Press Release

California is Overpaying Virtual Charter Schools Hundreds of Millions of Dollars a Year, New Report Shows
Study by University of Oregon Professor and In the Public Interest reveals that Californians are wasting at least $600 million per year on nonclassroom-based charter schools that fail to deliver academically

CONTACT: Jamie Horwitz 202-549-4921 (cell), jhdcpr@starpower.net

As one example, Pearson’s Connections Academy online charter schools charges the state $10,300 per student.
The same product in Pearson’s private school costs $4,800.

SACRAMENTO –A new report released today shows that hundreds of millions of public tax dollars are being wasted every year on California’s online charter schools. Online charter schools also have the dubious distinction of having poorer academic performance than other public schools in the state, despite educating a significantly smaller percentage of non-English language learners and fewer low-income students than the average California public school.

The report, titled Costly Failure: California Is Overpaying for Online Charter Schools That Are Failing Students, focuses on California’s 313 nonclassroom-based charter schools,* which enroll nearly 175,000 students, or an astounding 27 percent of the state’s charter school students. Of these schools, nearly half deliver educational programs primarily online. The research was conducted by University of Oregon Professor Dr. Gordon Lafer for the national nonprofit research and policy center In the Public Interest. 

The findings are significant because California has just entered the second year of a two-year moratorium on authorizing new, nonclassroom-based charter schools. In 2021, legislators must decide whether to lift the moratorium and if so, what conditions to place on existing or new online charter schools.

“One might think that Inspire, Pearson and other companies in this space would have the secret sauce required for successful online learning, combined with economies of scale,” said Clare Crawford, a senior policy advisor with In the Public Interest who is based in San Diego. “They don’t. Our findings suggest quite the opposite. Our research shows that there is a need for more oversight and transparency in the online charter school sector.”

Among the report’s findings:

●      Californians are overpaying for nonclassroom-based charter schools to the tune of more than $600 million per year.

●      Californians pay approximately $10,300 for every student who attends one of Pearson’s Connections Academy online charter schools. Yet the tuition for enrolling in the private Pearson Online Academy is just $4,800 for elementary school students, $5,880 for middle school, and $6,880 for high school.

●      The educational outcomes of online charter schools are significantly below the state average, by every measure.

●      Online charter schools have expanded to the point that in most counties, parents have at least six different online charter schools from which to choose.

“It appears that these companies that either directly or indirectly operate online charters have two prices. The price for the California taxpayer and the price that the private school market and individuals are willing to pay,” said Gordon Lafer, a professor at the University of Oregon and the primary author of the report. “The California taxpayer is being handed a bill at times more than double the private tuition price. This is a taxpayer ripoff.”

Some online charter schools in California and elsewhere have been mired in scandal related to enrollment figures and academic quality in recent years. For example, in 2019, A3, a California online charter school chain, was ordered to close 19 charter schools as a result of a $50 million enrollment scam.  That same year, a complaint by six county superintendents across California led to an ongoing state investigation into fraud at the Inspire charter homeschool network.  In Ohio, the Electronic Classroom of Tomorrow (ECOT), a statewide online charter school, was forced to close when the Ohio Department of Education found that it had grossly inflated the number of students enrolled. ECOT also was noted for having had the highest dropout rate of any school in the United States. In 2020, the Indiana Virtual School and Indiana Virtual Pathways Academy also were cited for fraudulent enrollment figures.

In 2020, an earlier report on California charter schools by In the Public Interest garnered national attention. The report found that some charter schools were receiving PPP loans despite no loss in state revenue and while also accessing federal stimulus funds dedicated for public schools.  Among the print and broadcast stories citing the research was the The New York Times “Charter Schools, Some With Billionaire Benefactors, Tap Coronavirus Relief.”

In the Public Interest is a nonprofit research and policy center that studies public goods and advocates for building popular support for public institutions that work for all of us.

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* Examples of other nonclassroom-based charter schools include programs supporting homeschoolers, independent study offerings and schools that offer a hybrid online/in classroom structure.

 


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