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Virtual schools in a fight for adequate funding

Virtual school funding gets 'Do Not Pass Go' in Georgia.
Virtual school funding gets 'Do Not Pass Go' in Georgia.

Heart-wrenching decisions made by state bureaucrats that affect the pursuit of a child’s dream might sound like the makings of a Hollywood movie, but for virtual schools in Georgia and elsewhere, these are par for the course.

Two proposed virtual schools in Georgia got the OK to open this fall, but with very limited funding. Their plans are now on hold while they appeal the state’s decision, which supporters of online instruction say was based on politics and not a careful analysis of the costs necessary to operate a high-quality virtual school. What’s more, virtual school advocates say Georgia is not alone in funding virtual schools at a level that is dramatically lower than what traditional schools receive per pupil.

The two Georgia virtual schools, Kaplan Academy of Georgia and Provost Academy Georgia, were approved in June by the Georgia Charter Schools Commission (GCSC), which also decides how much funding each school should receive.

In Georgia, every public school in the state gets funding from two pots—Quality Basic Education (QBE) state funding and local funding from local revenue. Although approved charter and virtual schools still get QBE funding, it’s up to the GCSC to determine local per-pupil funding for these schools.

According to the International Association for K-12 Online Learning (iNACOL), the national average virtual school funding is $6,500 per pupil—significantly less than the average brick-and-mortar school receives per child, which is anywhere between $7,200 and $8,300. These figures are based on data from a 2006 report by Augenblick, Palaich, & Associates (APA), however, so they are likely outdated.

Both Georgia virtual schools were offered the same amount of per-pupil funding: $3,200. The low amount came from the commission’s decision not to grant any local funding to either school.

“We gave them the full amount of state QBE funding,” said Mark Peevy, executive director of the GCSC, “which was $3,200. No, we did not grant local dollars.”

Currently, Georgia has only one virtual-school alternative for elementary and middle school students and their parents, the Georgia Cyber Academy, operated by a separate charter school called the Odyssey School. Georgia Cyber Academy also receives just $3,200 per pupil, but it survives on this amount in part because it receives additional support from the Odyssey School.

Georgia Cyber Academy is currently trying to expand its offerings to ninth-graders next year. Matt Arkin, head of school, said he believes that, if approved, Georgia Cyber Academy would receive about $3,300 in state dollars for each ninth-grade student—a figure that Mike Klein, editor at the Georgia Public Policy Foundation, said is dismal.

In a recent blog post, Klein wrote: “Georgia education headlines are too often made for the wrong reasons. National test scores that disappoint, high schools that under-perform, and the Atlanta public schools cheating scandal do nothing to recommend Georgia as forward thinking and a place to create a business and raise a family. Embracing an aggressive plan to fast forward online education would seem like a no-brainer.”

Decision based on politics, not data

According to the Georgia Families for Public Virtual Education (GFPVE), $3,200 per pupil never should have happened, legally: In 2008, Georgia passed a law requiring the GCSC to provide fair and equitable funding for online public charter schools.

“The typical student in Georgia received over $8,000, yet virtual charter schools receive around $3,500—among the lowest of any state,” said GFPVE.

“We have complete discretion on the funding level,” countered Peevy. “This is not illegal.”

He added: “Virtual education is on what we call the bleeding edge in Georgia, and it’s always tough to decide how we should fund virtual education. We’re at the starting point of that discussion.”

When GFPVE asked to see the documents showing how the GCSC reached its decision on local virtual-school funding, the commission’s response raised even more questions.

“It is unclear how the commission concluded that a quality, full-time virtual charter school can operate at or less than $3,300 per student—and what, if any, research or analysis was done to arrive at that low amount,” said Susan Patrick, president and CEO of iNACOL. “… Upon a public information request, a single spreadsheet that appeared to be based on no data—just guesses—showed a lack of research and data by the decision makers, and bad policy was set for inequitable funding.”

Doug Rosenbloom, an attorney for GFPVE, believes the lack of evidence supporting the commission’s decision was a result of state politics, not just ignorance.

“Virtual school funding is a hot issue in our state, and to be blunt, the decision not to adequately fund these schools came from the governor’s office,” said Rosenbloom.

In response to a request for comment, the office of Georgia Gov. Sonny Perdue issued the following statement:

“Governor Perdue has been and continues to be very supportive of virtual schools as an additional option for parents and students. However, the funding model for virtual schools is much different than traditional bricks-and-mortar charter schools. Technology expenses, for example, may be higher, while building construction and maintenance costs are not needed. In these times of diminished state revenues, the governor is supportive of the state portion of the funding formula going to virtual schools for each student.”

