For-profit online school company tries again to open N.C. school -

By Sarah Ovaska | Jan 24, 2014


A for-profit online school company has kept its eyes on North Carolina’s public education funding stream and recently renewed attempts to open a taxpayer-funded virtual charter school.

If granted permission to open, K12, Inc., a Virginia-based education company traded on Wall Street (NYSE:LRN), would operate a school where students take classes from their home computers under the supervision of their parents.

The company is taking a two-pronged approach in North Carolina to approval. N.C. Learns, a non-profit shell organization set up to house the proposed school, asked the state’s highest court earlier this month to hear an appeal from litigation after a failed 2012 attempt to open a school here while it applied in December to open virtual charter school in the fall of 2015.

The N.C. Virtual Academy, which already has a placeholder webpage on K12’s company website, hopes to attract up to 2,750 kindergarten through high school students in its first year.

As the nation’s largest online education company, K12, Inc. runs publicly-funded charter schools in 33 states, a robust business that accounts for 86 percent of the $848 million in revenue the company reported earnings to investors in its 2013 annual report. But with financial success has come criticism for lackluster student performance at several of its schools, including graduation rates of just 22 percent in Colorado and a Florida investigation that found a handful of teachers taught some classes they weren’t certified in.

Proponents of K12, Inc. say it offers a much-needed flexible choice to students who aren’t being served well in traditional school environments, and many students are able to succeed academically in the online environment.

The company also garnered negative attention in other states for its aggressive pushes for favorable laws in state legislatures and generous campaign contributions, including more than $1.2 million the company contributed form 2004 to 2012 to Democrats and Republicans in races in Virginia, Florida, Georgia and other states.

In North Carolina, the company has already hired four lobbyists for this year’s short session, including former Republican state Rep. Jeff Barnhart of Cabarrus County. Another Cabarrus County lawmaker, Republican state Sen. Fletcher Hartsell, serves as the legal counsel for N.C. Learns, the shell non-profit applying for the charter school.

Cabarrus County’s school board gave its backing to the K12, Inc.-school in 2012 in an agreement where the school district agreed to host the statewide school in exchange for a kickback of revenues brought in by the new virtual school.

Reports of poor performance have continued to plague the company, with the Lawrence, Kan. school district cancelling a contract with the company this month after the virtual high school posted a graduation rate of just 26 percent. The other two high schools in the district graduated more than 90 percent of its students.

New bids to open

A petition for discretionary review was filed Jan. 7 with the N.C. Supreme Court by N.C. Learns following a unanimous decision by a three-judge N.C. Court of Appeals panel to uphold a trial courts’ decision that state board of education acted properly when it declined to take up a 2012 application from the school.

The petition asks the state’s highest court to take up the case because it has “significant public interest and involves legal principles of major significance.”

“This case involved the nexus of freedom of educational choice and basic tenets of administrative law,” Hartsell wrote in his petition to the state supreme court.

The court’s justices have not issued a decision about whether they will take the case.

Meanwhile, N.C. Learns also filed an application (click here to read) with the N.C. Department to Public Instruction in December to open up a virtual school in the fall of 2015.

It’s one of two online school companies in the running to operate what could be the first virtual charter schools in the state. Connections Academy, a for-profit school system owned the giant education company Pearson (NYSE:PSO), also filed an application through a non-profit group to open a charter school in 2015.

The state runs the N.C. Virtual Public School, an online-based system where students around the state can take individual classes over an Internet platform but does not offer a fulltime online option.

The K12-run school, N.C. Virtual Academy, hopes to attract as many as 2,750 students from kindergarten through high school in its first year, at a cost the school estimates will be $18 million of taxpayer money, according to the application filed with the state education agency. The application rejects a lower funding model adopted by the State Board of Education for virtual charter schools, which would pay approximately $3,500 a student instead of the $8,000 to $10,000 brick and mortar charter school can receive. That scale of pay is “not viable for a fulltime online school” and the K12-run school requested higher payment.

