Despite mediocre records, for-profit online charter schools are selling parents on staying virtual

In August 2020, Amanda Nemergut was looking for alternatives to in-person public school for her three daughters. Her fourth grader, Paige, has ulcerative colitis, and she worried about the risk from Covid-19 of sending her back. Her other two girls, in third and fifth grades, would be home on alternating days under the school’s hybrid schedule. She had enough to manage with her evening bartending job, so she was seeking a simpler option.  

Then she saw an online ad for the Ohio Distance and Electronic Learning Academy (OHDELA). It’s a virtual charter school, the tuition paid with taxpayer dollars, run by the for-profit charter management company ACCEL Schools. The school’s website promised a “rigorous education experience” delivered by highly qualified teachers. Nemergut enrolled all three girls.

Soon Nemergut and her kids, who live in Conneaut, Ohio, noticed problems. OHDELA’s model relies on parents to help supervise their children’s instruction, and Nemergut did, stepping in throughout the day to aid with technical glitches and questions on assignments. But there were issues she couldn’t fix: The homework didn’t match the material teachers covered in class. When teachers gave live instruction — no more than 20 minutes per class, Nemergut estimated — students couldn’t ask questions because chats were blocked. When her daughters sent questions by email, they got no answer. Teachers didn’t give credit for work her kids had turned in and marked them absent for classes they attended, she said.

“My kids were like, ‘What are we doing wrong?’ And I said, ‘You guys aren’t doing anything wrong. It’s the school,’ ” said Nemergut. When she complained to teachers, they blamed technical support or the curriculum designers, she said. Her daughters’ grades fell; her third grader went from getting A’s and B’s to failing all her OHDELA classes.

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As parents fearful of coronavirus’s spread and frustrated with their schools’ forays into remote learning seek other options, they are increasingly turning to virtual for-profit charter schools like the one Nemergut chose. At OHDELA, enrollment more than doubled to about 5,200 students in the 2020-2021 school year, according to state data. At Stride Inc., the nation’s biggest for-profit operator of charters, enrollment grew by 45 percent, to almost 157,000, and revenues in its general education division rose 37 percent. Pearson, the parent company of Connections Education, the second largest for-profit online charter operator, reported enrollment growth in its virtual schools division of 20 percent in 2020.

One reason for the growth is the sort of advertisement that attracted Nemergut, which often touts the schools’ long experience in online instruction and teachers specially trained in remote learning. Equipped with big advertising budgets, the schools have stepped up their marketing during the pandemic, often advertising on children’s channels.

Yet the advertising belies these schools’ records serving students. OHDELA gets an F rating from the Ohio Department of Education, receiving failing marks on measures including students’ performance on state tests, academic growth and graduation rates. Overall, about 63 percent of virtual for-profit schools were rated unacceptable by their states in the latest year for which data was available, according to a May 2021 report by the University of Colorado’s National Education Policy Center (NEPC). Online charters typically lag behind other schools on measures including student academic outcomes and graduation rates, and have also been plagued by high student turnover. 

“What [Stride] and Connections (Pearson) have figured out is that it is less expensive to advertise and recruit more students than improv[e] the quality of their schools so that students would stay and learn.”

Gary Miron, an education researcher who co-authored a National Education Policy Center report on for-profit charter schools

Spokespeople from the schools say the criticism doesn’t reflect the fact that they often enroll students who are struggling academically, are enrolled for short periods, and have a history of changing schools frequently, a metric shown to hurt academic performance. They also say they are taking steps to improve retention and graduation rates. Courtney Harritt, a spokesperson for ACCEL, wrote by email that OHDELA’s enrollment surge hit just as the school year started, creating operational challenges, and that ACCEL is making changes after taking over the school from another company in 2018.

But with years of poor performance dogging many of these schools, experts worry about students getting left behind academically if more families opt for them, particularly now that the spread of the delta variant has amplified safety concerns about in-person learning and states and districts around the country are eliminating remote learning alternatives.

“It’s really easy for [these companies] to expand and just incredible how much profit they make,” said Gary Miron, an education researcher who co-authored the National Education Policy Center report. “For 12 years we’ve been documenting their disastrous outcomes, and they’re just resilient.”

