On Virtual Charter Schools: Research, Legislation, Policies, and Litigation

Last week the state of North Carolina expanded the use virtual education within the state.  The State Board of Education approved its first fulltime degree granting virtual charter schools – Two virtual charter school were approved; North Carolina Virtual Academy which is affiliated with K12, Inc., and North Carolina Connections Academy.  North Carolina is not new to virtual schooling; the current virtual instruction is supplementary and non-degree granting.   The expansion does not comes as a surprise considering that in April 2014, the North Carolina Assembly received a virtual charter school study to assist in making the determination whether to expand the state’s virtual charter school policy.  North Carolina is not the only state that has action related to virtual charter schools.  Over the past year, I have been following the world of virtual charter schools and there has been a great deal of activity including litigation and legislation.  Below I will provide an overview of some of the activity.  

NCAA 

In April 2014, the NCAA announced that it will no longer accept coursework from 24 virtual charter schools.  All 24 schools are affiliated with K12, Inc., a large for-profit provider of online learning.  The NCAA provided notice that other schools managed by K12, Inc. will continue to have coursework under extensive evaluation.  The NCAA’s action will have a significant impact of the decisions of student athletes to use virtual schooling as a means of obtaining additional credits, credit recovery, or supplementary courses.  

ILLINOIS

In May 2013, Illinois state legislators passed a law requiring a one year moratorium on new online virtual charter schools within the state.[i]  The law also required that the Illinois Charter School Commission submit a report with recommendations regarding virtual charter schools.  The Commission issued a report in February 2014 that recommended significant modifications to the Illinois law and administrative rules.  Furthermore, the commission recommended an extension on the moratorium through 2016 or until new guidance is in place, whichever is sooner, to allow for the development of guidelines.   In August 2014, Illinois House Bill 3937 was enacted extending the moratorium until December 31, 2016.[ii]

MAINE

During the 2014-2015 school year, the State of Maine opened their first virtual charter school.  The Maine Connections Academy’s opening did not approach without controversy.  Tensions were raised as local school districts received tuition bills from the virtual school.  Local school officials argued for changes in the way virtual schools are funded.  As it stands, Maine’s law requires that the local school districts, where the virtual school student resides, forward the per-pupil allocation to the public charter school.[iii]

MINNESOTA

In September 2014, Minnesota district court dismissed a case involving causes of action brought under the False Claims Act (FCA) and the Minnesota False Claims Act (MFCA).  In United States of America, et al. v. Minnesota Transitions Charter Schools [iv] Plaintiffs brought actions on behalf of the United States and the State of Minnesota alleged that the Defendants, Minnesota Transition Charter School and MN Virtual High School, knowingly submitted false documents and records to “receive and seek funding in which it was not entitled from the United States and the State of Minnesota."[v]  Specifically, the Plaintiffs alleged that the Defendants dropped truant students from the “enrollment for non-attendance shortly before state testing to prevent them from negatively impacting test results.”[vi]  After the testing, the Defendants reenrolled the truant students.  The compliant further alleged that the Defendants submitted fraudulent information on IEPs, requiring all student IEPs to have one hour of direct and one hour of indirect student contact a week regardless of the time that was actually spent.[vii]  The case was dismissed for various reasons. 

NEW MEXICO

In April 2014, the New Mexico Attorney General, Gary King, issued an opinion stating that the New Mexico Virtual Academy in Farmington, NM was violating state law.  The New Mexico Virtual Academy is a public charter school that has an agreement with K12, Inc., as their provider of virtual learning.  The New Mexico Schools Act prohibits a for-profit entity from operating a charter school.  The Act states that “a charter school is a public school that may contract with a school district or other party for provision of financial management, food services, transportation, facilities, education-related services or other services.  The governing body shall not contract with a for-profit entity for the management of the charter school.”[viii]  K12, Inc., is a for-profit entity. 

             

OHIO

In November 2013, the Virtual Community School of Ohio (VCSO) made history when it entered into a resolution agreement with the United States Department of Education, Office of Civil Rights (OCR).  OCR found Section 504 and Title II violations and the school agreed to address the issues as a part of an agreement.  The resolution agreement requires VCSO to make several corrective actions.  

TENNESSEE

In Tennessee, a virtual school might be closing after the 2014-2015 school year.  In July 2014, Tennessee Education Commissioner, Kevin Huffman, with statutory authority, announced that the Tennessee Virtual Academy would close at the end of the 2014-2015 school year due to academic performance.  In order to prevent the closure, the Tennessee Virtual Academy test scores must show drastic gains.   The relevant test scores will not be available until June 2015, therefore the schools fate is still up in the air.  The leaders of the Tennessee Virtual Academy have put measures in place to attempt to improve scores, including a new mentor program.

