Archives for category: K12 Inc.

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.

Ron Packard, previously at Goldman Sachs and McKinsey, knows a good thing when he sees it. He was formerly CEO of online charter chain K12 Inc., where he was paid $5 million a year to run the business. Now he calls himself an “educator” and plans to open a new e-school in Ohio. After the collapse of ECOT, which siphoned $1 Billion from taxpayers, you would think Ohioans would say no.

Apparently the lesson educator Packard draws is that the market needs another e-school to replace ECOT.

This one, he says, will be better than ever. Bigger, better, better. And some people will believe him.

Every dollar he gets will be withdrawn from a public school.

When will the legislature ban these faux schools?

Better yet. Limit the owner’s salary to be no greater than that of a superintendent. He will leave.


The nation’s largest virtual charter chain, K12 Inc., has consistently gotten low marks for its academic results. Founded by junk bond king Michael Milken, it is listed on the New York Stock Exchange. It is a for-profit business, but according to this financial report, its future profitability is in doubt.


“Two days ago, we revealed multiple K12 school closures and a first ever union contract that we estimate will lead K12 to lose money in fiscal 2019 and beyond.

“Yesterday, we learned of another school closing; we estimate this non-managed school will reduce revenue by another $7 Million and operating income $5 Million.

“We were told the school was closing due to its inability to meet academic standards, marking yet another failed chapter in the virtual charter school story.

“More Bad News For K12’s Fiscal 2019

“On Monday, we released a report that disclosed five K12 (NYSE:LRN) schools that are closing or at risk of closing after this school year and a first ever union contract for the California Virtual Academies. We estimate that the lost revenue and increased expenses will cause pre-tax earnings to decline $20 Million and lead K12 to lose money in fiscal 2019 and beyond.

“Yesterday, we were told of yet another school closing. A parent of the Texas Virtual Academy (TVA) 3-8 Campus told us that, according to a letter from the school, it will be closing after the school year due to an inability to meet academic standards.

“We called K12, who partners with the school’s operator, and the enrollment specialist confirmed that the school is closing.”

In 2014, the NCAA announced that it would no longer accept credits accrued by student athletes at 24 K12 Inc. virtual charters.

Betsy DeVos loves virtual charters, but they have dreadful records. Even her like-minded Choice zealots Are backing away from this money-making machines.

In South Carolina, the state agency in charge of charter schools refused to allow some Virtual charters to change authorizers, which would enable them to restart the time clock on failure.

“Following months of political tensions and a contentious public hearing, the South Carolina agency that oversees 39 of the state’s charter schools has signed off on the requests of five charters seeking permission to transfer to a new sponsor. Another four, though, including three online schools, are in “breach” status because of persistently poor performance and will not be allowed to leave.

“We don’t feel that’s taking care of our fiduciary duties,” Don McLaurin, chair of the statewide South Carolina Public Charter School Board, said of the underperforming schools’ request to leave. “That’s just not how you improve education.”

“The three virtual schools — the Cyber Academy of South Carolina, the S.C. Virtual Charter School, and Odyssey Online Learning — all contract with the for-profit, publicly traded K12 Inc. for services ranging from day-to-day operations and instruction to curriculum. The fourth, Midlands STEM Institute, is a technology-focused “bricks-and-mortar” public charter school located near the city of Columbia.

“Separately, the state’s Office of the Inspector General is examining data the schools submit to the board that raise questions about enrollment and attendance at the four schools whose transfer requests were denied. Early in the hearing at which the transfer requests were heard, board members were told the auditors have found nothing so far that should factor into their decision.

“Other states and charter school authorizers that have attempted to shutter poorly performing online schools with for-profit operators have found themselves waging wars of attrition, with the companies spending lavishly on lobbying and donating to sympathetic elected officials.

“South Carolina, where 10,000 of the state’s 26,000 charter school students attend virtual schools, is shaping up to be no exception. According to public disclosures analyzed by The 74 in a previous story, the for-profit schools and their representatives have spent nearly $1 million in the state since 2010. In 2015 the Center for Research on Education Outcomes at Stanford University, better known as CREDO, found that online schools have an “overwhelming negative impact” on student growth.”

K12 Inc. is great for profits, not very goood for students or taxpayers.

