The Convict Who Stole Public Education—Milken’s Online Learning Cash Cow

[Modern School]

We hear plenty about the billionaire boys club that has taken control over much of the education reform debate, the unholy triumvirate of Bill Gates, Eli Broad and the Walton Family Foundation. However, they are just the tip of the iceberg. The rogue’s gallery of Ed Deformers who are buying up charter schools, capitalizing on NCLB, bashing teachers and generally destroying public education as we know it, includes numerous hedge fund managers, bankers, billionaires, millionaires and even a few convicted felons, like junk bond peddler Michael Milken.

Virtual Charter Schools Provide Virtually No Benefit to Children (But A Lot To Investors)
K12, the largest U.S. operator of taxpayer-funded online charter schools, has become a cash cow for Milken, according to a recent report in Bloomberg Business Week (cross posted in 4LAKids). K12 has 81,000 students enrolled full-time in its online programs and is expected to generate $500 million in revenue this year (it made $21.5 million in profits last year). Since the company went public in 2007, its stock has doubled in value. K12 online purchased Kaplan Virtual Education this year, a deal that should vastly increase K12’s value and profits, as well as its share of the online learning market.

Online charters make a lot of sense for entrepreneurs. Not only can they do away with teachers unions, but they can do away with teachers entirely (or at least significantly reduce their numbers). They do not need to pay for facilities, counselors, nurses, bus drivers, custodians, librarians, or cafeteria services, and they offer no athletics, band or theater. While most school districts do not pay them the same amount that physical charter schools receive, many argue that even their reduced funding is far too high. In Pennsylvania, for example, K12’s schools receive 80% of what physical charter schools receive, according to the Bloomberg report, an awful lot when you consider how few of the services of traditional physical schools they actually offer. Furthermore, every penny they get from a school district is money taken away from physical schools.

K12 was cofounded by Ron Packard, a former Goldman Sachs banker.

To read the full article, please see
http://modeducation.blogspot.com/2011/06/convict-who-stole-public.html

[JDPriestly]

1. I can't wait to see Milken's on-line marching band.

And the online, All-Star football team is a real thrill.

[exboyfil]

2. What I can't understand is that

K-12 is getting $6,200/student when an organization like the North Dakota Center for Distance Education can charge $230/class (out of state rate) for a semester class. A full schedule with them would only be $2800/yr + books.

I think a public online/correspondence option is a good thing. It gives students more options especially those going to school in poor public school locations. We have no public options for online/correspondence in my state, and I have paid for my children to take three classes to this point. I plan to do a few more coming up. In fact I am getting really close to going to a full Homeschooling model with my youngest or sending her to a private school.

$6,200 is a ridiculous amount for an online education, I think something in the $3,000-$4,000 is more reasonable. Note that we spend $14K/student nationally when all expenditures are added up at the local, state, and federal level and divided by the number of public school students.

For the local public school it comes down to the marginal cost per student. They have an infrastructure to support and an administration in which to spread costs over, but fewer students mean fewer teachers and support staff which does reduce their expenditure. Where that variable cost number is in relation to how much the state pays for virtual school is the question. If it is less expensive to educate using a virtual option, then what is the problem if it is the family's choice? The children should not be a captive to the system. You as a public school do better than the virtual option to keep these students. Control your charges so that their behavior does not prevent learning for other students. Keep the children safe so that they are not bullied and physically attacked. Hire and keep teachers who are inspiring.