Understanding the weak overall performance of K12 Inc. virtual schools

Gary Miron's and Jessica L. Urschel's A Study of Student Characteristics, School Finance, and School Performance in Schools Operated by K12 Inc. [PDF], from the school of education at the University of Colorado Boulder, is a substantial and critical study of K12 Inc., the largest private provider of virtual schooling in the US. Education Week reports that the value of K12's stock fell by over 30% within three days of publication.

The study is broad in its focus. Here are three "stand out" findings: 

Only 27.7% of K12 schools reported meeting Adequate Yearly Progress (AYP) in 2010-11, as compared to an estimate of 52% of public schools overall. (The study describes AYP as "a relatively crude indicator of whether or not schools are meeting state standards".)

In maths, K12 students score, on average, between 14 and 36 percentage points lower than students in their host states, with the gap increasing dramatically for students in higher grades.

Across grades 3-11, the K12 schools’ scores were between two and 11 percentage points below the state average in reading.

The report's headline recommendations for policy-makers are as follows.

1. Based on the findings, the following policy recommendations are offered for states or other appropriate policymaking entities: Slow or put a moratorium on the growth of full-time virtual schools. In the area of full-time virtual education, states should place their first priority on understanding why the performance of virtual schools suffers and how it can be improved before undertaking any measures or programs to expand this new model of schooling.
2. Revise performance accountability measures for virtual schools. Since some performance measures commonly used for public schools are inadequate or inappropriate for full-time virtual schools, more suitable measures should be devised, implemented and, over time, improved. Part of the solution may involve alternative or supplemental measures, including measures of market accountability.
3. Revise funding formula and financial oversight. Funding formulas for virtual schools should reflect the actual costs of educating students in those schools, rather than the typical costs for educating students in traditional public schools. Given the high mobility of students in K12’s virtual schools, the practice of allocating funding for students who enrol should shift to funding based on the number of students who satisfactorily complete courses. This model is already in practice at the Florida Virtual School. More transparency is needed to understand how full-time virtual schools spend public funds.

K12's response to the report concludes "The report is really just a political assault by a well-known interest group that has an anti-charter and anti-choice agenda". The full K12 response is here.