Competing for the Virtual Student

As the for-profit sector gets into the virtual school business, public schools begin to vie for the online student at the same time they find new ways to help them be successful.

• By John K. Waters
• 07/26/11

The Clovis Unified School District (CA) first considered creating a full-time online school about four years ago. Clovis Unified is known as a high-performing district, but it was losing 200 to 400 students a year. In a district with a total enrollment of nearly 38,000, those numbers don't seem so bad, but officials realized only about half of those students were dropouts; the rest were opt-outs.

"What we saw in those statistics was that our students have real alternatives to what our traditional schools have to offer," says Rob Darrow, principal of the district's two-year-old virtual charter school. "Most K-12 school districts know that they're losing kids who are going to other programs to get their needs met, and they know that they're going to have to offer some kind of online program to meet those needs if they're going to survive."

Using the term "survive" seems a bit like hyperbole until you consider some broader statistics: About 45,000 K-12 students in the United States took an online course in 2000; by 2009 that number was more than 3 million. In their book, Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns, authors Clayton Christensen, Curtis W. Johnson, and Michael B. Horn predicted that 50 percent of all high school courses will be delivered online by 2019. Earlier this year market researchers at Ambient Insight published a report predicting that between 2010 and 2015, online learning in the K-12 market will grow at a compound annual rate of 43 percent--warp speed for even the most dynamic industry.

Of course, K-12 districts haven't exactly been sitting on the online-learning sidelines. In fact, says Hall Davidson, director of global learning initiatives at Discovery Education, by pioneering online learning and proving its effectiveness, K-12 districts have unwittingly broadened the market for for-profit schools. 

"It's very clear that online learning has found its time and place," he says, "and it lies at the heart of some serious competition between traditional brick-and-mortar schools and entrepreneurial proprietary schools that are taking advantage of the charter movement. It's just so easy in many states now for an online entity to come in and take enrollment. Here in California, I can enroll my daughter in an online program through a charter school in another county with a few mouse clicks. Some districts realize how heavy the competition is--that there's competition now for attendance dollars that were safer in the past--and some don't. I think the educational community in general needs a Paul Revere to sound the alarm."

Davidson, a former teacher and producer of educational television, sounded that alarm during his presentation ("Build It or They Will Go: Community vs. Enrollment Erosion") for the June 2011 ISTE conference in Philadelphia. He told attendees that districts must recognize "the phenomenon of proprietary innovation," essentially the same kind of disruptive technological change that has rocked newspapers, the photo processing industry, and the music business. They must find a way to "own the online learning and technology space" and "aggressively identify and move forward with the benefits of educational technology." If they don't, he warned, the for-profit schools will, and enrollment erosion will begin a "hollowing-out" of K-12 district pupil populations that will be difficult to reverse.

"Looking at online learning programs as something that provides a competitive advantage makes some people uncomfortable, as though we're being too capitalistic and turning students into customers," says Matthew Wicks, vice president of strategy and organizational development at the International Association for K-12 Online Learning (iNACOL), a Washington, DC-based nonprofit membership association. "I feel that way, too, sometimes. But it has resulted in administrators thinking of ways to better meet student needs."

Wicks is the author of the recently updated edition of A National Primer on K-12 Online Learning, a comprehensive overview of online learning published by iNACOL. (The first edition, published in May 2007, was written by John Watson of the Evergreen Education Group.) Wicks says district-led online programs are currently emerging in three forms: the virtual school, in which students are enrolled full-time and get their entire course of study online; programs that simply offer a few supplemental classes online; and "blended learning," which combines traditional classroom-based learning with online learning assets. 

Currently, most full-time virtual schools are implemented as charter schools, Wicks says, some of which are chartered by individual school districts. And, depending on the policies of the state, those public virtual charter schools are the ones that could be giving local districts a run for their money, or rather, their students.

"When looking at the full-time virtual charter schools, you have to look at individual state policies," Wicks says. "In some states, the chartering authority for the virtual school is not a specific district, but a state chartering authority. In some cases it's the state board of education; in other cases, the state has created a different entity."

These virtual charter schools typically draw students from across the states in which they are established, but enrollment rules vary from region to region, Wicks explains. Chicago Public Schools in Illinois, for example, recently created two virtual charters that are available, by state law, only to students within that district. Massachusetts created its first virtual charter school a year ago, but the state imposes highly restrictive rules on how many students may enroll from other districts, as well as how many students may come from any specific district. Other states--Pennsylvania, for example--have very open laws, and students can move from one district to another by enrolling in that district's virtual charter school. 

