Archives for category: For-Profit

K12 Inc. is a for-profit virtual charter school chain that trades on the New York Stock Exchange. It was founded by Michael Milken and Lloyd Milken. It is funded with taxpayer dollars. It advertises and recruits heavily to keep enrollment up. It has a high attrition rate.

Its cash-cow operation is the Ohio Virtual Academy. Look for significant lobbying in New Jersey, Illinois, Connecticut, Kentucky and New York, according to the investor conference call.

I don’t know about you, but I had a hard time reading this transcript. They might just as well have been discussing a corporation that sells tires, toothpaste, bundled mortgages, or manure. These guys are profiting from taxpayer dollars that are supposed. To pay for public schools, for bands, for nurses, for guidance counselors, for reduced class sizes, for libraries. They are taking money away from real instruction, real children, real schools. Have they no sense of shame? Would any of the investors on this call put their own children in a K12 virtual charter school? Bet not. Bet their kids are in really nice suburban schools or elite private schools.Not sitting in front of a computer and calling it a “school.” It’s not. It’s a business, and the kids it recruits don’t get an education.

NOTE: I just learned that I am allowed to quote only 400 words from the transcript, so accordingly, I will count 400 words and delete what remains.

http://investors.k12.com/phoenix.zhtml?c=214389&p=irol-reportsannual

RISK FACTORS (Page 33-48)

Page 42

“We generate significant revenues from two virtual public schools, and the termination, revocation, expiration or modification of our contracts with these virtual public schools could adversely affect our business, financial condition and results of operation.

“In fiscal year 2013, we derived approximately 11% and 14% of our revenues, respectively, from the Ohio Virtual Academy and the Agora Cyber Charter School in Pennsylvania. In aggregate, these schools accounted for approximately 25% of our total revenues. If our contracts with either of these virtual public schools are terminated, the charters to operate either of these schools are not renewed or are revoked, enrollments decline substantially, funding is reduced, or more restrictive legislation is enacted, our business, financial condition and results of operations could be adversely affected.

“Note at a k12, inc investor conference call on 10/9 the company addressed the loss of the management agreement for Agora Cyber Charter School in PA. http://www.huffingtonpost.com/2014/10/01/charter-schools-k12_n_5914580.html

“The school will continue to use the k12, inc curriculum, but will self-manage.
http://www.marketwatch.com/story/k12-inc-awarded-contract-to-be-curriculum-provider-for-agora-cyber-charter-school-2014-10-09″

Here is the transcript of the investor conference call. Grab your vomit bag.

http://seekingalpha.com/article/2559155-k12-inc-2015-guidance-update-call-oct-09-2014?part=single

K12, Inc., 2015 Guidance/Update Call, Oct 09, 2014

Oct. 9, 2014 3:30 PM ET | About: K12 Inc. (LRN)

K12 Inc. (NYSE:LRN)

October 09, 2014 8:30 am ET

Executives

Mike Kraft – Vice President of Investor Relations

Nathaniel Alonzo Davis – Executive Chairman and Chief Executive Officer

James J. Rhyu – Chief Financial Officer and Executive Vice President

Timothy L. Murray – President and Chief Operating Officer

Analysts
Jeffrey P. Meuler – Robert W. Baird & Co. Incorporated, Research Division
Corey Greendale – First Analysis Securities Corporation, Research Division
Jason P. Anderson – Stifel, Nicolaus & Company, Incorporated, Research Division
Trace A. Urdan – Wells Fargo Securities, LLC, Research Division
Sou Chien – BMO Capital Markets Canada

Operator

Greetings, and welcome to the K12 Inc. Guidance Conference Call for Fiscal Year 2015. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mike Kraft, Vice President of Finance. Please go ahead, sir.

Mike Kraft – Vice President of Investor Relations

Thank you, and good morning. Welcome to K12’s Fiscal Year 2015 Guidance Conference Call. Before we begin, I would like to remind you that in addition to historical information, certain comments made during this conference call may be considered forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and should be considered in conjunction with cautionary statements contained in our guidance release in the company’s periodic filings with the SEC.