This announcement just arrived:

Contact: Brianna Carroll 650-219-6360 or Sheryl Carruth 562-818-1243

California Virtual Academies Teachers Authorize Strike
Educators at State’s Largest Online Charter Schools Network Hope to Move Stalled Contract Talks

Simi Valley[–- By over a 90% margin, educators at California Virtual Academies (CAVA) have voted overwhelmingly to authorize a strike after over a year trying to negotiate their first contract with CAVA administration. [California Virtual Educators United (CVEU) has been working to address teacher and student turnover by raising CAVA’s shockingly low, uncompetitive salaries and to ensure a manageable student to teacher ratio that supports quality instruction and learning. CAVA, which contracts with national online, for-profit charter giant K12, Inc., hires instructors at low pay to teach as many students as possible with low overhead, then funnels California tax-payer funding back to executives in Virginia and their investors to pay for management fees, technology, and other services. CVEU represents 450 CAVA teachers.

Ongoing sessions with a state mediator have so far failed to produce a settlement. While continuing to work and hope for a fair resolution, CAVA members see this week’s vote as a strong show of determination and unity. Additional mediation dates are scheduled for November 28 and 29th.

“Our members are deeply dedicated to the over 10,000 students we serve,” said CVEU president Brianna Carroll. “We believe in what we are doing and are working to negotiate changes that will benefit our students and stop the high turnover that is turning CAVA into a revolving door for teachers and enriching an out-of-state, for-profit company at the expense of better quality teaching and learning, and adequate resources for the kids best served by an online model.”

K12, Inc. and CAVA, who bitterly fought the unionization of CAVA teachers and their representation by the California Teachers Association, have been plagued by other issues reflecting poor management. Last year CAVA agreed to a $168.5 million settlement with the California Attorney General over concerns related to business practices, student performance, and use of public funds. Last month CAVA was required to pay back nearly $2 million to the State of California based on ongoing problems with the reporting of attendance, teacher to pupil ratios and student progress. CVEU believes its unionization and a strong contact settlement will help make kids, not profits, more of a priority for CAVA management.

Guess the teachers don’t realize that the K12 Inc. model relies on low-wage, non-union teachers with large classes.

The rightwing-funded Black Alliance for Educational Options is closing its doors. It was launched by Howard Fuller, who was superintendent of Milwaukee public schools in 2000. Fuller was radicalized by his inability to change the system and formed an alliance with the far-right Bradley Foundation, which funded vouchers and wanted to privatize public education. Over the years, BAEO has been funded by white conservative foundations including the Walton Foundation.

BAEO Sought to persuade African Americans that school choice, charters, and vouchers, and privatization were in their interest.

Southern legislatures, controlled by conservative white men, liked BAEO’s ideas.

Education Week credits BAEO with getting Alabama and Mississippi to pass charter laws, and Louisiana and D.C. to pass voucher legislation.

White segregationists embrace school choice readily, as they have wanted it since 1954. Fuller pushed on an open door. Now southern states can fund segregated schools and do it with a clear conscience. Sort of.

Fuller no doubt was following his conscience, but it would be better if he had done it without all that rightwing money.

In the era of Trump and DeVos, it is difficult to play the role of a progressive when their agenda and yours are the same. Especially when the NAACP is speaking out against charters and privatization.

In a related story, the former chairman of the BAEO board Kevin Chavous has been named president of K12 Inc.s Academics, Policy, and Schools. K12 Inc. was founded by junk bond king Michael Milken and his brother Lowell and is the nation’s largest virtual online charter corporation. It is listed on the New York Stock Exchange. Its schools have been notable for high attrition rates, low test scores, and low graduation rates. The NCAA withdrew accreditation from two dozen K12 schools a few years ago because of their poor quality. This is a choice strongly supported by DeVos. K12 Inc. is also known for paying lavish compensation, desite its poor academic results.

Earlier today, I posted the question: Whatever happened to the audit of the California Virtual Academies, which was supposed to be released in March 2017?

The California Department of Education contacted me to say that the audit was released two days ago, and CDE ordered the Virtual Academies to repay nearly $2 Million in misspent funds.

Let me be clear: I don’t think that for-profit Virtual Charters should be allowed to exist. If districts want to offer online instruction, not for profit, that is their prerogative.

But the for-profits, especially K12 Inc. (founded by Michael Milken and known for paying its executives multimillion dollar salaries) recruit students constantly, have high attrition, and get poor results.

