School Choice & Charters Q&A

Too Big to Fail? Why Large Cyber Charter Schools Rarely Get Shut Down

By Arianna Prothero — January 24, 2018 6 min read
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Oversight officials in Ohio have pulled the plug on one of the largest full-time online charter schools in the nation. The recent move sent nearly 12,000 students scrambling for a new school mid-year.

The Electronic Classroom of Tomorrow is looking for ways to reopen as it continues to fight with the state over how it tallies students and, ultimately, how much public money it should get. As Ohio’s department of education has begun collecting on the $80 million it says ECOT owes it for inflating student enrollment numbers, the online charter ran out of money, leading the school’s sponsor to shutter the school late last week.

This is the fourth time in as many months that state oversight officials have taken some kind of disciplinary action against virtual schools—which some research has shown perform markedly worse academically than traditional district schools. Education Week’s reporting and that of other education journalists has shown that the schools are rarely shut down. Many virtual charter schools are run to varying degrees by for-profit companies, the biggest of which are K12 Inc. and Connections Education (although neither contracts with ECOT).

Why are cyber charter schools hardly ever closed down by oversight officials, and is that trend starting to change? I put these questions to Karega Rausch, the vice president of research and evaluation at the National Alliance of Charter School Authorizers, which has been advocating for tougher regulations on cyber charters.

Related: Online Charters Cause Rift Among Supporters of School Choice

Authorizers, also called sponsors, are the agencies or groups designated under state law to approve the opening of charter schools. They are also responsible for closing the schools that are failing to meet the terms of their charter contracts—academically, financially, or otherwise. My conversation with Rausch has been edited for length and clarity.

Q. In New Mexico, education officials there has said it’s not going to renew the contract of the state’s largest online charter school. An authorizer in Indiana said it was not going to renew the contract of that state’s oldest virtual charter school. Is this a sea change or just coincidence? What does this signal?

A. It is our hope that it is a reflection that everyone understands that schools that consistently underserve kids cannot continue to operate in the charter space. It’s a bedrock principle of what public charter schools are about.

We’re certainly hopeful as we look at the states that you mentioned, and I would add South Carolina to that list, and an important note here—these aren’t small virtual schools. These are all schools that have thousands of kids, and authorizers are saying you have underserved kids for a very long time, and we have to do something different. But we are also glad that it appears in all of those instances that authorizers were very careful and very thoughtful and very considerate in making those decisions.

Because when you are faced with the displacement of thousands of students you need to be very mindful of the implications of that and try to do your best to have systems in place so that students can find another—preferably better—option than the one that they came from.

Q. It’s hard to close a school, but what unique challenges does closing a cyber charter school—or any online school—pose?

A. I think from an authorizer’s perspective, the biggest challenge after making the decision to close them is making sure that students have another place to go, and hopefully another high-quality place to go.

But many virtual schools serve such a wide catchment area, typically across a state, that it becomes an additional challenge for the authorizer—how they can work with other schools, other authorizers, and the traditional district sector to make sure students have a high-quality place to go.

So even apart from just the sheer size of virtual schools, perhaps the greater challenge in the lens of an authorizer is thinking about transition planning and who to work with when you have such a wide catchment area of students who are attending the school.

Q. Are authorizers more reluctant to shut down a virtual school because of their size? Do these schools almost become too big to fail?

A. It’s a good question. I’ll say that we haven’t had conversations with authorizers that have been hesitant to close because of the size of the virtual school. There is an additional layer of thinking through that decision, especially in relation to transition planning. Because authorizers are folks that are in this work because they want to make sure kids have access to high-quality options, and we’re talking about thousands of kids and finding a new place for them, that can be a real daunting challenge for an authorizer to face.

Q. When a school is doing really poorly academically, or financially, why can it be so difficult for public officials to take action and shut down the school? In Indiana, as one example, the state school board, in meeting after meeting kept giving an F-rated virtual school another year, and another year, and another year to stay open.

A. I can tell you, I don’t have direct experience with public officials reasoning around challenges that they may have in saying ‘no’ to underperforming virtual schools. I think some of the dynamics are similar to the challenges we have talked about, as it relates to authorizers. When you think about schools that are really large with students that are all across the state, thinking about where those kids go, that’s a significant barrier or issue.

I also think one of the largest challenges that public officials and authorizers have when they make the decision to close any charter school, and virtual schools even more compounded in that sense, is we don’t have enough high-quality schools for kids to go to, period, in any state.

And when you think about parents who have made a choice to enroll their student in a virtual school, there aren’t very many high-quality virtual schools for students to transition into if that’s the mode of education they want. So, folks are in a bind in closing a school and finding better options. I think there is certainly an ethical challenge or tension that folks face.

At the same time, part and parcel of the “charter bargain” is that schools close for underperformance, and we have to stand by that.

I would also be remiss if I didn’t say there are questions around virtual operators and their political influence in statehouses. I would say that is probably one reason, but not the only reason, on why we’ve not seen more progress in addressing severe underperformance.

But I have evidence and have talked to authorizers across the country, and their overriding concern is making sure that kids have a higher-quality option to go to and the challenges associated with making that happen.

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[Correction: The Georgia State Charter Schools Commission is not currently taking corrective action against a virtual school in that state as this story originally reported.]

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