Follow the Money

Cui Bono (who profits)

As noted in a prior post, virtual schools in Ohio are currently a $218 million dollar (per year) experiment.  Pretty soon you are talking about real money and real millionaires. 

It is not the teachers or administrators who are getting rich.

Pearson bought Connections Education which includes the Connections Academy Schools and Nexus Academy for $400 million.  They have since branched out to international schools and are marketing all over the world.  They are also a major force behind the common core standards.

Private equity firm Apollo Management LP is selling Baltimore online schooling company Connections Education LLC to U.K. publishing giant Pearson plc for $400 million, Pearson said Thursday, Sept. 14.
Apollo and Sterling Partners, the target's minority owner, will pocket nearly the entire amount because Connections Education has little debt, a person familiar with the company said.
The two PE firms evidently will turn a profit. In September 2004, according to a financial filing, they paid $12 million to buy the business from Educate Inc., a K-12 education services provider Apollo had purchased for $283 million the previous year.
It isn't known how much additional capital, if any, New York-based Apollo and Baltimore-based Sterling have put into Connections Education since then.
Apollo executives were unavailable for comment. Sterling did not return a message seeking comment.
Connections Education has enjoyed spectacular growth over the past seven years. It posted less than $6 million in revenue the year Apollo and Sterling bought it.
This year, revenues are likely to hit $190 million, Sterling said.
Through its Connections Academy business, the company provides online instruction to more than 40,000 students in grades K-12. It operates "virtual" accredited public school in 21 U.S. states.
"Virtual schooling is an attractive choice for a growing group of American parents, and in the next decade it will take off in other countries," Pearson chief executive Marjorie Scardino said in a statement.

There are some justifiably angry folks as to the privatization of public schools, control of testing, and the pushing of private curriculums by Pearson.  An effort is underway to boycott Pearson.

http://unitedoptout.com/boycott-pearson-now/

 

 

As noted in an earlier post, the Connections Academy Pricing plan:

 

"a representative of Connections explained that its services were available at three price points per student:

Option A: $7,500, a student-teacher ratio of 35-40 to 1, and an average teacher salary of $45,000.

Option B: $6,500, a student-teacher ratio of 50 to 1, with less experienced teachers paid $40,000.

Option C: $4,800 and a student-teacher ratio of 60 to 1, as well as a narrower curriculum

Ohio Connections Academy School report card $19 million per year buys you this

Ohio Connections Academy, Inc 3740 Euclid Ave Ste 101 Cleveland, OH 44115-2229
Principal:				Sara Deaterla
Phone:				(216) 361-9460
Enrollment:				3,123
Achievement Standards met (62.5%) D Performance index (92.0) C Districts are measured against students' passing rate on 24 state tests given in several subjects and at several different grade levels. To meet the state standards, 75 percent of students must pass each exam. The number of standards met is used to calculate a letter grade. A second letter grade is tied to the district's "performance index" which gives credit for how well all students score on tests, giving more weight to students who perform above passing.
Progress (Value-added) All students F Gifted students NR Lowest 20% in achievement D Students with disabilities F In recent years, districts have been judged by "value-added" scores, or how much progress students made in a year's time. Now, districts will receive four progress-related letter grades: one for students overall and one each for gifted students, students who are considered low-performing because they score among the bottom 20 percent of their peers and students with disabilities.
Gap closing Gap closing (annual measurable objectives) F For the first time, the state is scrutinizing how well districts are serving all students, regardless of income, race, ethnicity or whether they're native English speakers. Only math, reading and graduation rates are considered in measuring how well districts serve students. Only districts that serve all 10 possible demographic groups adequately can earn an A grade. On the report card, the state calls this "annual measurable objectives."
Graduation 4-year graduation rate F 5-year graduation rate F

E schools in Ohio $218 million dollar experiment (per year)

In theory, a virtual school could be a good program for learning if it targeted students who would likely benefit from its schools.  These would include those highly organized and motivated students and parents.  A personalized instruction by sitting in front of a computer for hours per day.

In reality the schools accept and even target all students, including at-risk students.   It is also an easy fix to stay out of truancy court.  The results speak for themselves.  Is this the best service for Ohio Students? It is an expensive experiment.

A study in 2011 of Ohio's seven statewide online schools found that:

•"Of Ohio's 7 state-wide E-schools (which account for 90% of all E-school enrollment), six are not even rated "effective" by the Ohio Dept. of Education.

