Archives for category: For-Profit
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Good News! Governor Brown Signs Bill Banning For-Profit Charters! (With a Caveat)

By dianeravitch
September 7, 2018 //
17

Julian Vasquez Heilig reports that Governor Jerry Brown signed legislation to ban for-profit charters. This is very good news. In 2015,he vetoed such a bill.

Now, here’s hoping that the Legislature can pass (and the governor will sign) a bill requiring accountability and transparency in all charters, including a ban on nepotism and conflicts of interest.

The momentum for this legislation was reignited by great reporting on K12 Inc. by reporter Jesse Calefati of the San Jose Mercury News in 2016. Give credit where it is due. Be thankful for freedom of the press!

PS:

An ally in California says this is not as big a deal as it seems. She writes:

“I just can’t understand all of the excitement about this given that there really aren’t any for profit charters left in CA anyway. This bill was approved by the Callifornia Charter Schools Association who were already celebrating and promoting that there are no for profit charters in CA. For profit charters have never really been an issue in CA, we have barely had any in the past. Of course, the vast majority of online charters contract to k12 and we all know they are a huge profit machine.”

http://www.ccsa.org/blog/2018/08/california-charter-schools-association-celebrates-landmark-legislation-banning-for-profit-charter-sc.html

Categories Accountability, California, Charter Schools, Education Industry, For-Profit, Fraud, Freedom of the Press, K12 Inc., Privatization

Ohio & Florida: Charter Scam Rips Off Taxpayers in Both States

By dianeravitch
September 3, 2018 //
14

The Network for Public Education has a Twitter handle called #anotherdayanothercharterscandal, and it is hard to keep up with them. It used to be one or two a week, Carol Burris told me, now it is one or two every day.

Here is only one among many, involving a charter scam that stretched from Ohio to Florida, ripping off taxpayers in both states.

Ohio’s top public accountant is actively investigating the case of two businessmen accused of using charter schools to defraud Florida taxpayers, students and schools — and maybe here, too.

On Friday, Ohio Auditor Dave Yost acknowledged that a probe has been ongoing for a year. Meanwhile, court documents filed this month in Florida indicate 19 Ohio charter schools were overbilled nearly $600,000. Prosecutors and forensic accountants say the money was laundered through 150 bank accounts and shell companies then returned as “rebates” and “kickbacks” to Marcus May, who once ran more than 20 charter schools in Ohio.

In 2012, May used a parent company, Newpoint Education Partners LLC., to open Cambridge Education Group, a charter school operator based in Akron. To grow business in Florida, authorities say he “falsely represented” that his Ohio schools were well managed. By 2016, prosecutors say he allegedly defrauded Florida and its public schools of more than $1 million.

May has repeatedly declined to speak with the Beacon Journal.

The pattern in Florida seems to mirror transactions in Ohio.

One forensic document in the Florida case details how Ohio schools paid $1.1 million to Apex Learning, a Seattle-based company May used to bill the 19 Cambridge schools in Ohio and 15 Newpoint schools in Florida for online and hard-copy curriculum. Russ Edgar, the lead Florida prosecutor in the white collar criminal case against May, has produced invoices that show how Apex inflated pricing to siphon $229,756.57 from Florida’s education system and $456,551.92 from Ohio schools, including four in Akron.

“After the allegations in Florida came to light, Marcus May was immediately relieved of any managerial duties and later of his equity in Cambridge,” John Stack, co-owner of Cambridge, said in a written statement. He said Cambridge hired a forensic accountant to find out if Apex negatively impacted any Ohio schools. Once the schools were identified, the money was returned.

Stack said he no longer owns a stake in Cambridge. He did not say who does owns the company now.

Of the 18 Cambridge schools still open in Ohio, 13 signed new management contracts this summer with Oakmont Education. Stack founded the company with Marty Erbaugh, an investment banker from Hudson. Oakmont will take over Cambridge’s dropout recovery high schools for struggling teenagers and young adults.

“Oakmont doesn’t believe that any of the schools we manage were negatively affected by Marcus May’s actions or Cambridge’s management,” said Stack, who filed the paperwork to create Oakmont on March 20, four days after a Florida jury convicted one of May’s associates.

How reassuring to know that the charter schools are now in the hands of an investment banker. Don’t you feel better already?