Forward-looking statements involve risks and uncertainties that may cause actual performance or results to differ materially from those expressed or implied by such statements.

In addition, this conference call contains time-sensitive information that reflects management’s best analysis only as of the day of this live call. K12 does not undertake any obligation to publicly update or revise any forward-looking statements.

For further information concerning risks and uncertainties that could materially affect financial and operating performance and results, please refer to our reports filed with the SEC, including, without limitation, cautionary statements made in K12’s 2014 Annual Report on Form 10-K. These filings can be found on the Investor Relations section of our website at http://www.k12.com.

This call is open to the public and is being webcast. The call will be available for replay on our website for 60 days.

With me on today’s call is Nate Davis, Chief Executive Officer and Chairman; Tim Murray, President and Chief Operating Officer; and James Rhyu, Chief Financial Officer. Following our prepared remarks, we will answer any questions you may have.
I would now like to turn the call over to Nate. Nate?

Nathaniel Alonzo Davis – Executive Chairman and Chief Executive Officer

Thank you, Mike. Good morning, everyone. Thanks for joining us on the call today. We wanted to provide you with an update on our fiscal year 2015 count date enrollment as well as a guidance for the first quarter and for the full year.

Today’s guidance is a reflection of the trends in the markets that I outlined during our fourth quarter earnings call. Specifically, we saw a couple of our charter schools deciding to self manage their online learning programs. We’re also seeing more traditional school districts offering their own full-time online programs, along with supplemental learning options and online summer courses.
Education is evolving for the better, and families today have more choices in choosing full-time or part time virtual programs for their child. We believe that overall demand for virtual options in education is increasing, and this is translated into stronger demand for our institutional group, Fuel Education or FuelEd, which provides content and curriculum to school districts as well as private and charter school operators. At the same time, these market dynamics have also created a challenge to enrolling students in our traditional managed programs. And to help you understand this transition, we’re providing new guidance on student enrollment and revenue to clearly outline how K12 is participating in the growth of online learning use in public school classrooms.

Student enrollment and revenue data will now be provided for Managed and Non-managed Programs. Managed Programs are where K12 provides substantially all of the administration and education program management for an online program. Non-managed Programs include schools where K12 is the primary provider of content and technology and we may even provide instruction, management or other educational services, but K12 is not providing primary administrative oversight for the virtual school program.
And as you can see from the data we provided in this morning’s release, the 4.7% reduction in student enrollment from managed schools reflects this new market dynamic. It also reflects the events in Tennessee, where the state imposed an arbitrary enrollment cap midway through the enrollment season; and in Colorado, where our school partner took longer than expected to finalize their charter and subsequently, the curriculum contract with K12. We believe that enrollment in these 2 states were impacted by over 4,000 students this season. Also, this year, K12, in collaboration with the school boards we serve, made a concerted effort to keep students enrolled only if they were truly engaged and ready to learn, which also affected Managed Program enrollments.

Our partners are serious about running high-quality charter schools, with students who realize this is hard work. And they want to succeed by putting in the work. And while this is slow to growth in the near term, it better matches students to our core curriculum strengths and improves our reputation as a firm who is serious about providing high-quality education.

Even with the market evolution that’s beginning to unfold, we continue to see strong demand in Managed Public Schools. This year, we saw solid growth in select markets, including Texas, Michigan, Florida and Georgia. And at some point, we believe states like New Jersey, Illinois, Connecticut, Kentucky and New York will become states that allow online charter schools, although these states could take quite some time before opening up.

We will also attempt to be one of the educational management organizations chosen in North Carolina as that market commences an online charter trial next year.

[NOTE: I deleted the remainder of the conference call to abide by the guidelines of the company that supplied the transcript. It was hard to know which words count towards the 400 permissible, like instructions, the operator’s comments, the names of participants, etc. I cut copiously.]