•5 of the 7 have graduation rates worse than Cleveland Municipal Schools, which has the lowest graduation rate of all traditional school districts.

•Far from saving money, E-Schools actually cost the state twice as much per pupil as traditional public schools."

 

Source: Ohio E-Schools: Funding Failure; Coddling Contributors, Innovation Ohio, 5/12/11; Cyber schools flunk, but tax money keeps flowing, Politico, 9/25/13.

 

So how does one get these students?  Market ,market, and market.  As the schools cannot discriminate, put together some slick marketing materials, employ a good sales force and sit back and collect the profits.

The USA TODAY analysis finds that 10 of the largest for-profit operators have spent an estimated $94.4 million on ads since 2007. The largest, Virginia-based K12 Inc., has spent about $21.5 million in just the first eight months of 2012.

 

So what is the motivation?  Profits or students?  Well since the e-schools do not have the quality, they will make it up in volume!

 

Again, look at the latest results in Ohio.

 

Profit model for Connections Academy

"a representative of Connections explained that its services were available at three price points per student:
Option A: $7,500, a student-teacher ratio of 35-40 to 1, and an average teacher salary of $45,000.
Option B: $6,500, a student-teacher ratio of 50 to 1, with less experienced teachers paid $40,000.
Option C: $4,800 and a student-teacher ratio of 60 to 1, as well as a narrower curriculum.
Despite lower operating costs, the online companies collect nearly as much taxpayer money in some states as brick-and-mortar charter schools. In Pennsylvania, about 30,000 students are enrolled in online schools at an average cost of about $10,000 per student. The state auditor general, Jack Wagner, said that is double or more what it costs the companies to educate those children online. "

http://www.nytimes.com/2011/12/13/education/online-schools-score-better-on-wall-street-than-in-classrooms.html?pagewanted=all&_r=0

Based on the current report card, it looks like Ohio is paying for Option A but getting Option C and the commensurate results from Ohio Connections Academy.

Charter School Treasurer

This is the same treasurer that is/was used by Ohio Connections Academy.  I wonder how many other charter schools she served as the acting treasurer.

Trial is coming up soon.

CINCINNATI, OH (FOX19) -

A warrant that was briefly issued for the two women who were indicted for stealing from an Over-the-Rhine school has been recalled.

Lisa Hamm and Stephanie Millard are both facing 26 counts of theft in office, tampering with records, tampering with evidence and unauthorized use of property for taking property from the Ohio Department of Education and/or the Cincinnati College Preparatory Academy.

The indictment comes after an investigation by the state auditor's office.

The pair were scheduled to appear in Hamilton County court on Friday morning. Neither showed up so the judge issued a warrant for their arrests.

Attorney Mike Allen tells FOX19 that his clients didn't receive any notice that they were due in court.

The defense and prosecution came to an agreement to withdraw the warrant and their case has been moved to Friday, April 22.

According to the indictment that was filed in Hamilton County, the incidents took place from October 2006 until February of this year. Hamm is accused of taking more than 20 trips with staff and family members, some for training purposes but most for "best practice visits," and spending way over the allotted fund amounts approved by the board. Millard, the school's contracted treasurer, paid each month's credit card bills without the knowledge of board members.

The alleged misspent money totals more than $148,000.

Court documents state that among Hamm's trips was a $20,000, 10-day tour through California which covered expenses such as a rental car with a hired drivers, expensive meals and hotel stays above and beyond what was required for her training in San Diego. On other occasion, Hamm was supposed to make visits to Chicago charter schools but attended a Tina Turner concert instead. Hamm also coordinated a trip to Boston to see Oprah Winfrey and took a sight seeing tour of Europe when the purpose of her trip was to fulfill residency requirements for her doctorate program.

According to the school's website, Hamm is the superintendent, founder and developer of the school, which opened in 1999. The school has an enrollment of 700 students in grades K-12.

Hamm has been suspended without pay.

Copyright 2013 WXIX. All rights reserved.

K-12 Applicable to all virtual Charter Schools in Ohio?

http://www.tilsonfunds.com/K12-Tilson-9-17-13.pdf

An excellent article on why the future of K-12 is bleak but profitable

Cyber Schools Flunk but Tax money keeps flowing

So what is the wating period?  Should we measure in time or millions?  When does a virtual school need to perform?  ECOT = F, OHVA = F, Ohio Conections Academy = F  I detect a trend here.