Categories Accountability, Corruption, Florida, For-Profit, Fraud, Ohio, Scandals

Philadelphia: The New Teacher Project, TFA, Bain Capital, and the Leeching of $$$ From Urban Schools

By dianeravitch
August 31, 2018 //
8

Greg Windle, a journalist at The Notebook, has drawn together the many strands of the tangled web of Reformer groups in Philadelphia, as seen through the lens of a contract awarded to The New Teacher Project for principal training. TNTP, Michelle Rhee’s creation, was designed to hire new teachers. When did it develop an expertise in training principals? Were there no veteran educators, no one in the Philadelphia School System, capable of training new principals? Or were they recruiting principals who had been a teacher for a year or two?

As Windle gets deeper into the story of a contract dispute about hiring TNTP to train principals, a familiar cast of money-hungry Reform groups washes up on the beach.

“Marjorie Neff, a former School Reform Commission chair who voted against the TNTP contract to recruit and screen teachers, said that in her experience such national education vendors use an approach that is “formulaic” and doesn’t tailor well to the needs of an individual teacher or the “context” of teaching in Philadelphia, where a teacher’s needs are different than in the suburbs. Neff is a former principal at Samuel Powel Elementary and J.R. Masterman who earned a master’s degree in education from Temple University.

“They’re selling a product. From that perspective, their formula is their vested interest,” Neff said. “Their bottom line is profitability, and we need to take that into account. Is it the most effective way to do this, or is it the most profitable? I don’t think those necessarily have to be in conflict, but sometimes they are.”

“In 2017, TNTP reported that its expenses were $20 million higher than revenue. In 2016, its revenue was nearly $21 million higher than expenses, but this was entirely due to the $41 million it brought in from “all other contributions, gifts, grants” (excluding government grants). That pot includes grants from outside philanthropies, such as foundations, but also investments from venture capital firms. In 2015, the nonprofit lost $6.1 million, despite millions in outside funding.

“Shifting funding, but consistent ideology

“Bain Capital’s consulting firm has two members on the board of TNTP. Since 2009, Bain’s consulting arm has partnered with Teach for America to develop “high-impact leaders in education” by placing TFA alumni in “leadership” positions in public education. Together, TFA and Bain designed “a series of programs to inspire, prepare, match and support Teach for America alums on the path to leadership.” Bain aimed to bring leadership development practices from the private sector into public education.

“In 2012, the two organizations got together to “expand the scope of work” of their partnership — the same year that Teach for America founded School Systems Leaders to train TFA alumni to “serve at the highest levels of leadership in public school systems.”

“Matt Glickman, an employee of the Bain consulting firm and board member of TNTP, has also served on the board of the NewSchools Venture Fund. That fund has invested in free-market education reforms since 1998. The Sackler family – whose fortune is based on profits from Purdue Pharma, developer of OxyContin – decided to invest heavily in the fund.”

When will education be returned to educators?

Anyone advocating for edupreneurs should be fired. As Neff said quite well, these national vendors are in it for the money.

Categories Accountability, Corporate Reformers, Education Industry, For-Profit, Fraud, Hypocrisy, Philadelphia, Principals, Teach for America

New Jersey: How Chris Christie Allowed Charter Entrepreneurs to Rip Off Taxpayers

By dianeravitch
August 31, 2018 //
8

Bob Braun, the veteran investigative reporter who has covered New Jersey politics for many years, describes an astonishing ripoff of taxpayers.

Categories Accountability, Charter Schools, Corporate Reformers, Education Industry, Failure, For-Profit, Fraud, New Jersey, Newark, Privatization

California Legislature Passes Ban on For-Profit Charters: Will Governor Brown Sign It?

By dianeravitch
August 26, 2018 //
14

The California Legislature passed a bill banning for-profit charters. The sponsor is Assemblymember Kevin McCarty of Sacramento. The bill is aimed primarily at the virtual charter school run by for-profit K12 Inc.

Last time such a bill was passed, Governor Brown vetoed it. Having opened two charters when he was mayor of Oakland, he is very protective of them. This is a stain on his otherwise progressive record.

Even the California Charter Schools Association has endorsed this bill.

The San Jose Mercury News ran a powerful expose of K12 Inc. in 2016.

“SACRAMENTO — For-profit companies will be banned from running charter schools in California if Gov. Jerry Brown signs a hard-fought bill that won final approval from the state Legislature on Thursday.