"To me, this is a question of choice," Wicks says. "If the district in which a student resides is not offering an option that meets his or her needs, then providing an option for that student to choose a school that does meet his or her needs is a positive thing."

Clovis Unified set up its own full-time, district-supported charter school in 2009. The Clovis Online School is one of only two district virtual charters in the state.  

"In California, there is no funding for part-time online courses for students," Darrow explains. "Those who are offering them are funding them with grant money. When that money runs out, there's no funding stream for the program. We did part-time programs for a while, funding them from 15 different grant programs, but we realized we couldn't sustain what we wanted to offer without a steady funding source. That's when we shifted to a full-time online charter school."

Homegrown Curriculum 

Clovis also took on the challenge of developing its own online curriculum. 

"We decided to build the content ourselves, so that we would own it and not have to pay an ongoing fee," Darrow says. "Our teachers developed the curriculum based on the state standards and the course outlines we use in our school district. So they're getting essentially the same content they would be getting in a face-to-face class. All the teachers are part-time, and all are credentialed in the subject areas they are teaching."

Developing an online curriculum is extremely challenging, admits Kim Clemmons, technology coordinator for the Wilson County Board of Education in Lebanon, TN. But for her district's growing online virtual program, it was well worth the effort. 

"When you're developing something custom made, you really get teacher buy-in," Clemmons says. "We actually pulled four of our cream-of-the-crop teachers from specific subject areas to work with a team of programmers and artists from that state's virtual school program. For an entire year, those teachers stayed at their schools as they worked on the curriculum, enlisting the help--and ultimately winning the support--of other teachers."

In 2006, Wilson County Schools received a three-year grant to participate in pilot testing of the state's first virtual school program, called e4TN (E-learning for Tennessee). That program grew to include all high schools and middle schools in the district, along with outreach to the Upper Cumberland Regional Field Service school districts' students and teachers.  

Many districts provide online learning at some level, Wicks says, thanks in no small part to the proliferation of these kinds of state-sponsored virtual schools.

"If you go back 10 years," Wicks says, "almost all of the virtual school activity was at the state level, with Florida Virtual School being the largest and most famous example. 

"Then, about five or six years ago there was a big virtual land grab," says Matthew Waymack, director of the Gwinnett County Online Campus in Atlanta. Today, roughly 60 percent of the states have their own programs. 

Wicks adds, "Then we saw the beginning of the full-time programs, mainly in charter schools. Now, especially in states that have active state programs, the school districts are becoming aware that they're losing students to these virtual schools."

"The problem with the Florida model," observes Darrow, "is they set up a separate school with separate teachers, and that has an impact on the traditional schools."

The state of Tennessee approached its districts with a different strategy, says Clemmons. 

"They never came in with a cookie-cutter approach that the districts had to follow," she says. "They let us decide how to use the online program: during the school day, after school, or even just in bits and pieces. It made a huge difference; now it's no holds barred!"

The success and growth of state virtual schools has created an easy path into online learning for many K-12 districts, many of which are piecing together programs from multiple service providers, Wicks says. It's common for K-12 districts to dip their toes in the virtual water through third-party online learning-services providers, he says.

Mickey Revenaugh, co-founder of the for-profit Connections Academy, which provides virtual K-12 education in a number of ways, sees the growth of district-run virtual schools as an opportunity for companies like hers.

"It's actually opened up a number of additional ways that companies like ours can serve students," Revenaugh says. "The school districts are waking up to the fact that students and their families are looking for that full range of virtual options, and the districts are deciding that they might as well offer those options directly, rather than losing their students to a charter school, for example, or another district that might be offering a virtual program. In order to do that cost-effectively and in a time horizon that makes sense, they're often contracting with the for-profit providers for selected course content or an entire turnkey solution."

As the Tennessee state program evolved, Wilson County developed its own blended online learning program that combined the Adobe Connect desktop conference solution with a Logitech Orbit camera mounted on teachers' desks.  

"We're urban on one side of our county, but the other side is fairly rural," Clemmons explains. "That's initially why we ventured into these programs. We had that rural high school for which we were just unable to offer classes at the same level and number we needed to equal our other three large high schools. That was the original need; since then it's just grown by leaps and bounds."

A Blended Alternative

Blended learning is, in fact, quickly becoming commonplace in K-12 districts, says Wicks. 

"[It] just makes sense for the school districts, because their students are physically there," he says. "Although there are many districts using charter programs, full-time online programs, and supplemental service providers, blended learning is becoming very, very common."

Researchers at the Innosight Institute have found that, regardless of how attractive the idea of a virtual school is, only about 10 percent of American families have the socio-economic wherewithal to support home schooling; the other 90 percent need some sort of brick-and-mortar facility to accompany online learning. 