In light of Jesse Calefati’s stunning expose of K12 Inc. in the San Jose Mercury-News, I am surprised that these scam online academies got by with a tap on the hand. According to Calefati, the Virtual Academies have collected hundreds of millions from California taxpayers to run low-performing, ineffectual “schools.” ECOT in Ohio was audited and required to pay more than $60 Million. Excuse me, but a fine of less than $2 Million is trivial for these corporations. Chicken feed.

I hope that the fine of “less than $2 Million” is the beginning and not the end of the Audits. The for-profits are notorious for inflating enrollments and collecting money for phantom students.

Here is the audit.

Here are the articles that CDE sent.

CDE: Online Charter Schools Must Repay Misused State Dollars

By Richard Bammer

State Superintendent of Public Instruction Tom Torlakson on Monday said a pair of online charter schools must pay back nearly $2 million of improperly used Common Core education funds.

In a press release, he cited California Virtual Academies and three Insight Schools (together forming CAVA) must remit the dollars to the California Department of Education.

This latest among several other actions stems directly from an audit by the State Controller’s Office and commissioned by the CDE.

The Vacaville Reporter

Former Lodi Virtual Academy Fined $2M

By Jennifer Bonnett

A virtual academy that once had a key role in the Lodi Unified School District has been fined close to $2 million by the state for falsifying enrollment figures.

State Superintendent of Public Instruction Tom Torlakson has announced that the California Virtual Academies and three Insight Schools (together CAVA) must remit nearly $2 million to the California Department of Education in improperly used Common Core education funds.

Lodi News-Sentinel

Virtual Charter Academies In California Must Refund Nearly $2 Million To State

By Louis Freedberg

As a result of a just released state audit, the California Department of Education says a network of virtual charter schools must refund nearly $2 million in improperly used state funds that were intended for implementation of the Common Core standards in English and math.

In addition, the department will require the schools to conduct a new audit of its average daily attendance records and a number of other actions.

“The California Department of Education is committed to ensuring public schools follow the laws and regulations that safeguard taxpayer funds,” said State Superintendent of Public Instruction Tom Torlakson. “It’s critical that our students receive the resources they need to succeed.”


California Fines Charter School Chain $2 Million

By Sharon Noguchi

In long-awaited results of a 1½-year investigation, California’s finance and education chiefs on Monday issued a critical audit of the online charter-school chain California Virtual Academies, finding several contractual violations and irregularities and imposing a nearly $2 million fine.

The report ordered the charter firm to provide documentation around student progress, student-teacher ratios and excess oversight fees, among other things. It also demanded California Virtual Academies produce an audited opinion on the accuracy of its average daily attendance — on which California bases its payments to public schools, including charters — and to pay the California Department of Education $1,995,148 for improperly handled funds.

Mercury News

In June 2016, California State Superintendent Tom Torlakson called for an official audit of the for-profit K-12 Inc. virtual charter school after an expose of its shoddy results in the San Jose Mercury News by investigative reporter Jessica Calefati. See here for all her reports on K-12.

Where is that audit?

Did it happen? Does it exist?

The audit was supposed to be completed by March 2017.

“State Superintendent of Public Instruction Tom Torlakson announced Thursday that the California Department of Education has contracted with the State Controller’s Office to conduct an audit of California Virtual Academies (CAVA) and related charter schools because of serious questions raised about a number of their practices.

“The goal of the audit is to make sure these schools are spending public education funds properly and serving their students well,” said Torlakson.

“In 2015, CAVA’s corporate parent K12 paid its CEO Nathaniel Davis $5.3 million and CFO James Rhyu was making $3.6 million. Their base salaries were $700,000 and $478,500, respectively, which were dwarfed by additional pay and stock for their “performance.”

“In all, K12’s five highest paid executives received a total of more than $12 million in compensation last year. That’s one of the reasons Center for Media and Democracy has called K12 Inc.’s former CEO, Ron Packard, the highest paid elementary and secondary school educator in the nation.

“Nearly 90% of K12’s revenues–and thus its huge pay for executives–comes from Americans’ state or federal tax dollars.”

Should California taxpayers shell out $12 Million for executive compensation in a low-performing charter school?

If anyone knows the whereabouts of the missing audit, please let me know.

There were also supposed to be two separate investigations of CAVA (K-12 Inc), one by the State Attorney General, the other by the Legislature. What happened to them?

Despite the significant research demonstrating the failure of cyber charters, they continue to expand, according to a new study by the National Education Policy Center.