“The proposal is the latest of several attempts to crack down on what critics say amounts to profiteering at the expense of children and taxpayers, the subject of a 2016 investigation by this news organization. Its passage came only after proponents were able to forge agreement between two groups that are almost always at odds: teachers unions and the trade association representing charter schools.

“The exposé in the Mercury News highlighted the need for reform,” said the bill’s author, Assemblyman Kevin McCarty, a Sacramento Democrat who serves on the education committee.

“That investigation zeroed in on K12 Inc., a for-profit operation based in Virginia and traded on Wall Street that manages publicly funded charter schools in California and other states. The K12-run network California Virtual Academies, the largest of its kind in the state with an enrollment of roughly 15,000, graduated fewer than half of its high school students, the news organization reported, and some teachers said they were pressured to inflate grades and enrollment records.

”This news organization’s probe also found that children who logged onto the company’s software for as little as one minute per day were counted as “present” for the purposes of calculating the amount of taxpayer funding the company would receive from California.

“As with policies from immigration enforcement to fuel standards, the Legislature’s approval of a for-profit charter school ban is at odds with the policies of the Trump administration. U.S. Education Secretary Betsy DeVos is not only a vocal supporter of for-profit education, but her husband disclosed they were early investors in K12 Inc.

“Assembly Bill 406 would change California’s charter school law to prohibit for-profit corporations and for-profit educational management organizations from running the state’s taxpayer-funded and independently run schools — even if the schools themselves are technically nonprofits.

LCalifornia currently has about 35 such charter schools, according to McCarty’s office. In 2016 K12 settled a lawsuit with the state for $168.5 million over claims that it manipulated attendance records and other measures of student success.”

Governor Brown has until September 30 to sign or veto the bill.

Jesse Calefati’s reporting for the San Jose Mercury News is education journalism at its finest, independent and owing nothing to philanthropists or investors.

Categories California, Education Reform, For-Profit, K12 Inc., Virtual Charter Schools

Bill Phillis: Those Poor, Poor, and Very Few Bad For-Profit Charters in Ohio

By dianeravitch
August 23, 2018 //
5

Bill Phillis, retired for many years as deputy state superintendent of education in Ohio and now the state’s most outspoken critic of charter fraud, writes on his blog about the Thomas B. Fordham Institute’s lame defense of for-profit charters:

“The myth of Ohio’s ‘for-profit’ charter school system”: A Fordham Institute’s damage control effort

An August 20 Fordham article suggests the charter industry is getting a bad rap because of the cronyism of a few charter operators. The article also attempts to justify the use of for-profit management companies by charter schools.

The notion proffered is that ECOT and the White Hat Management Company are the only bad actors in the charter industry. What about the 250 or so charter schools that took state and federal money and closed or never opened leaving kids in an education lurch? What about the other charter operations that have been reported as fostering gross irregularities, such as the Gulen charters, but not appropriately investigated by state officials? What about the Imagine Schools Inc. charter school chain that requires the charter schools to pay absurdly high rent to a real estate company allied with Imagine?

Corruption in the charter industry in Ohio and elsewhere is not confined to just a few bad actors. The industry is rife with low performance, cronyism and corruption.

In the article, the author equates a charter board hiring a management company to operate its school to a school district purchasing buses, books, etc. from the private sector. An absurd stretch!

A management company that operates charter schools performs a governmental fiduciary function and thus should be subjected to the same accountability and transparency measures as school district officials. Bus and book companies don’t operate the schools to which they sell products.

The Ohio charter industry seems beyond repair but Fordham keeps defending it.

Be it noted that the NAACP report on charter schools not only called for a moratorium on them, but called for the elimination of all for-profit charters and the for-profit management organizations that manage charters.

Categories Accountability, Charter Schools, Education Industry, For-Profit, Fraud, Ohio, Privatization

Arizona: CEO of Failing Online Charter School Gets a Bonus of $8.8 Million

By dianeravitch
August 23, 2018 //
19

Arizona is an amazing state. Taxpayers don’t care how their money is spent. You could collect it and burn it and they wouldn’t care.

That’s the impression you would get if you read this story about Primavera Charter School.

The online high school is a failure but the CEO is getting a bonus of $8.8 million.

“By most academic measures, Primavera online charter school is a failure.”

“Its student-to-teacher ratio is 215-to-1 — 12 times the state average — allowing little or no individualized attention.

“On recently released state standardized tests, less than a quarter of its students passed math and about a third passed English, both below the state average.

