Archives for category: For-Profit

If data and research matter, the worst reform in U.S. education is the virtual charter school.

The League of Women Voters–one of the few national organizations with integrity about education issues (I.e. has not been bought by the Gates Foundation) issued a report about these floundering “schools,” that typically have low test scores, high dropout rates, and low graduation rates. Only a devotee of the Jeb Bush reform school would want to invite these ineffectual schools into their state. Poor New Mexico. Its acting state commissioner Hannah Skandera used to work for the Jebster himself, so whatever Florida has done to bring in for-profit hucksters must be brought to New Mexico, of course.

So New Mexico has a K12 virtual charter (listed on the New York Stock Exchange, founded by the Milken brothers), and a Connections Academy, owned by the much unloved Pearson.

Here is the study conducted by the New Mexico League of Women Voters.

Here is an article by Bonnie Burn in the Las Cruces Sun-News explaining why the League of Women Voters opposes for-profit schools. Actually, she is wrong on one point. There is a growing body of research that shows the ineffectiveness of virtual charters. However, they are highly profitable.

Will the Secretary of Education Arne Duncan speak out against for-profit virtual charters? Will elephants fly?

This prize-winning story by investigative reporter Colin Woodard follows the money trail in Maine, as Governor Paul LePage seeks to make a name for himself in the world of digital learning. It was originally published two years ago, but remains relevant. Woodard dug through more than 1,000 documents that he obtained through the Freedom of Information Act, and his story won the George Polk award.

Laura Chapman writes in response to a post about OECD ratings for higher education in different nations based on ability of adults to answer standardized test questions. This comes as the U.S. Department of Education has declared its intention to rate, rank, and evaluate colleges and universities by a variety of criteria, then to tie funding to ratings. That is, to bring the data-based decision making of NCLB to higher education.

Chapman writes:

“OCED should not be messing around with ratings of higher education programs based on totally flawed assumptions, statistical and other wise.

“Meanwhile, two developments bearing on higher education in the United States are worth noting.

“ALEC, the conservative provider of model state legislation, wants to close a lot of public colleges and universities on a fast track.

“According to Politico (June 27, 2014) in ALEC’s next meeting members will consider endorsing the “Affordable Baccalaureate Degree Act,” which would require all public universities to offer degree programs that cost less than $10,000 total for all four years of tuition, fees and books.

“What’s more, the bill would mandate that at least 10 percent of all four-year degrees awarded at state schools meet that price point within four years of the act’s passage.

“Universities would be encouraged to use online education and shift to competency-based models rather than the traditional credit-hour model to keep costs down. If members of ALEC endorse the bill, they will begin circulating and promoting it in state legislatures.

“I think the bait will be taken in state legislatures. This is a fast track toward the demolition of higher education with the political point of saving taxpayers money. The suggested cap on the cost at $2,500 a year for two full semesters of course work is about what my undergraduate program cost in the mid 1950s.

“I believe part of the intent is to devalue specific degrees, namely those in the liberal arts and humanities, and “impractical” sciences (e.g., archaeology, philosophy, and history) where competencies are not cut and dried and tend to consolidate over multiple years. The unstated agenda is for all public colleges and universities to function as engines for economic growth, literally as vocational schools, with on-line completion of specific tasks the primary evidence of competence. ALEC model legislation also opens the door for more degrees based on “skill sets” from life experience–not entirely without merit—but a can of worms and general attack on the value of formal education, leaving only a diploma or certificate as a credential worth the investment.

“Concurrently, the Gates Foundation is promoting the use of the same flawed measures being foisted on K-12 education for higher education, specifically a version of student learning objectives (SLOs) to rate teachers, courses, programs, and entire universities on their success in improving “outcomes.”

“Aided by first-year funds from The Bill and Melinda Gates Foundation, nine states and 68 participating two-year and four-year institutions will document how well students are achieving key learning outcomes. The Association of American Colleges and Universities and the State Higher Education Executive Officers Association appear to have bought into this version of K-12 accountability including a process that sounds just like that “multi-state” project known as the common core initiative.

“In essence, these institutions are being enticed to think that Peter Drucker’s debunked theory of management–by-objectives (The Practice of Management, 1954) is the best way to map learning outcomes of higher education, course by course, with “summative” grades for programs, and for the institution as a whole- one size fits all. The whole project is marketed as value-based education— a phrase that is likely to tempt statisticians into using all the new metrics into dubious evaluations of faculty performance. See http://www.aacu.org/”

Arthur Camins, Director of the Center for Innovation in Engineering and Science Education at the Stevens Institute of Technology in Hoboken, NJ., points put that drug makers are not allowed to make unsubstantiated claims. They are required to gather evidence and to disclose possible negative side effects. They can make boasts, offer up dubious facts, and get away with it. They speak about the individuals’ “right to choose” without acknowledging the harm to the community’s public institutions.