I have always hoped that leaders of the charter industry would call out the frauds in their midst. Where to start? It looks like they have finally turned against the profiteering of Imagine charters. This is from politico.com:

“CRONY CAPITALISM IN THE CHARTER SECTOR? Imagine Columbus Primary Academy in Ohio plans to spend $700,000 on rent this school year. That’s more than the charter school will spend on salaries and benefits, The Columbus Dispatch reports [http://bit.ly/1yrG77D ]. The cost of rent will eat up more than half of the school’s annual state revenue. Meanwhile, Imagine Schools Inc. – one of the nation’s largest charter school operators – rakes in hundreds of thousands in public tax dollars. It’s all thanks to a complicated real estate maneuver, the Dispatch said Sunday. A subsidiary of Imagine Schools Inc., named SchoolHouse Finance, buys buildings and resells them for two or three times the purchase price. SchoolHouse Finance then leases the building from the new owner and rents the space back to Imagine. “It’s legal, but that doesn’t mean it should be,” said Greg Harris, Ohio director of StudentsFirst, an advocacy group that supports charter growth. “We don’t want charter-school operators profiting as landlords.”

- “Let’s call this what this is: Crony capitalism,” Fordham Institute President Michael Petrilli tweeted [http://bit.ly/1s7ZXzT]. At least three states and Washington, D.C. are investigating Imagine for similar practices, the Dispatch noted. One state even shuttered schools operated by Imagine. After an investigation conducted by the St. Louis Post-Dispatch in Missouri, the state board of education shut down six schools run by Imagine in 2012. The paper uncovered real estate deals similar to the ones happening in Ohio and poor academic performance.”

This is a dynamite article about the predatory for-profit higher education sector by Glen Ford of Black Agenda Report. He pulls no punches.

He writes:

“The dominos are falling in the for-profit college racket, a cauldron of corruption that has crushed the dreams of millions of African Americans in desperate search for tools to navigate their way through a racist, cut-throat capitalist society. Corinthian College’s stock fell from a peak of $33 a share, ten years ago, to 33 cents last month, when it became clear that the federal government intended to pull the plug on the $1.6 billion a year rip-off. Corinthian – known to victims by the brand names Heald College, Everest, and WyoTech – will soon file for bankruptcy protection, shielding its bankster and hedge fund profiteers from liability for wanton theft and massive life-wrecking. More than 70,000 students at 107 campuses, half of whom were statistically certain to drop out before completely their courses, will struggle to find another route to mobility and dignity.

“Corinthian is only the third or fourth-worst offender in the pantheon of for-profit colleges created for the sole purpose of diverting public money to the coffers of hedge funds and mega-banks. Although the titans of this fraudulent industry have committed crimes far larger than Bernard Madoff, none of them will join him in prison, since their victims are largely Black people whose usefulness to Wall Street is limited to availability for super-exploitation, demonization and incarceration.

“Corinthian’s collapse – and the panic that reigns in the rest of the for-profit education pack – was triggered by the Obama administration’s decision to shut off the criminal enterprise’s federal funding faucet, which accounted for at least 83 percent of the company’s revenue stream. Since Corinthian, like its sister shysters, was created as a pass-through of federal dollars, it could not withstand the slightest pause in payments from various federal agencies. So, it folded. Other corporate educational fraudsters will soon follow Corinthian into bankruptcy, causing a shakeup in the industry that will probably result in a leaner and more vertically integrated structure of dream-sploitation. Billions of educational dollars will continue flowing straight from federal programs to Wall Street, but with little improvement to the life-chances of the supposed beneficiaries: the educationally deprived.

“The Obama administration may abhor the chaos in which players like the University of Phoenix and Ashford University have become the top producers of baccalaureate degrees among Blacks. But the administration – and the Democratic Party, as an institution – also worships at the alter of privatization. Rather than eliminate the felonious educational enterprises root and branch – and spend the money on a nationalized system of free education – Obama will continue to provide tens of billions to nourish the poisoned tree.”