“And 49 percent of Primavera students end up dropping out, 10 times the state average.

“But by another measure, Primavera is an unmitigated success: making money.

“Beginning in 2012, the school began shifting large shares of its annual $30-plus million allotment of state funding away from instruction and into stocks, bonds, mortgage-backed securities and real estate.

“That year, 70 percent, or $22.4 million, of its state funding went into its growing investment portfolio — instead of efforts to raise test scores, reduce class sizes, or address an exploding dropout rate that is now the state’s third-highest.”

That’s in line with the usual formula for online charter schools. They fail but they are profitable. State legislatures authorize them despite their consistent record of failure. Usually they do so because a key politician or two received a campaign contribution of a few thousand dollars. Think ECOT in Ohio, which paid off important pols to the tune of a million a year, assuring a return of hundreds of millions every year.

Do taxpayers care? It’s their money.

Categories Accountability, Arizona, Failure, For-Profit, Privatization, Virtual Charter Schools

Gail Collins on The Bane that Is Betsy DeVos

By dianeravitch
August 18, 2018 //
13

A very welcome column about our odious Secretary of Education by the brilliant Gail Collins.

The Bane That Is Betsy DeVos https://nyti.ms/2MvmgC5?smid=nytcore-ios-share

Today let’s talk about the evil deeds of Betsy DeVos.

We’ve been distracted, what with Omarosa and the Manafort trial and that $90 million military parade we were so looking forward to. At the same time, our secretary of education has been busy, working to protect for-profit colleges from their students.

Yes! We keep being told that Donald Trump was elected because working-class Americans were worried that their kids wouldn’t be able to move up in the world. And now DeVos is making it easier for those very same kids to be cheated when they try to prepare for a career.

It’s quite a story, just as DeVos is quite a gal. Probably the first secretary of education with a $40 million family yacht that’s registered in the Cayman Islands, presumably to avoid American taxes.

Is that the yacht that got mysteriously untied the other day?

Yes, it was moored in Ohio and an unknown person set it adrift, causing up to $10,000 in damage. We do not approve of this sort of behavior, people! Somebody could have gotten hurt. And the DeVos family might have been without a floating residence, except for the other nine yachts they own.

But before I permit any more distractions, we need to discuss policymaking at the Department of Education:

The Obama administration worked very hard to weed out bad for-profit colleges. The policy it finally came up with was to compare an average graduate’s debt with the average graduate’s earnings. Then cut off federal grants and loans to the schools that had a really terrible ratio. And give the students who’d gotten a raw deal a chance to get their loans forgiven.

Excuse me, but does this apply to, say, philosophy majors? My grandson is finishing up at the state university and I do not see how all these courses on Heidegger are going to get him work.

No, we’re talking about schools that are just there to prepare students for a career, whether it’s computer engineering or cooking or auto mechanics. Your grandson is in a privileged minority. If you want an American college student to worry about, Suzanne Martindale of Consumers Union says you should think less about a kid on a four-year campus and more about “someone 29 with three kids.”

Or Stephanie Stiefel, who enrolled at the now-defunct for-profit International Academy of Design and Technology in Tampa to get a B.A. that she was assured would lead to a good-paying position in interior design: “They made it seem so simple — just do well in class and finish the program.” She graduated with a 3.8 and $62,000 in debt, then discovered that the only jobs she could land were minimum-wage positions she could have gotten without any training at all. Other schools wouldn’t accept her credits when she tried to get an advanced degree. Now, 10 years later, she’s finished a tour of duty in the Army and owes $110,000. “At this point I just make the payment and cry about it,” she said.

DeVos, meanwhile, is worried about the government making “burdensome” demands on the for-profit schools. We will take a break for a minute to sigh.

Oh gosh, this is so depressing. I hate thinking about the things this administration is doing to ordinary people. Is there any chance you could distract me by working in Omarosa?

Well, be a good citizen and stay with me for a minute.

DeVos loves for-profit education — you may remember she championed an overhaul of the Michigan school system, which replaced troubled public schools with truly terrible charter schools, most of them for-profit.

So she’s chipping away at anything the for-profits don’t like. Like the Obama rule allowing aggrieved students to petition to get their loans forgiven. The new idea would pretty much limit relief to people who’ve fallen into deep financial distress. Nobody seems to have seen that one coming.