In a thoughtful article, Camins says that the debate about school reform has been obscured by “the fog of war,” a public relations blitz that appeals to individualism and self-interest, replacing evidence and any sense of the common good.

He writes:

“One weapon in the arsenal of opponents of current policies has been to point out the absence of evidentiary support. In fact, there is no system inside the U.S. or around the world that has made substantial systemic progress through charter schools, merit pay or test-driven accountability. Resistance is growing, but so far this line of attack has not built enough widespread public understanding to deter policy makers. Maybe that is because the supporters of these policies have effectively obscured their real goals and values.”

He concludes::

“Stories of dysfunctional, conflict-plagued, private agenda-driven local school boards abound. There are countless examples school boards making uniformed decisions that do not serve the interests of children. However, privatization and shrinking of public participation in decision-making is not an antidote to ineffective, uninformed democracy. Public knowledge and clear-eyed evidence are. History is replete with evidence that the side effect of disenfranchisement in the name of improvement is benefits to the few and disaster for the many. Arguments that restricting democracy will benefit everyone have always been the coins of autocrats and self-appointed experts driven by blind faith or ideology and narrow self-interest.

“The drive to privatize educational governance, especially with respect to expansion of charter schools, has two unstated goals. One is to open up the vast education market to individuals looking for a new profitable place to invest their capital. Another is more cynical. Some people have given up hope for systemic improvement. Instead, they are willing to settle for a system that only provides an opportunity for those they deem to be the deserving and capable few among the unfortunate many. Hence, the negative disruptive side effects of school closings in poor communities are the price that the many will pay to save the lucky few.

“Let’s report the evidence and side effects so the public can decide: Which side are you on? Are you willing to give up your right to democratic participation and risk the future of your child or your neighbor’s to privilege the lucky few? Are you ready to give up on the common good?

“For the sake of clarity, I’ve attempted to present complex issues in binary terms. Assuredly, there are gradations. In reality, ensuring the wellbeing of individuals is inseparable from advancing the common good. The old labor slogan, an injury to one is an injury to all, said it simply, but well. Put another way, my personal gain is diminished or even negated when it comes at the expense of another.

“We need an educational system based on these values. I think, when asked, the public may agree.”

New Mexico’s purchasing agent approved the award of a contract to Pearson to develop the Common Core PARCC tests, despite the absence of competitive bidding. AIR had lodged a complaint against the process since Pearson was the only bidder. The New Mexico contract covers testing of 6-10 million students in 14 states. It is worth about $1 billion to Pearson.

“Last December, the Washington DC-based American Institute for Research filed a protest with the state purchasing agent arguing that the bid for the contract was written favorably for Pearson. Namely, AIR’s takes issue with how the bid required the winner of the contract—whether it was Pearson or a different company—to use Pearson’s online testing system for the first year of testing.

“Such requirements were uncompetitive to other companies, AIR argued. Indeed, only Pearson responded to the request for proposal for the PARCC contract.”

AIR is deciding whether to appeal the decision to the judicial system or drop their appeal.

The following article is by Patricia W. Hall, chair of the League of Women Voters Education team in Hillsborough County, Florida. It was originally published by La Gaceta in Tampa, Florida. The state League of Women Voters recently published a one-year study of charters across Florida.

Charter School Explosion: Follow the Money

Patricia W. Hall

Although charter schools must, by Florida law, be overseen by a non -profit board of directors, there are many ways in which for-profit organizations have begun to highjack the charter school movement. For-profit management companies frequently provide everything from back office operations including payroll, contracting with vendors for food services, textbook, etc., to hiring principals and teachers and curriculum control; so what was sold to parents and children as a local public education innovation now looks more like national charter-chains, the “Waltmartization” of public education. According to education expert Diane Ravitch, “nearly half of all charter school students are enrolled in a charter chain school” in the United States. The top four charter operators in Florida for 2011-2012 were Academica (72), Charter Schools USA (37), Charter School Associates (20), and Imagine Schools (23). These are not the small, locally run experimental schools envisioned by the original legislation.

The real profits, however, are not in the operation of the charter school, but in the real estate development. After receiving a variety of grants, loans and tax credits for building a charter school, the for- profit chain charges ever escalating rents and leases to the school district, paid by tax-payer education dollars. The for-profit then reaps the profits when the building is sold in a few years. Meanwhile the properties with high, non-taxable, values based on claimed “commercial” revenue streams from public tax-payer dollars are leveraged to borrow additional funds to build more school buildings.