Every year we spend $32 billion on these for-profit institutions. Why not use that money for tuition-free colleges for students who need higher education–and bypass Wall Street?

Ford adds:

“In previous decades, African American political leaders would have been out front in demanding a public agency to respond to the phenomenal Black craving for educational services. However, much of the Congressional Black Caucus has succumbed to the bribery of for-profit sugar daddies who, according to Sen. Durbin, “own every lobbyist in town.” Among the legions of for-profit lobbyists is Black former Maryland Rep. Al Wynn (who, while in office, acted as the Black Caucus bag-man for the corporate Democratic Leadership Council). Florida Congressman Alcee Hastings collected at least $54,500 from the education rip-off industry, according to David Halperin’s April 3 article in The Nation, “The Perfect Lobby: How One Industry Captured Washington, DC.”

“Hastings featured prominently in the groundbreaking May 27 Huffington Post piece “How the Congressional Black Caucus Went to War with Itself Over Wall Street,” which described his “epic argument” with Rep. Maxine Waters (D-CA) in 2011. Waters blasted Hastings “for sponsoring a measure that was seen as a gift to shady for-profit colleges. What was more embarrassing than selling out, Waters told her assembled colleagues, was selling out cheap to nickel-and-dime scammers like the for-profit college industry. If you’re going to sell your soul, she admonished, have some self-respect and sell high. (Hastings didn’t dispute the conflict, but he did dispute Waters’ point. ‘It would be a mistaken premise,’ he says, smiling. ‘There are a hell of a lot of for-profit schools.’)”
Key members of the unelected Black Misleadership Class are also beholden to Wall Street’s for-profit federal educational money conduits. The National Urban League got a $1 million check from now-doomed Corinthian Colleges after president Marc Morial wrote a favorable op-ed in the Washington Post. Morial then joined Corinthian’s board of directors, a sinecure that is worth between $60,000 and $90,000 a year in cash and deferred stock.

“Al Sharpton, the MSNBC host and presidential pit bull, reciprocated the University of Phoenix’s sponsorship of his TV special Advancing the Dream with a puff piece on the for-profit giant’s online offerings, featuring the NFL’s Larry Fitzgerald, a Phoenix student and booster. Phoenix University excels all others in funneling Black people’s educational dollars directly to Wall Street via the Apollo Group, a $5.36 billion corporation with ties to the super-predatory Carlyle Group.”

“For-profit education has diverted many billions of dollars that Black students never actually possessed for even one moment– but will owe for much of the rest of their lives – into the accounts of the fabulously wealthy.”

And Ford writes:

“One exception is historically Black colleges and universities (HBCUs), now reeling from a funding crisis set in motion by Obama administration “reforms” in student aid, which led to dramatic decreases in student enrollment. HBCU’s and community colleges attempt to serve much the same demographic that is so grievously exploited and damaged by for-profit vultures. Therefore, these two step-children of American education are the logical starting points for building a publicly funded, virtually free higher educational system, sustained by a lion’s share of the $32 billion in federal moneys that annually pass through for-profits on the way to Wall Street. (Total federal spending on HBCUs is currently less than $1.5 billion a year, and California’s community college system, the nation’s largest, is in constant crisis.)

“Nobody can claim that the feds don’t have the money; Washington spends it lavishly on edu-criminal enterprises. Most importantly, history shows conclusively that most of established U.S. public and private higher education is institutionally incapable of serving anything approaching sufficient numbers of darker and poorer Americans – who are then corralled by scurrilous aid-snatchers and dream-breakers.

“The for-profits should be put out of business with all deliberate speed, but it would be a further crime to shift that portion of federal aid to schools that have never demonstrated a willingness or competence to serve the demographic so cruelly exploited by the likes of Corinthian. The federal dollars that made Phoenix and Ashford Universities the top sources of Black baccalaureate degrees (for whatever that’s worth) should not be diverted to institutions that are manifestly hostile to Black people, based on enrollment figures.”