VIRGINIA

In 2014, the State of Virginia enacted two new bills that impact virtual charter schools within the state.  Virginia House Bill 1086 requires local school boards to provide free and appropriate special education to students with disabilities that attend full-time virtual school.[ix]  The local school board, where the student resides, is released from the obligation of providing special education to the student attending fulltime virtual schools.  The residing school board should transfer the state and federal funds to the virtual school local school board.[x]  Virginia House Bill 1115 permits the Virginia Department of Education to contract with one or more local school boards that have created online courses to establish the Virtual Virginia program.  The Virtual Virginia program will allow courses to be available to all students throughout the State of Virginia. 

Oklahoma Firefighters Pension & Retirement System v. K12, Inc. et al [xi] is a securities class action pending in Virginia.  The class action was brought on the behalf of investors against K12, Inc.  The class action was filed only six months after another investors’ class action was settled.[xii]  The pending class action alleges that K12, Inc. violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, more specifically that K12, Inc.’s omission and misstatements regarding student enrollment and growth prospects for fiscal year 2014, “caused  a staggering 38.4% drop in the price of K12 common stock and significant investor losses on the last day of the ClassPeriod.”  This case is still pending. 

RESEARCH

Although there is limited empirical research related to virtual charter schools, in 2014, several studies were released.   In March 2014, The National Education Policy Center (NEPC) issued a report regarding virtual schools.  The report pointed out numerous concerns and made various recommendations.  The NEPC report sparked a response from employees of K12, Inc., stating that the NEPC report had many inadequacies and many of their recommendations were already in place.  In March 2014, the Center on Online Learning and Students with Disabilities with the findings of a 2013 survey of state special education directors. The Online Center concluded its report indicated that even though state policies related to virtual schooling are fairly new, “the survey findings highlight the diverse knowledge base, beliefs, levels of policy development and data collection around online learning across the states.”  In September 2014, Harvard's Program on Education Policy and Governance (PEPG) released on study pointing out the positives of virtual charter schools.  The National Education Policy Center did a review of the PEPG study.

As support for school choice continues, and the number of students attending virtual schools continue to grow, it is important that education professionals, no matter if they support or oppose virtual schools, be aware of the news, research, legislation, policies and litigation related to virtual schools.  It is very important to keep abreast of these actions to have the knowledge base necessary to help inform policy, make decisions, and plan for the future implications of virtual schooling.  This article only provides limited details and an overview of some to this past year’s actions.  There continues to be a push for virtual schooling and states are attempting to put laws and policies in place to create, monitor, and regulate virtual schools.  Although empirical research related to virtual charter schools is scarce, there appears to be researchers who have taken an interest in the further development of this research area. Virtual schooling is fairly new, therefore only time will tell us the true impact this movement. 

by Tiffany Puckett

Tiffany Puckett is the Associate Director of the Forum on the Future of Public Education. She is a Ph.D. student in Education Policy, Organization and Leadership at the University of Illinois at Urbana-Champaign. She is interested in education law, school finance, policy development, implementation and compliance.

The Forum on the Future of Public Education strives to bring the best empirical evidence to policymakers and the public. The Forum draws on a network of premier scholars to create, interpret, and disseminate credible information on key questions facing P-20 education.

References

[i]           H.B. 3937, 98^th Gen. Assem., Reg. Sess. (IL. 2014).

[ii]          Public Act 98-0016, 105 ILCS 5/27A-5.

[iii]         Me. Rev. Stat. Ann. tit 20-A, Chapter  112

[iv]         United States of America, et al. v. Minnesota Transitions Charter Schools, 2014 U.S. Dist. Lexis 137164 (D. Minn. 2014).  

[v]          Id at 2.

[vi]         Id. at 4.

[vii]        Id. 

[viii]       NMSA 1978, § 22-8B-4.

[ix]         H.B. 1086,  Gen. Assem., Reg. Sess. (VA. 2014).

[x]          H.B. 1114,  Gen. Assem., Reg. Sess. (VA. 2014).

[xi]         Oklahoma Firefighters Pension & Retirement System v. K12, Inc. et al, 2014cv00108 (ED. Va. 2014) 

[xii]         On July 25, 2013, the United States District Court for the Eastern District of Virginia, Alexandra Division approved a settlement in the class action, David Hoppaugh, Individually and On Behalf of all Others Similarly Situated v. K12 Inc., Ronald J. Packard and Harry T. Hawks, 1:12-cv-00103-CMH-IDD.