On Monday, a Superior Court judge in Wake County, North Carolina, will decide whether to permit the for-profit corporation K12 to open an online charter school for the state of North Carolina. K12 received preliminary approval from the Cabarrus school district, after K12 promised the district 4 percent of its revenues. That’s a nice commission for this little district but a disservice to the other children of North Carolina.
The majority of school boards in the state oppose the online school, because its revenues will come directly out of their public school budgets. By opening this school, students across the state will have more crowded classrooms and fewer resources.
Numerous studies have shown that online schools get worse results than brick-and-mortar schools. Their students get low test scores, and their graduation rates are abysmal.
K12’s Ohio Virtual Academy has a four-year graduation rate of 30 percent. For black students, it is only 12 percent. In Colorado, the Virtual Academy has a graduation rate of 12 percent, and only 9 percent for black students.
By contrast, the graduation rate in North Carolina is 78 percent overall, with 71.5 percent for black students and 69 percent for Hispanic students.
A study of cyber charters in Pennsylvania showed that the virtual charters get worse academic results than either public schools or brick-and-mortar charter schools.
Recently the New York Times published an expose, revealing that K12 aggressively recruits students, many of whom drop out in the first year; K12 keeps the tuition money, however. Churn is the key to its success, so it pays handsomely to bring in new students as the current crop leaves. The Washington Post showed how K12 picks the poorest district in a state, so it can claim the maximum tuition reimbursement for its corporate coffers.
The corporation was founded by former Secretary of Education Bill Bennett, junk bond king and ex-felon Michael Milken, and Wall Street financier Ron Packard. Packard, formerly of Goldman Sachs and McKinsey, is now CEO; he received compensation last year of $5 million, all of it from taxpayer revenues for public education.
Why would North Carolina want to waste taxpayer dollars on a for-profit corporation that gets worse results than North Carolina’s own public schools?
Why take money away from the successful public schools of North Carolina to enrich a for-profit corporation that offers a low-quality education?
Diane
Diane Ravitch's blog 
Why? Simple. Money. If you have enough time and resources, bet you find large political donations made to these politicians.
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There happens to be a Boston Globe story this morning about Mike Milken’s history with Mitt Romney, connecting Bain Capital with Drexel Burnham:
“Mitt and the junk bond king”
http://www.boston.com/news/politics/articles/2012/06/24/the_story_behind_mitt_romneys_work_with_michael_milken_it_was_fun_while_it_lasted/?page=1
I posted a comment, linking to this column, and here it is.
I wonder if Massachusetts taxpayers would be interested in the current creative financing maneuvers of Romney’s partner, Mike Milken.
He’s still using his insider dealings and political clout to leverage take-overs, this time of our state’s public education budget. His national chain of junk-bond virtual schools is called K12inc, and we’re paying for it.
North Carolina has moved in court to stop his massive “online charter” fraud, but Massachusetts still gives him a free pass. Here is a quick update, if you haven’t followed Milken:
“Will This North Carolina Judge Protect the State’s Children?”
Milken launched his secret for-profit enterprise here in Greenfield, under cover of the Patrick administration. Our DOE lets him operate his massively profitable rip-off behind a dummy non-profit board. Examine their website, and find this little red button:
“Enroll at Greenfield or at K12 ”
http://gpsk12.org/virtualschool/virtualschool_home.html
Vulture capitalism isn’t limited to private equity. The same high-rolling players are moving against our public schools.
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Just an FYI – K12 is being looked at for possible securities fraud.
http://www.educationnews.org/online-schools/k12-inc-under-investigation-for-possible-securities-fraud/
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Gov. Bobby Jindal, having been a former employer of McKinsey, will no doubt provide the door to vouchers being made more accessible to K12 advancing their presence in Louisiana. After all, why not benefit.
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And K-12 is involved in four more schools about to open in NJ this Fall. There are no provisions in NJ’s charter school law to regulate virtual charters, but this has not stopped the NJDOE under Acting Commissioner Chris Cerf from opening them. Assemblyman Patrick Diegnan has introduced a moratorium bill, and we are also fighting to oppose changes to the charter regulations that would allow virtuals to draw students state wide. It’s always an uphill battle in New Jersey, but one we are ready, willing and able to fight!
http://mothercrusader.blogspot.com/2012/06/virtual-charters-earn-real-money.html
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I don’t understand why states would give Milken even 1 penny of public funds. For several years, I’ve worked at a non-profit university that was owned by Milken and one of the Deans told me the school could not get Title IV, federal financial aid, because Milken is a convicted felon. Our pay was reduced repeatedly due to this. The school was essentially managed by a for-profit subsidiary of Milken’s parent corporation, which our regional accrediting body thought we had too cozy a relationship with and, eventually, regional accreditation was withdrawn. We lost most of our students because of that, so our pay was reduced once again. (I’m in extremely serious financial trouble due to this mess, and the school, which is no longer affiliated with Milken, is trying hard to stay afloat.)
Milken owns many different companies, virtually all related to education, and his corporate structure consists of one company feeding into or enveloped within another, sort of like many Russian nesting dolls. In an attempt to keep accreditation, my school eventually contracted with another management company, but I discovered through some online searches that that company, too, was a Milken subsidiary. I read that one of our previous presidents claimed we had an independent Board of Trustees, but online searches also revealed that several trustees were from various Milken companies. All were ultimately replaced, but not soon enough to keep our accreditation –even though that process dragged on for years. Milken was supposedly just an investor in the parent corporation, but It made me wonder who was behind keeping the school’s oversight intact.
In fact, from what I’ve read, Milken claims to only have investments in most, if not all, of his companies. Maybe that’s how he manages to circumvent legal issues, but considering his history of deception for financial gain, it’s rather difficult to believe.
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