Ford takes no prisoners. Read the article in full.

“The Notebook” reports on the disgraceful funding of schools in Pennsylvania, especially Philadelphia.

Corporate tax breaks mean more to Governor Corbett and the Legislature than children. Public schools don’t make campaign contributions. Charter operators and corporations do.

Says “The Notebook”:

“It’s hard to overstate the deplorable conditions facing Philadelphia school children again this fall: another year of bare-bones education, overcrowded classrooms, and gaps in essential services like counseling and nursing.

“But Philadelphia is by no means the only Pennsylvania district to see budgets slashed and the jobs of teachers, librarians, nurses, and counselors eliminated. Districts across the state are reeling from four years of austerity. Here’s how some were responding this summer:

“Cutting activities: More than one-fourth of districts were expecting to cut extracurricular activities this year, according to a survey by the Pennsylvania Association of School Business Officers.

“Laying off teachers: Allentown’s school district axed more than 60 teaching positions – on top of more than 400 cut in the three prior years.

“Eliminating the arts: A district near Scranton announced it can no longer afford music instruction for students through 2nd grade.

“Something is seriously wrong with this picture. Pennsylvania is not a poor state and is situated in one of the richest countries in the world. But many districts can’t provide our children with school personnel we once took for granted. Not to mention books, technology – and in some cases, soap and toilet paper.

“The Corbett administration would like us to believe that the problem in Philadelphia is that teachers haven’t sacrificed financially. But teachers deserve to be adequately compensated for their vital work and are right to resist a race to the bottom in education spending.”

Corbett is a disgrace.

There’s is a lot of money to be made in education but not by teachers.

 

“In the Publiic Interest” reports on privatization scams. Today it wrote:

 

“Politico reports that the National Urban League “is stepping up its advocacy in support of the Common Core with new radio and TV spots narrated by CEO Marc H. Morial.” In July, Black Agenda Report reported that “the National Urban League got a $1 million check from now-doomed Corinthian Colleges after president Marc Morial wrote a favorable op-ed in the Washington Post. Morial then joined Corinthian’s board of directors, a sinecure that is worth between $60,000 and $90,000 a year in cash and deferred stock.”

In the Public Interest” reports:

1) National: A report released last week by the Institute for College Access & Success says that former students of for-profit colleges account for nearly half (44%) of all federal student loan defaults. “For-profit colleges also continue to have a much higher average default rate than other types of schools: 19.1 percent, compared to 12.9 percent at public colleges and 7.2 percent at nonprofit colleges.” Among other steps, the Institute recommends cracking down on default rates through administrative actions and an upcoming rulemaking.

“National: Gordon Lafer digs into the goals and strategy of the charter school industry. He reports that “a new type of segregation” is at hand. “The charter industry seeks to build a new system of segregated education—one divided by class and geography rather than explicitly by race. (…) The US Chamber of Commerce, the American Legislative Exchange Council (ALEC), Americans for Prosperity and their legislative allies are promoting an ambitious, two-pronged agenda for poor cities: replace public schools with privately run charter schools, and replace teachers with technology.”

Denny Taylor, a professor emerita of literacy studies at Hofstra University, here comments on the recent exchanges among Marc Tucker, Anthony Cody, and Yong Zhao about high-stakes testing and education reform. The key issue, she believes, is not so much about policy as it is about money, power, and control. When big money takes control of public policy, what is at risk is not only children’s lives and their education, but democracy itself.

Taylor has written a scorching analysis of Marc Tucker’s finances and his role in education reform.

