School Choice & Charters

F-Rated Cyber Charter Loses Renewal Bid, But That Doesn’t Mean It Will Close

By Arianna Prothero — December 21, 2017 4 min read
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New Mexico education officials have decided not to renew the contract of the state’s largest full-time online charter school.

The Public Education Commission, which authorizes—or oversees—charter schools in the state, cited poor academic performance and academic growth as the reason why it won’t renew the online charter’s contract, according to the Associated Press.

The school, New Mexico Connections Academy, which contracts with a national for-profit operator, earned an F grade from the state in 2017. The number of students testing proficient in math had bottomed out at 11 percent.

The disappointing academics, as well as issues relating to oversight, funding, and financial transparency, are not limited to New Mexico Connections Academy, according to a legislative report released on the heels of the nonrenewal decision.

Put together by two nonpartisan legislative committees for state lawmakers, the report found that the state’s three virtual schools have “struggled to provide acceptable outcomes, demonstrate fiscal responsibility, and comply with state law.”

This Doesn’t Mean Online Charter Schools Will Close

But the Public Education Commission’s nonrenewal decision doesn’t necessarily mean that the 1,350-student school will close. New Mexico Connections Academy, which contracts with Connections Education, one of two national virtual school companies, can appeal the non-renewal to the state’s education secretary. It could also switch to another oversight group, or authorizer, if it can find a local school district to sponsor it.

Both moves are common for struggling cyber charters nationwide. Shrinking rural school districts, in particular, are often eager to assume oversight of a virtual school because it brings thousands of new students—and dollars—into the district.

For these reasons, as well as aggressive lobbying practices on behalf of cyber school companies, it’s rare for virtual charter schools to close, as we found in a 2016 Education Week investigation.

Poor Outcomes and Financial Transparency in Cyber Charters, Report Finds

The New Mexico legislative report raised the issue that local school districts could be easily persuaded to take on struggling cyber charters to increase revenue.

It also found that virtual school students in the state performed on average worse in reading and math and had less academic growth than their peers in traditional, brick-and-mortar schools. That’s even though virtual schools serve fewer students who are learning English, have disabilities, or are from low-income families.

Additionally, the report raised concerns over whether the companies that the three cyber charters contract with, Connections Education and K12 Inc., play too large of a role in operating the schools. Although public schools can contract with for-profit providers for some services such as curriculum, state law bans companies from making staffing decisions or running schools entirely.

Finally, the report said there was a concerning lack of financial transparency in the schools. For example, monthly invoices from the operating companies to the schools at times surpassed six figures but lacked detail on the services they were charging schools for.

The report concluded that “overfunding and open-ended contracts allow virtual charter schools to send large amounts of money to for-profit companies with limited transparency.” (When reached for comment, Connections Education said it was still reviewing the report, and that it takes any analysis of virtual schools seriously.)

Among the recommendations the report made to state legislators:

  • Allow only the Public Education Commission to authorize virtual schools that plan to serve students statewide;
  • Place caps on the number of students a virtual school can enroll;
  • Develop either an “expedited” school closure process or ban cyber charters from operating as full-time, open-enrollment schools;
  • Devise a new funding formula for virtual schools that take into account lower staff, building, and transportation costs (virtual schools in the state are funded the same way as traditional schools with buildings, buses, and far lower teacher-to-student ratios).

Many of these same issues have cropped up with virtual schools across the country, as Ed Week detailed in its 2016 investigation. As part of that work, we compiled reports of trouble in cyber charters from local media outlets, state agencies, and researchers over the past decade into an interactive map, which you can explore here. The map is updated through 2017.

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CLARIFICATION: This post has been updated to clarify that Connections Education does not directly run New Mexico Connections Academy. The company contracts with the online school to provide services.

A version of this news article first appeared in the Charters & Choice blog.