CHARTER SCHOOLS COST MORE, DELIVER LESS
If passed in its existing form, John Kasich’s budget will result in large cuts to public schools and large increases in funding to charter schools. Supporters of charter schools will defend this choice claiming charter schools are providing the same – or better – educational opportunities for kids compared to public schools. They will also claim charter schools operate at a much lower cost to the taxpayer. But both claims are completely untrue.

Kasich will tell you he wants to spend “more dollars in the classroom” and that he wants to “improve our schools”, but charter schools in Ohio have a bad track record in both areas. Not only do charter schools perform MUCH worse than public schools, they also cost much more per-pupil. And in the case of schools managed by for-profit companies, a huge percentage of the money they receive from the state goes directly to the corporations that manage the schools instead of into the classroom.

As we pointed out last week Ohio’s charter schools actually receive 2.5 times MORE in per-pupil funding than public schools. And a study by Innovation Ohio, charter schools are way less effective at educating students than public schools:

“only 21 percent of charter schools rate effective or better … Meanwhile … 72 percent of traditional school buildings and 88 percent of traditional school districts rate effective or better on the state report card. In fact, 46 percent of public school buildings rate Excellent (A) or Excellent with Distinction (A+), while 45 percent of charter schools rate in Academic Watch (D) or Academic Emergency (F) – success rates that are almost exactly opposite one another”

FOR-PROFIT CHARTERS MAKE GREAT BUSINESSES, CRAPPY SCHOOLS


While there certainly are some charter schools out there doing good work, the majority are poorly serving the students they have been entrusted to teach while costing the taxpayers tons of extra cash. For-profit schools run by companies like White Hat and K12 take it a step further. Not only are many of these schools under performing, but all of them take much needed money away from public schools and out of the pockets of taxpayers and turn it into profit for the management company at the expense of their students.

The techniques these for-profit charters use to squeeze revenue out of their schools make a great deal of sense in the world of business: increased class size, lower labor costs, aggressive growth through advertising and marketing. But in the world of education, they can be absolutely disastrous for the students.

One of the most egregious offenders of putting profits before students is the Ohio Virtual Academy (OHVA), a high-growth, for-profit, online charter school that performs amazingly well as a business – but very poorly as an educator.

OHVA is managed by K12, a publicly traded company whose stock hit a 52-week high last week. Operations at OHVA are structured like a business instead of an educational institution and this is no accident. OHVA is setup to make money.

Ohio Virtual Academy is currently the 28th largest school district in Ohio. It is larger than Springfield and Youngstown school districts and it has grown 243% over the last five years, from 3,161 to 7,687 students. That growth is intentional. In the business world, growth = profits.

Even OHVA’s 7-member board is composed almost entirely of business and marketing professionals, and has only one individual with an education background. Three of the members have degrees in marketing and two have business degrees. And one is a beauty pageant coach with a degree in musical theater.

The problem here is not that OHVA has created a successfully operating business – which they absolutely have. The problem is that they have created this business when they were SUPPOSED to be creating a school. This isn’t private sector money funding a private sector operation. It’s public money. 100% public money. Money that was supposed to be spent “in the classroom” on educating students.

And we’re not talking about chump change here. OHVA received almost 45 MILLION dollars in state money last year, and $9.4 million in federal grants. That’s $55 MILLION in public money. And a good hunk of it went right into the pockets of K12.

According to K12′s 2010 annual report, money from OHVA accounts for 10% of the company’s total revenue, which works out to be about 38.5 MILLION DOLLARS. That’s 85% of the money OHVA received from the state flowing directly back to K12.

The bulk of that money is spent in the form of “Purchased Services” i.e. services provided by K12. The average spent on purchased services statewide for all districts is 16.41%. ECOT (Electronic Classroom of Tomorrow), the largest online charter school in Ohio only spends 23% on Purchased Services. But OHVA spends 60% of their total funding on purchased services.

It really makes you wonder where the money ISN’T going.

