.” “Administrators call it churning’ or ‘school hopping’—when student drop out, disappear for months and then return.”  “The state requires that students who are absent or truant for more than 23 days be taken off school rolls, but during that 23 days, the state reimburses the school. Livingston explains: “There were more than 11,000 removals for truancy last year, meaning taxpayers paid for perhaps 253,000 days of no student instruction, or the equivalent of 1,400 empty desks for an entire school year.”

So, what happened in the new mid-biennium budget review bill signed by the governor this week?  The state, according to the Plain Dealer‘s Larkin, has already been wasting money paying for students up to age 22 to attend “dropout recovery” charters that themselves account for 66 percent of Ohio’s high school dropouts.  The new bill allows such students to continue at White Hat Life Skills Academies and the state’s other designated “dropout recovery schools,” at state expense, until they are nearly 30 years old.  While this may sound like a good way to give young adults a second chance, it is far from the ideal plan.  Governor Kasich himself had already proposed a better state program that would, at state expense, enable community colleges and career-technical schools more suited for adults to begin serving Ohio’s adult high school dropouts who have already earned at least ten credits toward high school graduation.

Here is how the Plain Dealer‘s Larkin describes the story of what happened as the legislation was crafted: “The House approved paying White Hat and other schools $5,000 per student to attend schools that have ‘already failed’ those students.  Recognizing this as a total scam, the Ohio Senate removed that language from the bill.  Unfortunately, when legislators met to reconcile the differences, the House version resurfaced.”  On Monday, when Governor Kasich failed to use the line-item veto he is permitted in a budget bill, he preserved the House’s reward for David Brennan.

In a short editorial update, the Akron Beacon Journal comments: “The Republican majority in the House, led by Speaker William Batchelder, pushed for the provision, the item resurfacing in the conference committee.  What explains its presence, if not the merits?  The speaker invites the impression of his team doing the bidding of David Brennan, an influential donor to Republicans whose White Hat Management includes in its portfolio the operation of dropout recovery programs.  So a set of charter schools with a lousy record of achievement now has an additional avenue to public money.”