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Virtual for-profit charter schools got started in the early 2000s, as the companies that run them seized on a business opportunity in online education pioneered by traditional public schools a half-decade earlier. Stride Inc., formerly K12 Inc., was founded in 2000 and by the following year had 900 students in Pennsylvania and Colorado. Today the company serves 157,000 in 30 states. All told, according to National Education Policy Center data, more than 330,000 students attended virtual schools in 2019-20, roughly 60 percent of them at for-profits.

When the pandemic hit in March 2020, the leaders of virtual charter companies quickly recognized a chance to attract more students to their rolls. “We believe the effects of Covid-19 will be a lasting tailwind to online education and especially to K12’s business model,” Timothy Medina, chief financial officer of Stride, told investors on a call the following month.

Now the spread of the delta variant is adding to the executives’ optimism about their companies’ continued growth. “[A] lot of the states that have spikes in delta variant, places like Texas, we just see sort of unprecedented demand,” James Rhyu, Stride’s chief executive officer, told investors in August 2021. “We think that a lot of people are going to have ongoing concerns about safety, and we think it bodes well for the long-term prospects for our business …”  

“My kids were like, ‘What are we doing wrong?’ And I said, ‘You guys aren’t doing anything wrong. It’s the school.’ ”

Amanda Nemergut, mother, Ohio

Stride spent about $1.8 million on TV ads in just the first quarter of 2021, up from $1.2 million in the same period last year, according to an analysis for The Hechinger Report conducted by the consulting firm Kantar Media. Connections Education spent $1.2 million in that period, almost quadruple last year’s spending, the analysis showed.

Much of both companies’ online advertising is directed at children, according to an analysis done for The Hechinger Report by The Century Foundation, a progressive think tank. Of Stride’s top online ad expenditures between July 2020 and July 2021, three of the top five were Spanish- or English-language YouTube channels for kids — like the CoComelon Nursery Rhymes site, where the company spent about $21,000. Connections spent even more on children’s web channels:  Its top five online ad expenditures were all on English-language kids’ channels, with the Kids Diana Show leading at about $167,000.

“The advertising decision and intention is that while the parent is typically going to make the decision, the child is the influencer,” David Schmidt, a former senior executive at both Stride (then K12) and Connections, wrote in an email; he is currently president of the education consulting firm Vality. (Ken Schwartz, a spokesperson for Stride, wrote in an email that the company “does not publicly disclose its marketing/advertising strategies.”)

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The marketing doesn’t reflect the schools’ poor track record serving students. Years of school ratings and student-level data consistently show subpar performance among schools run by for-profit charters. Of the 47 Stride schools that received ratings in the latest academic year for which data was available, 34 were rated unacceptable by their states, according to the NEPC. Of the 28 managed by Connections Education, 16 were found unacceptable.

These schools often defend their performance by saying their students are different — they’ve fallen behind academically because of social, emotional or medical issues that make it challenging for them to attend brick-and-mortar schools. But a 2015 study by a Stanford University research team compared academic outcomes of students at 158 online charter schools in 17 states with those of students in brick-and-mortar schools in their states who were matched on numerous characteristics, including prior test scores. The numbers were stark: The online charter students lost the equivalent of 72 days of learning in reading and 180 days of learning in math, based on a 180-day school year.

And a 2018 report by the liberal Center for American Progress found that for-profit virtual charters graduated students at significantly lower rates than nearby urban high schools that served larger shares of low-income students.

“We think that a lot of people are going to have ongoing concerns about safety, and we think it bodes well for the long-term prospects for our business.”

James Rhyu, Stride’s chief executive officer, on an investor call in August 2021

“What [Stride] and Connections (Pearson) have figured out is that it is less expensive to advertise and recruit more students than improv[e] the quality of their schools so that students would stay and learn,” wrote Miron by email. 

Often, as Nemergut discovered, virtual charters provide minimal instruction and require that parents give academic support to their kids. The typical online charter offers just three to four hours of live instruction per week, less than students in brick-and-mortar schools get in a day, according to a 2015 report from Mathematica Policy Research. The schools tend to be lightly staffed, too: In 2019-20, for-profit charters averaged about 29 students per teacher, compared with 16 per teacher at public schools, according to the NEPC.