While there is certainly some savings to be had by not having a physical school building to maintain, the bulk of OHVA’s ‘savings’ (read: revenue) is gained through staffing. When it comes to human resources the school is organized more like fast food restaurant than a place of learning.

The high school has a single principal responsible for managing a very large staff of 233 and the staff to student ratio is also extremely high: 33:1. A typical public school will be around 16:1 and a private school around 12:1, meaning each OVA teacher has twice as many students as a typical public school teacher.

You’d think, because of the large class sizes, OHVA staff would be compensated accordingly, but they aren’t. They actually earn much less than their public school counterparts: $33,064/year on average vs. $55,958 for a public school.

And these number really help the bottom line. Statewide the average school’s salaries make up about 58% of operating expenditures. But by doubling class sizes and cutting salaries nearly in half, OHVA has been able to get it’s salary expenditures down to 18.6%!

All of these numbers are great news to the stock holders of K12. But if you are one of the poorly-paid teachers responsible for three times the number of students as a private school teacher, or one of the poorly-performing students fighting for your teacher’s attention, these numbers kind of suck.

Want a take a guess how this type of cost cutting affects student performance?

  • OHVA’s state report card grade has declined each year for 4 straight years.
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  • OHVA’s passing rate is 62.74%
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  • OHVA’s graduation rate for 08-09 was 54.1%, ranked 744 out of 839.
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    It really makes you wonder about K12′s advertising for the school. To whom are they comparing themselves? Higher test scores? More personalized attention? Really?

    The problem with OHVA and other for-profit charter schools is that their primary goal is to make money, not to educate students, and the affects of that profit-oriented approach to education are obvious in the numbers. Extremely high staff-to-management rates, extremely high student-to-teacher ratios and very low teacher pay may result in cheaper operating costs for the school and lots of extra revenue for the management company, but the students are ultimately the ones who pay the price.

    It’s exactly this kind of school that Kasich’s budget rewards with extra funding and that decision seems to fit in perfectly with his world view: decreasing pay for teachers while funneling tons of state cash to corporations. Kasich promised to help improve our schools and put more money in the classroom but his budget does exactly the opposite: it takes money out of the classroom and sends it to big education companies like K12 all while supporting schools that cost more and fail more students.

    (special thanks again to Greg Mild for helping me locate all of the statistics used in this post)

    Evangelize!
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    • Anonymous

      I worked to support a charter virtual school and to be fair the one I worked for always talked about delivering quality education and not about making money. . They also took in students that were flunking out of the public education system, so their scores would be somewhat lower. With that being said, there needs to be better monitoring and oversight on these schools. And if they fail to produce, we should have a “clawback” program in place.

    • Anonymous

      So how much stock does John Kasich own in this K12 outfit?

      How much stock does he own in ANY outfit that would benefit, directly or indirectly, from the privatization of public schools in Ohio or any other state?

      How about his cabinet? His education appointees? How much are they financially vested in this little experiment using my tax dollars?

      Can a conflict of interest be established? If yes, to what end? Maybe I’m reaching here.

    • Anonymous

      Great job, Joseph!

    • Annekarima

      Ohio does or does not allow homeschooling by parents?

    • Anonymous

      This is exactly what the Republicans want. Take private money, give it to corporations, and have an uneducated public who they can mislead easily.

    • Tomhawk13

      Greed, pure and simple. And the truth is buried under an avalanche of lies.

    • MissGov

      Ohio does allow for home schooling.

    • Anonymous

      The Republicans want an uneducated, powerless public that will watch Fox News and believe Beck, Hannity, and the rest of the propagandists. Kasich is trying to recruit more sheeple. I knew a charter school teacher who told me she wasn’t even making anything close to $20,000/year, she could not get books/equipment/chalkboards, and the children did not have a safe place to have outside recess. It is no surprise that she quit the charter school after one year. The principal that ran the school did not even have the proper certification to be a principal.

