Lawsuit: K12 Oversold Student Achievement

By Ian Quillen — February 02, 2012 2 min read
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Some virtual education advocates insist that negative press befalling their field is just a consequence of the field crossing from the fringes of K-12 education into the mainstream.

But there are perhaps some cases where negative press could potentially have a concrete impact on any organization’s health, and especially a private company.

For example, the recent New York Times article criticizing virtual school operator K12 Inc. appears to have sparked a class-action lawsuit against the Herndon, Va.-based company.

The suit, filed by a K12 shareholder on Jan. 30, argues that the company’s stock traded at artificially high prices prior to the Times story, because K12 officials misinformed investors about the schools’ academic performance and business practices, which the suit alleges violates securities law. And during the week after the story’s release, from Dec. 12 to Dec. 16, the stock plunged 34.4 percent, though it has since somewhat recovered.

Moreover, the suit alleges, the Times itself uncovered some of that deception, reporting that K12 chief executive officer Ronald J. Packard told investors student performances on standardized tests at Devon, Pa.-based Agora Cyber Charter School exceeded those at other schools. But data showed the school’s performance to actually lag behind the state average in both reading and math, according to the Times.

From the beginning, K12 Inc. has objected, saying the story “is unfair and one-sided, and advances an anti-parent choice policy agenda” in a company statement. It also questioned many of the Times’ conclusions about achievement at Agora, based on the federal measure of adequate yearly progress, or AYP.

The speed and breadth of K12’s response in its statement suggests that, while press pushback may be a symptom of entering the mainstream, virtual education companies see media image as important.

Meanwhile, the Idaho Statesman has questioned Idaho state schools superintendent Tom Luna about the lawsuit, in part because of $44,000 in campaign contributions made by K12 to Luna’s successful re-election bid in 2010. Under Luna, Idaho’s board of education has pushed legislation requiring students to take two high school credits online to graduate.

It’s unclear whether the media firestorm will spread, though I wouldn’t bet against it. However, if things look bad for K12 now, remember back to last summer when education technology solutions company Wireless Generation seemed to be under constant media pressure because of its sale to Rupert Murdoch’s News Corporation Conglomerate.

The residue from that episode has mostly faded now, to the point where Wireless Generation was noted as one of the federal governments key partners in its educational technology efforts during Wednesday’s national town hall meeting for Digital Learning Day.

A version of this news article first appeared in the Digital Education blog.