Our shining local examples in Hillsborough County are owned by Charter Schools USA. My first glimpse of Winthrop Charter School in Riverview in November of 2011 was during a scheduled visit with then Rep. Rachel Burgin. When told the two story brick building was a charter school, I was mystified. The site on which it was built was purchased from John Sullivan by Ryan Construction Company, Minneapolis, MN. From research done by the League of Women Voters of Florida all school building purchases ultimately owned and managed by for-profit Charter Schools USA are initiated by Ryan Construction. The Winthrop site was sold to Ryan Co. in March, 2011 for $2,206,700. In September, 2011 the completed 50,000 square foot building was sold to Red Apple Development Company, LLC for $9,300,000 titled as are all schools managed by Charter Schools USA. Red Apple Development is the school development arm of Charter Schools USA. We, tax payers of Hillsborough County, have paid $969,000 and $988,380 for the last two years to Charter Schools USA in lease fees!

The big prize purchased by Ryan Co. at the same time, March of 2011, was the 58,000 square foot former Verizon call center on 56th Street in Temple Terrace for $3,750,000. Ryan Co. made no discernible exterior changes except removal of the front door, added a $7,000 canopy and sold the building as Woodmont Charter School to Red Apple Development for $9,700,000! Who would not love a $6 million dollar boost in 6 months? Lease fees for the last two years were $1,009,800 and $1,029,996! Are we outraged yet? Woodmont made headlines in the Tampa Bay Times this spring as an “F” rated (FCAT score) school advertising for new students and a fired teacher reporting that out-of-field teachers and uncertified teachers were on the faculty.

Similar figures exist for the last of the triumvirate for CSUSA, Henderson Hammock Charter School in Citrus Park which opened in 2012. Their lease fees are the largest of the three, $1,170,000 for 2012-3013 and $1,193,400 for 2013-2014!

These three Hillsborough schools opened since 2011 enroll more than 20% (2,799) of all charter students: Winthrop – 1,254; Henderson Hammock-895; and Woodmont-650. The other for-profit management companies in our county are Charter School Associates with 10 schools, the Leona Group with two small schools and Accelerated Learning Solutions with two virtual (online instruction) high schools. These four for-profit management companies, including Charter Schools USA, control the finances for 17 of the 42 charter schools in Hillsborough County.

In Florida, according to the League of Women Voters Statewide Charter School Study, the three largest for-profit management companies (Academica, Charter Schools USA and Imagine) control 27% of all charters. The proposed MacDill Charter School was rejected by Hillsborough County Schools because of questions regarding governance (the people running the school) which will be covered in the next article.

The high per student management fees (around $450 ) plus rent/lease fees (at least 20% of the total school budget) mean that there is less funding available for “instruction,” including teacher salaries, books, etc. In Florida Trend Magazine, Jonathan Hage, CEO of Charter Schools USA, brags his biggest efficiency is in administration. Where Miami-Dade County spends $2,036 per child on administrative costs, he spends $1,425. In Hillsborough that equates to 2,799 children times $1,425 equaling $3,988,575! That is money in his “pockets,” not instructing children who need to be educated.

In addition to direct funding of charter schools, the federal government provides tax breaks to encourage banks and individuals to invest in charter school construction. The Community Renewal Tax Relief Act of 2000 included the New Markets Tax Credit, which provides wealthy investors with a 39% tax credit that more than doubles returns on these charter school construction investments within seven years. Furthermore the head of Entertainment Properties Trust – a large real estate investment firm – David Bain, appeared on CNBC in 2012 telling the audience “how profitable charter school investment has become.”

While you are shaking your head at the implausibility of the aforementioned investment, hold on! The Immigrant Investor Program, also known as EB -5 (Employment Based to the 5 Category) Program permits foreigners who make investments in charter schools to bring their whole family to the U.S. on green cards! Wealthy foreigners can contribute just $1,000,000 toward urban charter school development or $500,000 in a rural area, they are required to create 10 jobs for Americans and the investor gets visas for the whole family!

We discovered that Ryan Construction Company, in collaboration with Red Apple Development and the Florida Development Finance Corporation, secured a mortgage and loan agreement for multiple sites with Regions Bank in Tallahassee for $55,800,000 tax-exempt series (the “Series 2012A Bonds”) and $3,520,000 taxable series (the Series 2012B Bonds ). This transaction was November 1, 2012. Red Apple Development had secured a mortgage from Church Loans and Investments Trust dba CLI Capital in Texas for $9,841,000 for the Woodmont Property in late 2011; they paid off the nearly $10,000,000 mortgage in 16 months (January of 2013) by virtue of the $55,800,000 “windfall”.