    • Anonymous

      Joseph, you deserve a gold star for this great information. The truth is that after a charter school fails, the public schools must take the children back only to find that the students are far behind their public school classmates. Charter schools take our tax money and make fat cats richer, and students unable to compete in an average classroom. How else are charter school owners making such profits that they are able to contribute tens of thousands of dollars to political campaigns? If the charter school students were receiving an excellent education, teachers were being paid as professionals, and classrooms were properly equipped, the profit margin would be smaller for the charter school moguls. It is almost like legal money laundering—money goes to the charter school owners and then they give it back to those politicians who loosened the restrictions on charter schools.

    • guest

      Agreed and thanks Joseph.

    • Annekarima

      The tea party people that I have had the bad opportunity to meet are very good at believing and repeating the words they learn at their masters feet. It is so obvious they do no study or search on their own, just take this crap as god’s truth. Then criticize me when I dare to point that out to them. All I can do is shake my head and avoid these people.

    • Annekarima

      How do those students do? I have known home schoolers where the schooling was taken very seriously and the children excelled over public school students. But that was not in Ohio.

    • DD

      Joseph, thank you for publishing this. The money-laundering scheme that is disguised as charter schools needs to be exposed and torn apart before our tax dollars are sent to the few people who are the owners. What a sham!

    • Gmild

      The student-teacher ratio includes all certificated staff that work with the students — counselors, intervention specialists, resource teachers, etc. At OHVA, they do not have many specialists of that nature. In fact, if you cut out their counselor and their intervention specialists, the ratio would be even higher!

    • Courtney

      This is a BEAUTIFUL article – and just what I keep trying to say, but am not able to put into consice language! Thank you!!

    • Courtney

      Yay for you – let me get you a “Parent of the Year’ award. I’m glad you are doing what you need to – but there are many parents who enroll their kids in these schools and DO NOT WANT TO DO ANYTHING ELSE WITH THEM. Do you honestly believe EVERY parent is helping their kid the way you are? The students fall farther and farther behind and then come back to me so I can ‘clean up the mess’ made by the charter. K12 is a group of thieves, cheats, and crooks and hopefully will pay for it in some way……..

    • pilsner

      The salaries of the staff and administors of public charters should be public information. Does anyone know where to access it?

    • Random Thoughts

      It all depends on the parents.

      I’ve known a few home schoolers who are very structured and have classrooms set up in their homes. The ‘students’ (their children) are engaged for the entire six hours or so, and the parents spend big bucks buying curriculum. I was asked to administer standardized tests to some since I have a teaching degree and the kids did very well.

      But then I’ve also known a homeschool family whose idea of ‘learning’ involved spending the day at the mall, or at the skating rink, or going to a movie in the middle of the day. ‘School’ was one giant vacation. That family ended up shipping their children off to the public high school once they passed the age that the parents no longer could handle teaching the curriculum, and of course the kids were miles behind.

      My chiropractor ‘home schools’ her children, meaning she brings them to work with her. While she sees patients, her sons sit in a room in the office and work in workbooks all day. There is little or no one-on-one contact with their mother, and usually when I go for an appointment in the afternoon, the boys are playing video games on their PSPs. I’d be interested to know just how much they’re getting out of that setup.

    • Tpiteo65

      great info Joseph. to bad that Ohios other media outlets have lost the nerve to do real reporting. and they wonder why they are failing. if these facts about the money that is wasted by these charter schools and the way repukes whore themselves out. then maybe people would not support these choices.

    • gmild

      If what you are saying is true, then why is the state of Ohio paying this company so much money while the parents essentially home-school their children?

    • Littleguy

      SCARY – Your tax dollars at work.

      No sooner had I read this story, I then went to my normal weather page to check the weather. What pops up but an ad for “free” K12.com online public school!!!

      I know damn well the sons of bitches are tracking my internet and popped up that ad because I read your story. That is the first I have ever seen it and never on that site!