She writes:

“I have read with interest the dialogue between Marc Tucker, Diane Ravitch, Anthony Cody, and Yong Zhao on the establishment of an American test-based public education accountability system. Forty years of research on the impact of political structures on social systems,[1], [2] in particular public education,[3] leads me to categorize Marc Tucker’s rhetoric as nothing more than political cant to protect the lucrative profits of poverty “non-profit” industry that is bent to the will of the powerful rich donor groups that are dominating education policy in the US and UK.

“It is the PR discourse of big money that shapes the lives of teachers and children in public schools, and confounds the lives of families with young children struggling with the grimness of developmentally inappropriate instruction in public schools – instruction that rejects all that we have learned as a society about child development, how children learn language, become literate, and engage in math and science projects to both discover and solve problems. Knowledge gained from the sciences and the lived knowledge of human experience, the very essence of our human story, no longer counts.

“Tucker’s view of education is economic. Children in, workers out, could be the mantra of National Center on Education and the Economy. The NCEE website toots the familiar horn of the rich non-profit educational organization stating that: “Since 1988, NCEE has been researching the world’s best performing education systems to unlock their secrets.” Nonsense, of course. What NCEE has actually been doing is making money.

“In 2012 the total assets of NCEE were $93,708,833, with total liabilities of $1,572,013, and net assets of $92,136,820.[4] This highly lucrative “non-profit” fiefdom receives substantial funding from a long list of “donors” including the Bill and Melinda Gates Foundation, and the Broad, Walton, and Walmart Foundations. NCEE has also received substantial funding from the US Federal Government…..

“NCEE was the majority shareholder of America’s Choice, Inc. (ACI), which was established in November 2004 as a taxable for-profit subsidiary of NCEE. NCEE reorganized its internal America’s Choice program as a separate subsidiary to attract the capital investment and management talent to expand the implementation of the America’s Choice comprehensive school design program and related offerings for struggling schools. [6]

“In addition to his lucrative salary [$819,109 in 2012], Tucker was awarded stock options in ACI. In the 2010 Federal tax return for NCEE it further states:

“While any growth in the value of ACI would benefit these optionees, it was anticipated that such growth would also benefit NCEE’s charitable mission.

“NCEE then sold off ACI to Pearson. Here’s what is written on the next page of the 2010 federal tax return:

“The work of NCEE going forward will be funded in large part by the $65.9 million in proceeds that NCEE received as a result of the sale of ACI to Pearson…”

Taylor writes:

“Local control has been eviscerated through the enactment of laws and policies that have ensconced the Common Core in the new business driven public education system, which is centrally controlled through mandatory, highly lucrative, commercial accountability systems, that drain the coffers of local communities and diverts funds from essential programs and services that are no longer available for children in public schools.

“The new report on the American accountability system is just another example of big money writing private policy and sugar coating it to make it palatable. Zhao took the plan apart piece by piece, and Tucker might indeed counter Zhao’s arguments, but there is another problem, a little known fact, that cannot be explained away, not by the educational non-profits serving the needs of the big money backers who make public policy, or by the federal government that benefits.

“The basic research on which the economic system of public education was founded has no scientific legitimacy. This is not unsupported opinion; it is fact.

“At the beginning of the 1990’s, a well-orchestrated effort in state-corporate cooperation was initiated to disenfranchise the growing influence of teachers at the local level across the US, who were creating and using developmentally appropriate teaching-learning materials and activities in public schools that limited the influence of corporate curriculum producers. [19]

“School districts were spending money on real books instead of artificial, commercially produced programs, and there was concern about the growing rejection of commercial text-book producers, including McGraw-Hill, in the five big adoption states – Texas, California, Michigan, Florida, and New York.

“Billions in revenues and profits were at stake. Profits dropped. Not a whole lot, but even a slight dip could be counted in the hundreds of millions. Worse, the growing teacher-led democratic movement was taking hold, causing concern about displacement of the powerful elites in government and big business. From studying the teacher movements of that time, I can write that teachers really believed that through the ways in which they were teaching children in school, society could become more equitable.[20]….”