According to Rosenbloom, the idea of spending already tight funds on virtual schools is a daunting idea for the state. Funding virtual schools also would put a strain on local taxpayers, as children previously home-schooled now would have the option of online instruction—meaning more students and more funds.

Another issue, said Klein, is that “brick-and-mortar schools must wait for the Georgia Supreme Court to decide whether local education dollars should follow a pupil who leaves traditional school for a charter.”

Several school systems, including Atlanta, sued this year to prevent local dollars from following the student. They lost, so they appealed to the state Supreme Court. A decision is expected later this fall or early next year.

“Currently, the Georgia Supreme Court is hearing a case challenging the constitutionality of the law creating the Charter Schools Commission—a law Governor Perdue signed,” the governor’s statement continued. “Our hope is that once the case is completed, the state can develop a funding model for virtual charter schools that recognizes their unique cost structure and allows even more families to choose this option for their students.”

Georgia isn’t alone

One of the major challenges to analyzing virtual school funding is that not a lot of research is available that compares how much states fund brick-and-mortar schools with how much they spend on virtual schools. Such comparisons are hard, because each state can choose to fund virtual schools based on different models of school funding.

However, according to the APA report, virtual school funding should be comparable to what brick-and-mortar schools receive.

Based on its 2006 report, the national average spent per pupil on brick-and-mortar schools is $7,727—a far cry from Georgia’s $3,200, and still much more than iNACOL’s estimated national average of per-pupil spending for online schools: $6,500.

Yet, some states are closer to understanding what it takes to fund virtual schools than others. According to a Georgia Cyber Academy analysis, full-time online school charter funding—though it fluctuates widely nationally—is typically higher than $3,200.

For example, Pennsylvania has paid up to $8,100 per student, and Arizona, Arkansas, California, Colorado, Hawaii, Nevada, Ohio, Oregon, Texas, Utah, and Wisconsin provide between $5,000 and $7,500 per pupil. South Carolina is on the low end, at about $3,300 per pupil.

“The most significant expenses for virtual schools are people—teachers’ salaries and benefits, [and] administrative personnel such as principals, chief information officers, counselors, registration, and staff,” said Patrick. “Virtual schools require significant professional development budgets, as teachers need to attain a new set of strategies and pedagogical skills for the online learning environment. And while there may be some savings in the costs of space and transportation, this is offset by much higher technology expenses—from hardware, software, and infrastructure costs, such as course development and refresh, to licensing fees for the learning management system, data systems, technical support, [and] providing students with computers and/or internet access.”

If online instruction still carries a stigma among state leaders in Georgia or elsewhere, Patrick said, it’s not reflected in the fast growth of online learners across the United States.

“More than 40 percent of high school students want to take an online course. There are currently more than 200,000 students enrolled in full-time public virtual schools in 25 states, and the numbers are rising as the demand from parents and students grows every year,” she said.

According to Patrick, the U.S. has experienced a 30-percent growth in online learning over the past 10 years, with millions of students also taking online courses. In college, one in four students takes an online course.

“The problem is not whether online [instruction] works—we know that it does,” she said. “The problem is that the Georgia Charter School Commission made a decision without looking at the data that show actual costs, and they made incorrect assumptions. There may be some cost savings, as was found in Wisconsin, when virtual schools are brought to scale by eliminating artificial enrollment caps.” But policy makers too often underestimate the costs necessary to operate a high-quality virtual school, she added.

Amid criticism from supporters of online instruction, the GCSC has agreed to revisit its funding strategies for virtual schools.

According to Rosenbloom, the commission has agreed to assign three of its members, as well as some budget personnel from the state education department, to look into the matter further. “Hopefully, we’ll see a resolution soon,” he said.

The two schools, Kaplan and Provost, are awaiting a decision on whether their funding will be revised—a decision that should take place by December, said Rosenbloom. GFPVE has not yet decided to file a lawsuit against the commission.

“We are committed to virtual education,” said Peevy. “We recognize that this is a work in progress, and [we] realize virtual education is a key piece to what we offer students in Georgia.”

“On one level, this is about funding,” said Klein. “On another level, the substantial question is whether Georgia is ready to embrace innovative education platforms that supplement traditional classrooms. If so, Georgia becomes a national leader. If not, Georgia becomes a national laggard.”


Georgia Families for Public Virtual Education

Georgia Charter Schools Commission

APA report, “Costs and Funding of Virtual Schools” (PDF)


Mike Klein

Note to readers:

Don’t forget to visit the Online Learning: One Pathway to Success resource center. A growing number of K-12 school systems are discovering the power of online learning to transform education as we know it, opening up nearly limitless possibilities for their students. Go to:

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