From The Tampa Bay Times opinion editorial April 1st, 2014 “Another area where the distinction between public and private is blurred for the benefit of for-profits is the issuing of bonds. Although Florida law prohibits charter schools from issuing bonds, Charter Schools USA has found a way. When naming Jon Hage as Floridian of the Year, Florida Trend in December 2012 contended that Charter School USA is the largest seller of charter school debt in the country. “It will sell $100 million worth of bonds this year (2012-13), Hage says. . . The bonds come with tax-exempt status because they are technically held by the non-profit founding boards that oversee the schools.”

As you can see “following the money” in the for- profit charter sector is very complex and, in some cases, impossible. Audits are incomplete and, because of the blurred line between the non-profit and for-profit entities, requests for information are rebuffed, as these charter chains claim to be “public” when seeking public education dollars and “private when avoiding accountability. As one of our LWV members characterizes their attitude, “Heads we win, tails you lose.”

America’s for-profit education industry is BIG BUSINESS on a global scale. Charter school profiteering is alive and thriving in Florida and many other states. Profit is the end game with profits trumping public good. What happened to “corporate social responsibility” and political ethics??

In response to a post by Peter Greene (“The Arne Duncan Drinking Game“), this reader describes the National PTA convention in Texas. The National PTA has received $2.5 million from the Gates Foundation, including $500,000 specifically for Common Core. Also, the National PTA provided a screening of the anti-public school “Waiting for Superman” at its annual convention in 2011. Odd.

She writes:

“I was at that PTA convention in Texas and I bit my tongue through his entire speech. I wanted to throw up. I have lost faith in the PTA. While I love what PTA does at a local level for our schools, I am sickened by what I see at the state and National PTA levels. Our voices as members have been sold out to corporate interests, and the top leadership is out of touch with parents today. Most of the top leaders dont even have children in public schools anymore so they think we are overreacting about the excessive testing and problems with common core. The leaders enjoy the power and prestige of their office and won’t listen to parents and teachers.

“Even more alarming, the general meetings at the national PTA convention were sponsored by Discover Card, Microsoft, and Pearson. During the general meetings, attendees were forced to sit through 15 minute commercials about their corporations and hear about their “partnerships” with PTA. The week before the convention, delegates received emails from PTA with advertisements for Pearson, telling us to be sure to stop by Pearson’s booth in the exhibit hall. How much did PTA get to spam our inboxes with marketing? We paid a lot of money to attend that convention, I don’t appreciate my email address being sold like that, especially to Pearson.”

Charter schools have been the beneficiary of a myth, the myth that a free market in schooling will produce miraculous results. Unfortunately, like most myths, it is not true. Deregulation translates into lack of supervision and oversight. In the absence of supervision of public funds, scams, frauds, and corruption flourish.

Jeff Bryant here reviews some of the egregious examples of charter school corruption in Ohio, Michigan, and Florida. Billions of taxpayer dollars are being transferred to the private sector, where no one supervises how those dollars are spent. Worse, the businesses that get the money spend large sums to hire lobbyists and to contribute to key legislators to make sure their charters remain free of oversight.

It is alarming that Congress is about to hand more money over to the same shady entrepreneurs and to encourage more of them to jump into the unregulated, very profitable charter industry.

The Detroit Free Press is running a week-long series about Michigan’s charter sector. The first story was about a $1 billion industry with no accountability and poor results. Most charters in the state operate for profit.

The industry’s response? National Heritage Academies, a for-profit charter chain, bought up the advertising space around the story to tout their wares. See the screen shot.

Peter Greene comments here on the U. S. Department of Education’s decision to bail out Corinthian Colleges, Inc., a for-profit chain.

 

Not so long ago, the U.S. DOE pledged to monitor predatory for-profit colleges. Not so, it seems.  Not now.

 

Greene writes:

 

“Corinthian has a somewhat checkered past. Okay, checkered might be generous. They have grown prodigiously since being founded in 1995, acquiring around twenty other post-secondary institutions from Duff’s Business School to the American Motorcycle Institute. They operate the Everest College chain, plus a few others. They’ve been called “the nation’s worst private college chain” and have been sued more times than anybody seems to be able to count. The State of California in particular seems to be intent on driving them out of business, charging them with the usual predatory practices of marketing to poverty-level folks with promises of careers that never appear. This would also be the chain who got caught (by Huffington Post, of all people) hiring their own grads to keep their grad-employment numbers up.

They are, in short, exactly the kind of for-profit college that the feds said they were going to shut down.”

 

The announcement was made by Ted Mitchell, Undersecretary of Education, who served previously on the boards of for-profit education institutions and was CEO of NewSchools Venture Fund, which is a major supporter of privatization efforts.

 

 

 

 

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