Secretary of Education Betsy DeVos was an investor in the worst of the cyber charter chains, the for-profit K12 Inc. started by Michael and Lowell Milken and listed on the New York Stock Exchange. It is not clear whether she divested. She has said she will encourage the growth of cybercharters, because any choice made by parents (she believes) is best for children.

Check out the NEPC report:

Find Documents:
Press Release:

NEPC Publication:

NEPC: William J. Mathis: (802) 383-0058,
Virtual School Performance: Gary Miron: (269) 599-7965,
Virtual School Research Base: Michael Barbour: (203) 997-6330,
Virtual School Policy: Luis Huerta: (212) 678-4199,
Virtual School Policy: Jennifer King Rice: (301) 405-5580,

More NEPC Resources on Virtual Education

BOULDER, CO (April 11, 2017) – Virtual Schools in the U.S. 2017, a three-part report released today by the National Education Policy Center, provides a detailed inventory of full-time virtual schools in the U.S. and their performance, an exhaustive review of the literature on virtual education and its implications for virtual school practices, and a detailed review and analysis of state-level policymaking related to virtual schools.

The growth of full-time virtual schools is fueled, in part, by policies that expand school choice and that provide market incentives attractive to for-profit companies. Indeed, large virtual schools operated by for-profit education management organizations (EMOs) now dominate this sector and are increasing their market share.

Although virtual schools benefit from the common but largely unsupported assumption that the approach is cost-effective and educationally superior to brick and mortar schools, there are numerous problems associated with virtual schools. School performance measures, for both full-time entirely virtual and full-time blended virtual schools, suggest that they are not as successful as traditional public schools.

The virtual education research base is not adequate to support many current virtual school practices. More than twenty years after the first virtual schools began, there continues to be a deficit of empirical, longitudinal research to guide the practice and policy of virtual schooling.

State policymaking in several key areas – such as accountability, teacher preparation, and school governance – continues to lag.

An analysis of state policies suggests that policymakers continue to struggle to reconcile traditional funding structures, governance and accountability systems, instructional quality, and staffing demands with the unique organizational models and instructional methods associated with virtual schooling. Accountability challenges linked to virtual schools include designing and implementing governance structures capable of accounting for expenditures and practices that directly benefit students.

The report’s policy recommendations include:

The specification and enforcement of sanctions for virtual schools and blended schools if they fail to improve student performance.
The creation of long-term programs to support independent research on and evaluation of virtual schooling, particularly full-time virtual schooling.
The development of new funding formulas based on the actual costs of operating virtual schools.

Find Virtual Schools Report 2017, Alex Molnar, Editor, on the web at:

K12 Inc. is the largest provider of online charter schools. This sector is probably the worst part of the charter industry. CREDO reported last year that for every 180 days of online enrollment, a student will lose 180 days in math, and 72 in reading.


At its shareholder meeting on December 15, a group of shareholders proposed that the corporation become transparent as to how much it spends on lobbying.


As reported on Valerie Strauss’s blog, shareholders wanted to know more:


At a meeting scheduled for Thursday, shareholders are going to ask for a vote on whether the company should be required to publicly disclose details about its lobbying efforts in various states. The Arjuna Capital shareholder resolution asks that K12 prepare an annual report showing:


Company policy and procedures governing lobbying, both direct and indirect, and grass-roots lobbying communications.
Payments by K12 used for (a) direct or indirect lobbying or (b) grass-roots lobbying communications, in each case including the amount of the payment and the recipient.
K12’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
Description of the decision-making process and oversight by management and the board for making payments lobbying payments.


It is not known whether their efforts to get the company to disclose its lobbying activities were successful.


One of the proponents of transparency is Bertis Downs, who owns K12 Inc. stock and is a member of the board of directors of the Network for Public Education. He is a public school parent in Athens, Georgia.


Strauss wrote about him:


The new shareholder effort is being led by Bertis Downs, a public school advocate in Athens, Ga., who spent his career providing legal counsel and managing the rock group R.E.M., and who bought K12 stock a few years ago. Asked why he is taking this action, Downs said in an email:


My motivation in filing for this disclosure of K-12’s lobbying activities stems from my overall curiosity and interest as a parent and a shareholder in knowing more about what lobbying is done, whether through ALEC or directly, that leads to the so-called “education reform” laws being passed all over the country. How much does the company spend and how do they spend it and what results do they get for it? And is any of that good for meaningful teaching and learning in our schools? And is it good for the company and its shareholders?


At some point, parents should wake up and stop sending their children to these “schools.”