After a lengthy analysis of the power of big money to capture education policy at the federal and state levels, Taylor writes,

“Again, to ensure that this is not seen as unsupported opinion or that NCEE is an aberrant anomaly, one of the platforms on which big money is falsifying facts is the National Council on Teacher Quality, which has an Advisory Board that includes Pearson International, The Hoover Institution, the American Enterprise Institute, and Murdoch’s News Corporation. The assessment of the syllabi of reading courses in US schools of education by private groups with a commercial agenda is not only political, it is predatory. The assault on faculty and students in colleges of education by NCTQ is also an aggressive act against teachers and children in K-12 public schools that impacts the academic development of the nation’s children, and also their health and well-being.

“When an ideological elite joins with the economic and political forces that control what human beings do, it is important that we confront our illusions and expose the myths about what is happening in K-12 public education. The very existence of NCTQ is a clear indication that we live at a time when the pressures on educators and children in K-12 public schools are reaching a tipping point.

“It is the nightmare scenario that so many of us dread, when the escalation of the causes and conditions that have such a negative effect on the lives of teachers, children and their families become self-perpetuating, and reach a point beyond which there is no return from total disequilibrium. When this happens, at our peril, this nation will no longer have the smallest hope of becoming democratic. Self-aggrandizing private groups with corporate power will overwhelm the system and our struggle for democracy will flounder.

“But there is more than democracy at stake. Once again, to quote Eisenhower:

“Another factor in maintaining balance involves the element of time. As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.
What Tucker or many of his contemporaries don’t seem to get is that there is no time left for big money to mess around. The problem is that the redesign of our public education system based on “meeting today’s economic needs” is getting in the way of the transformation of schools which is urgently required to meet the real needs of our children tomorrow. The assessment system that he is pushing on teachers and children is designed to prepare children to work for the corporations that are using up Earth’s resources, contaminating the planet, causing the climate system to adversely change, and making Earth an unsafe place for our kids to be.”

“….. In public education we need big money to change everything. Tucker must alter course, save face before it is too late, and help get his contemporaries – the men with money, power, and privilege – to acknowledge that under their leadership the public education system has floundered, and that if, we are going to prepare today for tomorrow, we need to support the courageous teachers who were and are making a difference for children and society before big money got in the way. [26], [27]”

This is the most important article you will read this week, this month, maybe this year. Lee Fang, a brilliant investigative reporter at the Nation Institute, documents the rise and growth of the new for-profit education industry. They seek out ways to make money by selling products to the schools, developing new technologies for the Common Core, writing lucrative leasing deals for charter school properties, mining students’ personal data and selling it, and investing in lucrative charter schools.

Their basic strategy: disrupt public education by selling a propaganda narrative of failure, which then generates consumer demand for new, privately managed forms of schooling (charters and vouchers), for new products (a laptop for every child), and for new standards (the Common Core) that require the expenditure of tens of billions of dollars for new technology, consultants, and other new teaching products. The Common Core has the subsidiary effect of reducing test scores dramatically, thus reinforcing the failure narrative and the need for new schools and new products. Meanwhile, absent any evidence, the boosters of the Common Core promise dramatic results (“bigger better cleaner than clean, the best ever, everything you ever dreamed of, success for all, no more achievement gap, everyone a winner”), while reaping the rewards.

The end goal is the reaping of billions in profits for entrepreneurs and investors.

The crucial enabler of the entrepreneurial takeover of American public education has been the Obama administration. From the beginning, its Race to the Top was intended to close schools with low scores, require more charter schools, all to create a larger market for charter organizations. Its requirement to adopt “college-and-career-ready standards” established the Common Core standards in 45 states, thus creating a national market for products. Its funding of two national tests guaranteed that all future testing would be done online, thus generating a multi-billion dollar market for technology companies that produce software and hardware. At the same time, the Obama administration was curiously silent as state after state eliminated collective bargaining and silenced the one force that might impede its plans. Neither President Obama nor Arne Duncan made an appearance in Wisconsin when tens of thousands of working people protested Scott Walker’s anti-union program.