The state board also limits class size in virtual schools to 50 students for every teacher, but the N.C. Virtual Academy also asks for a pass on that requirement. The school estimates in its application it will assign one teacher for every 60 elementary school students and one teacher for every 180 middle-school or high-school students.

The State Board of Education will make their decision in June, after applications for the virtual schools and nearly 60 other charter schools are vetted by a charter school advisory board.

Chris Withrow, the chief technology officer of Warren County schools who applied on behalf of N.C. Learns, said the virtual charter school would offer a needed option to parents in North Carolina.

“We look forward to participating in the process of charter selection and hope that we will be successful,” Withrow wrote in an emailed statement.

But Rodney Ellis, the president of the N.C. Association of Educators, said that he continues to be wary of K12’s venture into North Carolina, and warns that the charter school run by a for-profit entity could cause more harm than good to students. NCAE intervened in previous ligation involving K12, Inc. *

“Education is not about teaching children with these groups, its more about making profit out of them,” Ellis said. “I haven’t seen anything expect for their self-promotion that there are benefits to K12.”

*:Note: The N.C. Justice Center, an anti-poverty state advocacy group that N.C Policy Watch is housed under also joined litigation in an amicus capacity in opposition to the virtual charter school.

Correction: This post changed from the original to reflect that a Florida education department investigation found a few K12, Inc. teachers taught virtual classes in subjects they were not specifically certified in, though the teachers did have certification to teach in Florida.


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Sarah Ovaska works with N.C. Policy Watch.

Comments (8)
Posted by: Beth G. Johnson | Jan 24, 2014 14:13

Virtual on-line schools are not a good way to spend public education moneys.  If parents and their children are not satisfied with their county's public school, there are 2 options - work to improve the schools for the whole county or home school that family's children.  There is no need or reason to spend NC taxpayer's money paying K12 to start a virtual school system.

Posted by: Charles Zimmerman | Jan 27, 2014 09:39

            The key phrase is "for profit". This kills it for me right off the bat. Furthermore, OUR public schools were deseigned to be a melting pot whereby students of all races, ideologies, etc, etc, come together and meld as one. Unfortunetly, there are many instances whereby certain ideologs chose to not subject their kids to such melding. That they would then ask US to support their subversion is a travesty. They and they alone should bare the cost of such action.


Posted by: Scott Lilly | Jan 27, 2014 18:05

I have a slightly different perspective.  First, our schools were not originally designed to be a melting pot.  They originally were designed to educate - somewhere between one-room schoolhouses and today's melting pot of government administration of a very large Socialist government program, things broke when measured by inflation-adjusted spending and student performance.


The argument can be made that the melting pot social experiment is failing.  Even if well-intended and born of the "separate but equal" from generations past, the melting pot in schools aren't performing well by most any measure.


But don't let a "for profit" label fool you.  Non-profits are just a way to file taxes.  Non-profit executives find creative ways to spend the "profits" so that they don't lose their non-profit tax status: bonuses, lavish employment benefits, unnecessary construction projects, "workshop" trips to Hawaii, etc.  Conversely, you can find some "for profit" companies that do much better than non-profit ones. (Measured in dollars per desired result.)


This would be an interesting test: if the "for profit" school opened in NC and was able to be granted the same per-student funding that public schools get.  What would happen if students performed better, teachers were paid better, and whoever owned the school made a profit?  Who would be arguing that this "for profit" school should be shut down?  And why would they make that argument?  Remember, students learn for free.  It's everything else that costs money.




Posted by: Charles Zimmerman | Jan 28, 2014 10:03

       No one should profit from the public duty of education of OUR kids. No one. Nor should the state relinquish its duties as defined in the N.C. Declaration of Rights:

Sec. 13.  Religious liberty.