"Blended learning is likely to become the norm in K-12 schools," says Heather Clayton Staker, senior research fellow at Innosight. "Keep in mind that schools do more than just deliver academic instruction. They serve a custodial function, provide hot meals, and deliver other social goods. So we think it's unlikely that online learning will emerge purely in a virtual way. And increasingly, we're expecting it to snap into brick-and-mortar environments, so that all those other things schools do get done."

Discovery Education's Davidson believes that blended learning environments are also the most likely to give traditional K-12 districts a competitive edge over for-profit rivals. 

"There's really nothing better than a traditional teacher who knows the students and the curriculum, who can guide the students through the online media options for learning--the 'guide on the side' we've all been looking for," he says. "The data suggest that the blended model is the best in terms of traditional measurement, if you're actually looking at student achievement. It's this combination that will give the districts a competitive advantage over the proprietary schools."

Waymack in Atlanta also argues that there are some things--even in a virtual school program--that only a school district can provide students. 

"We can do things like administer final exams in person, which is something we believe gives us a greater level of credibility," he says. "If you compare, say, our summer school to an on-the-ground summer school in Gwinnett County, the grade distributions are very close--which is what you want to see."

The Gwinnett County Online Campus is the oldest virtual school in the state of Georgia, and one of the oldest in the country. Back in 1998, Gwinnett County began offering a "district-level, supplemental online program" that served a handful of students. Last year the Online Campus had 5,000 students enrolled in for-credit classes. 

Waymack has watched the evolution of K-12 virtual schools for a long time. He believes district-run programs can offer competitive advantages over state programs like Florida's, but he also says districts have learned lessons from the state programs that allow them to compete well with for-profit programs. 

"We've always felt that we do a better job supporting our local students at the district level than any state program is going to be able to," Waymack says. "We have 20 high schools at Gwinnett County, the 12th largest district in the country, and we have a support network built into each of our schools. If a kid at, say, Collins Hill High School, is not doing what he's supposed to be doing, we have a contact person there at the school who will find the student to see what's going on. I'll even go see students sometimes myself if I need to. That's the advantage of a local program. You can't do that with a state program. There's too much area to cover. " 

Revenaugh says, "It's certainly true that the school districts are stepping up to the plate in a much more full-featured way to offer both supplementary and full-time virtual education than we've ever seen before. But the smart ones are not trying to invent everything themselves."

A Competitive Environment

Waymack understands that K-12 districts are operating in an increasingly competitive environment, but he insists his district's program has evolved over more than a decade simply as a means of meeting student needs, not because it's afraid of losing them.

"The students want us, and the district needs us," he says. "In the beginning, it was almost all about remediation. But as the program evolved we began to serve kids that wanted to take things like fine arts, but couldn't because the graduation requirements are such that they almost have to take them outside the normal school day or during the summer. That's a big demographic that we serve. Students needing extra foreign language classes are another one. Over time, we've come to serve a whole segment of our student population that simply wants to do everything online. In the summer, at least half of our students are trying to get ahead; the other half is trying to recover credit."

That's more or less the paradigm that Innosight's Staker sees as the most productive for policy makers looking at K-12 virtual schools. She admits that there's "an element of competition" emerging in the virtual schools space, but thinks it's a mistake to focus on it. 

"I really wish we would reframe the debate," she says. "I don't think parsing the world on the basis of for-profit versus nonprofit versus public school or district school or charter school is the right categorization scheme. It's anachronistic." 

Staker also recognizes what she considers some realities that districts may take on at their peril as they get more involved with online learning.

"I think district leaders will probably be interested in seizing the advantages of online learning, both to deliver high-quality outcomes for their students and just to stay alive as districts," Staker says. "This is a growing trend and in this day and age, with bleak budgets and fiscal shortages, there are some cost advantages that can come from digital learning. But my concern is that, unless the right policy is put in place, we're going to get a lot of low-quality educational content out there, and a lot of districts who find the cheapest solution and put kids in computer labs to stare at monitors for hours on end. And that scares me."

Nevertheless, she believes districts should focus on what they do best, and not be afraid to turn to for-profit providers to fill in the gaps.

"Painting a scary doomsday picture about how [for-profit virtual schools] are going to destroy the lives of districts and teachers is a disservice to students," she adds. "We need to try to find a path that allows online learning to emerge in a way that best serves students. Sometimes that will be through a district offering; sometimes that might be through another provider. The bottom line should be that we're trying to get each student the best educational experience we possibly can."