Lee Fang has connected the dots that show the connection between entrepreneurs, the Obama administration, ALEC, and Wall Street. We now know that their promises and their profit-driven schemes do not benefit students or teachers or education. Students will be taught by computers in large classes. Experienced and respected teachers do not like the new paradigm; they will leave and be replaced by young teachers willing to follow a script, work with few or no benefits, then leave for another career choice. Turnover of teachers will become the norm, as it is in charter schools. “Success” will be defined as test scores, which will be generated by computer drills.

This is the future the entrepreneurs are planning. Their own children will be in private schools not subject to the Common Core, or large computer-based classes, or inexperienced teachers. The public’s children will be victims of policies promoted by Arne Duncan to benefit the entrepreneurs.

We see the future unfolding in communities across the nation. It can be stopped by vigilant and informed citizens. If we organize and act, we can push back and defeat this terrible plan to monetize our children and our public schools.

Politico reports this morning that the giant for-profit charter chain Corinthian College is in deep financial trouble and is under criminal investigation as well:

“MORE CORINTHIAN INQUIRIES: Corinthian Colleges is facing two more criminal investigations, the dismantling for-profit giant reported in an SEC filing late Friday [http://bit.ly/1mwDAFi]. The company disclosed a federal grand jury subpoena in Florida related to employee misconduct and the return of student aid funds, plus one in Georgia requesting information on job placement, admissions, attendance and graduation rates. The subpoenas follow last week’s news that the Consumer Financial Protection Bureau is suing the company for nearly $569 million over an “illegal predatory lending scheme: http://1.usa.gov/1oW68U3″

For a real eye-opener, read the charges made against this for-profit corporation by the Consumer Financial Protection Bureau. This “illegal predatory lending scheme” is stunning in its scope. The administration and Congress should regulate these predatory institutions or put them out of business. Unfortunately, Congress has held off because the industry hired the top lobbyists from both parties to fight needed regulation. If it were up to me, I would ban for-profit education, including for-profit charter schools and colleges. Many, most, are worthless diploma mills whose purpose is profit, not education. Why urge young people to get a diploma when the choices include places like this one?

Bill Phillis founded the Ohio Equity and Adequacy Coalition, which advocates for public schools and exposes for-profit scams.

He writes here:

Imagine Schools, Inc.: For-profit, out- of- state business operation took $44.9 million of Ohio school districts’ funds last school year

Imagine Schools, Inc., based in Arlington, VA, has 18 Ohio business centers, authorized by eight different charter school sponsors. During the 2013-2014 school year, this for-profit company enrolled 6,235 students at a cost of $45 million to Ohio school districts.

Each of these 18 charter schools has a sponsor and a board of directors. The Ohio Department of Education and Ohio charter school sponsors typically provide limited monitoring and oversight. The boards of the Imagine Schools, Inc. appear to be mere rubber stamps of company decisions. (A company internal memo surfaced in which charter school principals were admonished to keep boards in line with company decisions because the schools belonged to the company.)

Since the financial operation of this school district-funded enterprise is hidden from public view, the amount of tax money that is converted to profits is a secret.

My resident school district had a deduction of $3,702,897.67 for Imagine Schools, Inc. last school year. As a taxpayer and supporter of my school district, board of education, administration and district employees, I object to a portion of the school district tax money being taken from my school district and handed to entities that have little or no transparency or accountability. I, along with other school district residents, have no access to the unaccountable financial operation of Imagine Schools, Inc. School districts’ finances, on the other hand, are available to citizens.

The Ohio Department of Education deducted $15,570,134.09 from my resident school district for students going to charter schools. These funds went to 66 charter schools, most of which had a lower state report card rating than the district.

State officials should eliminate the for-profit companies from the Ohio charter school industry.

William Phillis
Ohio E & A
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