      And to think, they are paying for that advertising with tax dollars stolen from my local public school…..

      I didn’t give the bastards the satisfaction of a website hit

    • Annekarima

      Thank you. That is what I would expect. Why are not more parents doing that or are they and keeping quiet?

    • Annekarima

      Thank you to all of you who replied to my homeschooling question. I know parents who insisted on it and took it very seriously, getting together and doing it together and very successful with it. However, not in this state. I suspect parents here who are successful are keeping quiet for fear that might be taken away from them.
      Another question, this one perhaps silly, but I hope makes a point. Why didn’t those watching “Waiting for Superman” – balance – that out with an “Inconvenient Truth?” Proproganda is just that. Proproganda.

    • Anonymous

      Captain Clueless wants Ohio’s new cash crop to be homegrown stupid. Can we please recall this guy somehow? Maybe if we tie a hotdog on a string we can lure him out of the state before he does any more damage.

    • simes

      The Columbus Dispatch ran a lengthy article several years back regarding David Brennan and White Hat Management. As I recall for profit charter schools, at least at that time, were not required to disclose their profits so some how I doubt that they are required to disclose the salaries of their employees. And so the unlevel playing field continues. Yet, you can go to Buckeyeinstitute.org, plug any any teacher’s name, and district and get their exact salary.

    • Miltonguendica

      I like would like to ask you some question about the article. Are charter schools a solution to improve public education? what would it be the best option from government to support public education. Do you have any video on it.

      You can write me to my mail at miltonguendica@hotmail.com
      Thank you

    • http://twitter.com/salvagingsanity Zeelia

       For-profit colleges have been a disaster.  Do we really need to repeat this privatization game with our K-12?

    • http://plunderbund.com Joseph

      Excellent comment. +1

    • Naomifyffe

      If they keep takeing from ours schools I think our kids will suffer from it.with out schooling how will our children make it when they grow up and time for them to go out on thier own,I think we combined some of the schools and add more teachers to teach more students.They should look where they are spending too much money and spilt it where it needs to go.School is so importan Countries without school will hurt our childerns,how will they learn to read learn math learn about our country.School is what helps us get compairs us for thier lifes after school is completed.Will they know how to fill out a applacations for a job.we need to come to together and find a way to keep our schools open and have enough funds for books and busing them .

    • Naomifyffe

      If they keep takeing from ours schools I think our kids will suffer from it.with out schooling how will our children make it when they grow up and time for them to go out on thier own,I think we combined some of the schools and add more teachers to teach more students.They should look where they are spending too much money and spilt it where it needs to go.School is so importan Countries without school will hurt our childerns,how will they learn to read learn math learn about our country.School is what helps us get compairs us for thier lifes after school is completed.Will they know how to fill out a applacations for a job.we need to come to together and find a way to keep our schools open and have enough funds for books and busing them .

    • OhioHeidi

      Not ONE mention about the level of education the students who finally leave public schools for a real CHANCE they we NOT given while attending public schools!  I bet  the kids come in soooooooooooo behind!!!   And when you work online, you can handle more students.  This article is sooooooooo misleading!!!

    • OhioHeidi

      Not ONE mention about the level of education the students who finally leave public schools for a real CHANCE they we NOT given while attending public schools!  I bet  the kids come in soooooooooooo behind!!!   And when you work online, you can handle more students.  This article is sooooooooo misleading!!!

    • Connexcindy

      Corruption in our public schools is rampant. Lack of accountability, inability to remove incompetent teachers or worse, self-interested administrators. Promises that aren’t fulfilled; focus on ESL, “bridging the achievement gap” and other low performers or illegal aliens mean less real education for our students. So, we chose k12. Love it! It has improved itself since we our now 10th grader went through in 7th grade. Much more responsive teachers than those reportedly more available in “brick and mortar” classrooms.   Plus recorded sessions (after the live session) to ensure you understand the concept — if only I had that in Geometry.

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