From The Perimeter Primate's Charter School Scandals:
Faruqi & Faruqi, LLP Announces Investigation of K12, Inc.
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) according to various academic benchmarks, K12 students were chronically underperforming their peers at traditional schools; (2) K12 has aggressively recruited students to their schools, regardless of how well-suited they might be for the Company’s curriculum; (3) as a result of K12’s haphazard recruiting process, the Company experiences student retention problems resulting in high rates of withdrawal; (4) K12 schools often have far larger student-to-teacher ratios than the Company advertises; and (5) K12 teachers have been pressured to allow students to pass regardless of academic performance, in order to receive federal funds.
On December 12, 2011, after several months of research, the New York Times published an article entitled “Profits and Questions at Online Charter Schools.” The article raised serious concerns about K12’s business practices, alleging that Company schools inflate their student rosters, are underperforming academically, have detrimental student-to-teacher ratios and gain wrongful access to public funds. On this devastating news, K12 shares collapsed almost 24%, closing at $22 per share on December 13.
K12 Inc manages a charter school called Agora Cyber Charter. The NYT had an article in December about the problems at this school.
By almost every educational measure, the Agora Cyber Charter School is failing.
By almost every educational measure, the Agora Cyber Charter School is failing. Nearly 60 percent of its students are behind grade level in math. Nearly 50 percent trail in reading. A third do not graduate on time. And hundreds of children, from kindergartners to seniors, withdraw within months after they enroll.
By Wall Street standards, though, Agora is a remarkable success that has helped enrich K12 Inc., the publicly traded company that manages the school. And the entire enterprise is paid for by taxpayers.
"And the entire enterprise is paid for by taxpayers."
That's really nice for K12 Inc.
K12 was founded by Bill Bennett. He once publicly stated that he wanted public schools to fail. From Daily Kos 2005
Bill Bennett - Worse than you could imagine+
Reed Hundt was Chairman of the Federal Communications Commission between 1993-97. During that time he was seeking legislation to implement a strategy to place computers and internet access in classrooms and libraries around the country. A good idea, no?
A provision was put in the Telecommunications Act of 1996 to accomplish just that. Mr. Hundt called on Bill Bennett, who had been Secretary of Education, to help support the bill when Republican allies were needed for its passage through Congress. Silly Mr. Hundt. He thought that a Secretary of Education might actually support education. So what did Mr. Bennett, that moral philosopher of virtue, tell Mr. Hundt? According to Hundt:
He told me he would not help, because he did not want public schools to obtain new funding, new capability, new tools for success. He wanted them, he said, to fail so that they could be replaced with vouchers,charter schools, religious schools, and other forms of private education.
And a little more about Bennett and why he was forced to leave K12...from the Daily Kos 2005 diary:
K12 was started by Republican operative and former Sec. of Education William Bennett but the company was forced to remove Bennett as chairman of its directors following a series of racist remarks and gambling scandals which threatened the company's marketability. K12 Inc. has been under investigation by the Government Accountability Office (GAO), the investigative arm of Congress, which has been looking into K12's involvement in a project that received an improper multimillion-dollar grant from the Department of Education during Bennett's tenure at the firm. Meanwhile, during some of his television appearances, Bennett has continued to comment on administration education policy and the No Child Left Behind Act without mentioning the grant..
I have said frequently that accountability has for a while been required only for public school teachers and public schools. Alternative schools have often escaped scrutiny.
I hope I will be proven wrong on this issue.