Many parents, unaware of the history of virtual charters, continue turning to these schools. Vermonica Murphy, 49, moved her and her husband’s son, Ernest Murphy Jr., out of his public school in West Columbia, South Carolina, in October 2020 after bad experiences with the school’s online platform. In her internet research she’d come across the Cyber Academy of South Carolina, a publicly funded school run by Stride, and was impressed. “They’re advertised as one of the best schools, so I thought, ‘Maybe we can get in there,’ ” she said. 

virtual charter schools
Amanda Nemergut’s fourth grader, Bailey, works through a lesson. Credit: Image provided by Amanda Nemergut

But after enrolling Ernest Jr., she and her husband began noticing that he was receiving only 15 to 20 minutes of live instruction in each of his four classes: English, math, history and science. For the rest of the time, he was on his own with their help, they said. Murphy teaches business education at a middle school in a neighboring county. In her online classes last year, she was giving 30 to 45 minutes of live instruction in every class, she said.

Ernest Jr. logged into CASC classes every day but seemed increasingly disengaged and didn’t complete most of his work, his parents said. He’d made honor roll before the pandemic hit, but ended the 2020-21 school year failing all four courses, Murphy said. This year, the Murphys have decided to homeschool Ernest Jr.; Vermonica Murphy has health problems and Ernest Jr. has asthma.

The school disputes the family’s account. David Crook, CASC head of school, wrote in an email that students get 45 minutes of live instruction in each class.

But CASC has consistently performed poorly on state measures of school effectiveness. According to the state education department’s report card, the percentages of its middle schoolers meeting or exceeding grade-level expectations was lower, and in some cases far lower, than the South Carolina statewide averages in English, math, science and social studies in both the 2017-18 and 2018-19 academic years. (No ratings were issued in 2019-20 because of the pandemic.)

Crook said the report card figures are “not an accurate or comprehensive depiction of student achievement or student progress” because of changes in tests, curricula and other factors. Ryan Brown, a South Carolina Department of Education spokeperson, wrote in an email that “the information contained on report cards is accurate, and schools are given ample time to verify data on the report cards and provide a narrative prior to public release.”

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Some education advocates are demanding that states do more to hold for-profit charters accountable for their students’ outcomes. In most states, schools are funded based on how many students they enroll, regardless of whether those students succeed in school or even finish the academic year.

Advocates want to move toward funding virtual schools based on performance. The National Alliance for Public Charter Schools, a charter advocacy group, issued a document in 2016 along with two other organizations asking states to establish performance-based funding systems that pay virtual charters based on metrics like course completion and calling on charter authorizers to close chronically underperforming schools. The alliance’s leaders have complained that problems with virtual charters are giving the sector a bad name.

A few states have started moving in this direction. At least six — Florida, Minnesota, Missouri, New Hampshire, Texas and Utah — have created at least some performance-based funding mechanisms for virtual schools, according to the Education Commission of the States, which tracks state education policy. Under a 2018 law in Missouri, for example, virtual schools are paid a prorated monthly cost based on students’ completion of assignments and assessments.

Vermonica Murphy with her son, Ernest Jr. They quickly grew frustrated with the online for-profit virtual charter he attended last year. Credit: Image provided by Vermonica Murphy

But some education experts are skeptical that such changes will make a difference. “As soon as you put profit in the mix, then you put marketing in the mix,” said Carol Corbett Burris, executive director of the Network for Public Education, which issued a report critical of for-profit charters in March 2021. “A lot of these parents, I think, are victims. They are victims to the marketing push.” She wants to see online learning taken out of the hands of for-profits altogether.

Education leaders, meanwhile, say kids’ futures are on the line in getting virtual schooling right. U.S. Education Secretary Miguel Cardona said in June that he fears the effects of having vulnerable students who might benefit the most from in-person learning — like English learners — pushed into online options only because in-person schools aren’t meeting their needs.

Numerous studies show that parents of color were more likely to keep their kids learning remotely during the pandemic. Julie Marsh, a USC researcher who helped lead a team that interviewed parents in five states about their school choices this spring, said she worries that if that pattern continues, we’ll end up with “parallel programs” that provide kids of color with an inferior education.

Amanda Nemergut, for one, is through with virtual charter schools. This fall, her children’s school district reopened for in-person classes. Her daughters told her they were very excited to be going back, she wrote by email. Her girls, she added, “don’t ever want to experience online school again.”

This story about virtual charter schools was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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