And lord knows what’s next. Amy Laitinen, at the nonpartisan think tank New America, is worrying that the department will “allow a college to outsource its program to an unaccredited provider.” Which in theory could mean that when you pay your tuition to what seems to be a legitimate school, you could find yourself bused over to Trump University for classes.

I’m so glad you got Trump University in there.

DeVos has stuffed her department with people from the for-profit education industry. The guy who’s supposed to be overseeing fraud investigations is a former dean of a for-profit named DeVry University, which paid $100 million to settle a lawsuit over misleading marketing tactics.

But you still promised me Omarosa. Find a way to work her in.

The famous memoir claims Trump calls his secretary of education “Ditzy DeVos” and vowed to get rid of her. The first certainly sounds likely. But by now we are well aware that the current president of the United States is incapable — oh, irony of ironies — of firing anybody. And I don’t want to give you the impression that Trump has any reservations about for-profit colleges that make grandiose promises to their students about future careers, while taking their money and preparing them for nothing whatsoever.

Categories Accountability, Betsy DeVos, Education Reform, For-Profit, Fraud, Higher Education

California: Torlakson Creates a Task Force to Review State Charter Laws

By dianeravitch
August 18, 2018 //
12

Tom Torlakson, the outgoing state superintendent of public instruction in California, has created a task force to review the charter school laws in the state.

California has more charter schools than any other state. The California Charter School Association is the richest, most powerful lobby in the state and has been able to stymie any overhaul of the law. The CCSA has staunchly opposed any revision of the law that might require accountability or transparency from charter schools and that would, for example, bar conflicts of interest or for-profit charters.

Governor Jerry Brown, who has been a progressive leader on so many major issues, has been a faithful defender of charter schools, vetoing any legislative efforts to update the law.

But, it now appears that the new governor will be Gavin Newsom, and he has no debts to the CCSSA, which directed millions of dollars to Antonio Villairaigosa in the primaries, who ran a distant third.

Given the reshuffling at the top, it is time to fix the conditions that allow frauds and scandals to go undetected in the charter sector.

Responsible members of the charter industry should work diligently to remove the fraudsters and grifters from their sector, as should everyone.

Charters should not have the ability to appeal from the district board to the county board to the state board, where they are certain to win approval, no matter how ill-qualified their staff.

At present, given the lack of any accountability for the expenditure of public money by charters, the state has experienced many scandals. To learn more about the woeful state of California’s charter industry, read Carol Burris’s carefully researched “Charters and Consequences.”

The Torlakson commission has the chance to get the law right, which would benefit both public schools and charter schools.

Categories Accountability, California, Charter Schools, Education Industry, For-Profit, Fraud, Privatization, Scandal

Omarosa: DeVos Wants to Privatize All Public Schools

By dianeravitch
August 18, 2018 //
51

Valerie Strauss writes about Omarosa’s new book “Unhinged” and what she says about Betsy DeVos.

https://www.washingtonpost.com/news/answer-sheet/wp/2018/08/14/omarosa-claims-betsy-devos-wants-to-replace-public-education-with-for-profit-schools-and-that-trump-calls-her-ditzy-devos/

“A new book about President Trump by one of his former senior advisers, Omarosa Manigault Newman, claims that Education Secretary Betsy DeVos wants “to replace public education with for-profit schools” and that Trump has called her by the nickname “Ditzy DeVos….”

“Manigault Newman writes:

“Her plan, in a nutshell, is to replace public education with for-profit schools. She believes it would be better for students, but the truth is, it’s about profit. She’s so fixated on her agenda, she can’t give any consideration to building our public schools, providing financing for them, particularly their infrastructure needs.

“Manigault Newman writes that she accompanied DeVos on a trip to Florida in 2017 and that DeVos was booed while giving a graduation speech at Bethune-Cookman University, a historically black college in Florida. Graduating students heckled DeVos in large part because a few months earlier, she had called historically black colleges and universities — which were created because blacks couldn’t attend white schools — “pioneers” of school choice.

“Manigault Newman writes that after the speech, she asked the secretary how she thought she did. DeVos responded, according to the book, by saying she thought she did “great,” and then is quoted as having said the students at the Bethune-Cookman graduation “don’t have the capacity to understand what we’re trying to accomplish.” Manigault Newman then wrote this: “Meaning, all those black students were too stupid to understand her agenda.”

Categories Accountability, Betsy DeVos, Charter Schools, Education Industry, Education Reform, For-Profit, Privatization
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