All persons have a natural and inalienable right to worship Almighty God according to the dictates of their own consciences, and no human authority shall, in any case whatever, control or interfere with the rights of conscience.


Sec. 15.  Education.

The people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right.


As most "charter" schools are religious in nature and chose to discriminate as to their students religion, this is absolutely unacceptable. Furthermore, most charter schools do not take disabled, diadvantaged or otherwise special needs kids. Simply stated, as history has documented so far, in too often the case "charter schools" exits in order to discriminate or otherwise avoid the requirements of the declared rights in the Federal or State constitutions. WHILE USING OUR TAXES TO DO SO!  This is unacceptable.


    And! While in the course of fulfilling their duty of equaly protecting "all persons" naturally inherent or otherwise inalienable rights, there is most certainly a melding effect the result of which is of great bennefit to an ordered society by which as established by those people WE call OUR Founders, We have an obligation to defend "all persons" from oppression of any kind.

        Charter schools have, by and large chosen not to honor any such obligation.

         Liberty ain't free. It not only requires due diligence, it requires taxes fairly assessed and responsably applied.



Posted by: Scott Lilly | Jan 28, 2014 14:11

"No one should profit from the public duty of education of OUR kids." = Opinion.


"Religious liberty" - Not so much in schools.  A NC teacher was forced to send home an apology last month because a student distributed Christmas cards which read in part "Jesus loves you."  The teacher also said she spoke with the student and asked he never do that again.  One must wonder if that 3rd grader was taught to be ashamed of his religion that day.


And regarding NC's duty to "guard and maintain" the right of a State-provided education, there's no mention that the State can be the ONLY education provided.


Watch the film "Indoctrination".  NC teachers are referenced directly in the movie:


Posted by: Scott Lilly | Jan 28, 2014 20:51

Here is how the NC teacher is referenced in the movie:


The important part: "...sadly, public school educators are forbidden by law from even mentioning Jesus to students..."  To me, that is an incompatible system of education for a Christian parent and one that I prefer to use my tax dollars to select an education system of MY choosing for MY children.


And here is a clip of part of that interview:


Posted by: Charles Zimmerman | Jan 29, 2014 10:11


        The teacher was correct in their actions. There is no right to prosylitize in public schools. In fact OUR public schools must equally protect against any such thing. "Jesus" is not a Founding Principle. AND! Given the opportunity, Washington, Madison, etc, chose not to use "Jesus" as "the author of our religion", instead used "God". Page 58-59 of Jeffersons Autobiography is quite clear, if you care to read it for yourself.

         Public school teachers who teach historical sciences may inform their students about the "self-evident truth's" of any religious icon. They may compare religiouns. They cannot favor one religion over another or otherwise use OUR taxes to promote any religion as "the one". I'd suggest they use Madison's Remembrance and Remonstrance Against Religious Assessments in Favour of the Teachers of the Christion Religion to document OUR Founding. Madison lists 15 reasons why no taxpayer should pay taxes in support for a religion they object to.

         Thankfully, James Madison, Washington, Jefferson, etc, were religious historians who created this nation as a secular republic. Jefferson duly noted that if OUR schools taught the principles of a republic, the young men would all be Unitarian. The six Presidents embraced not just the Deistic notion of naturally inherent or otherwise inalienable rights, but the "self-evident truth's" of Jesus the man.

            While you are free to teach your kids as you please, you are not free to withdraw your taxes for OUR public schools. I.e. you bare the cost of non-compliance. Unfortunetly your kids are the ultimate victom.

              Teaching the Founding Principles is not "indoctrination".



Posted by: Scott Lilly | Jan 29, 2014 13:06

Mr. Zimmerman:


My point would be that the teacher asked the student to give up his freedom of religion right and his freedom of speech right at the school door.  The STUDENT gave a card to another student that says "Jesus Loves You" and the government employee gave instruction to stop doing that.


The same could be said for a graduating student having the microphone cut off during their speech because she uttered the word "God".

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