Charter backer Whitney Tilson, however, is 'shorting' K12 stock as troubles mount... Thanks to Diane Ravitch for this hoot of a story... Idaho 'virtual' charter school has outsourced its essay scoring to India

With the Chicago Board of Education poised to run sloppily through another round of charter school expansion at the cost of the city's real public schools (this year it's because we need -- only charters mind you, to "relieve overcrowding" -- it's nice to know that the massive corruptions that characterize charter schools across the USA and in Chicago continues to find new ways to amuse, edify -- but almost never to educate. This week, it's the revelation, first published October 8, 2013 by Diane Ravitch, that one "virtual" charter school has "outsourced" its essay grading -- to India!

The shrine of Shiv Mandir in Bangalore India.It's like those phone calls you get... "Good morning, this is Kayvann, my I speak to Mr. Schmidt?" "What did you say your name was?" "Kayvann, sir... Are you Mr. Schmidt?" "How do you spell that?" "What, sir?" "Kayvann, Kayvann...." "Why Kevin, Sir..." etc.

Recent news reports note that the suicide rate for workers at call centers in Bangalore, where K12 has given its essay scoring business, has increased. Further research is necessary to learn whether one reason is that recent surge in the inability of American children to properly align the apostrophe, or whether something as basic as punctuating a sentence is to blame. As American teachers have learned over the years, it takes great patience to get all the little ones to utilize a full top (like a period or question mark) at the end of what is supposed to be an English sentence, and at times the notion that a student has to capitalize the first letter in EVERY English sentence has been declared passe by a younger generation.



The Idaho Virtual Charter Academy outsourced the scoring of student essays to India, according to local reports. The company involved, K12, has been criticized for its business practices and its poor academic results; its bottom line is cost-cutting, not academic quality. Its virtual schools typically have high student turnover, low test scores, and low graduation rates, yet the corporation is profitable because it continues to lure students with a promise of a "customized," "individualized," "personalized" education.

One of the most important responsibilities of teachers is to give tests and grade them, to know what their students know and don't know, and to help students who need extra help. Having the essays scored in India removes that function from teachers and places it in the hands of readers who may not understand American idioms or cultural references.

Investor Whitney Tilson recently announced that he would sell the stock of K12 short. This education company is listed on the New York Stock Exchange and makes handsome profits, despite its poor academic results.

One of the big investors in K12 is the billionaire Albertson family of Idaho, whose foundation has been placing advertising across the state disparaging public education and touting the virtues of charter schools and virtual schools.

Terry Ryan of the conservative Thomas B. Fordham Institute recently moved to Idaho to lead the battle for charters. Ryan supports both charters and vouchers.

According to a story in an Idaho paper:

Ryan also is excited about his seat on the nine-member Rural Opportunities Consortium of Idaho. The group of national experts will focus on the unique issues and challenges of rural schools in Idaho. ROCI is sponsored by the J.A. and Kathryn Albertson Foundation.

�Albertson�s� vision is very compelling,� Ryan said. �I couldn�t pass up the opportunity to help make Idaho a leader and a model in education.�

Ryan is a nice, amiable guy whom I knew when I was on the board of the Thomas B. Fordham Institute. Ohio, where Terry Ryan worked on behalf of charters for many years, has some of the worst charters in the nation. The biggest charter chain in Ohio is White Hat, which has made its owner very rich. The charter founder, a non-educator, is a major contributor to Republican candidates. His schools are never held accountable for poor performance. They fail and fail, and get more money. Currently, ten of the boards of his White Hat charters are suing the company to try to get information about how the money is spent. The owner takes 96% of public dollars and says how he spends it is proprietary information and not available for public scrutiny, not even to the board members of his charters.

Idaho, beware of the privatization movement. In a matter of years, you will have no public schools, just charter schools, vouchers, and virtual charters.


Online charter outsourced student essays, Written by Travis Manning on Oct 5th, 2013. | Copyright �

Idaho�s largest virtual charter school, with approximately 3,500 students, has outsourced student essays to India for review in the grading process.

The revelation that K12 Inc., the world�s largest online charter school provider, sent thousands of student essays overseas was revealed back in 2008 by Arizona blogger David Safier.[i] But it wasn�t until September 2013 that K12 verified at least one Idaho charter school was also involved.

After being pressed, K12 admitted that Idaho Virtual Academy (IDVA), Idaho�s largest virtual school and operated by K12 Inc., had outsourced student essays.

�This was a pilot program offered by K12 to give teachers additional support,� said K12 spokesperson Jeff Kwitowski in an email. �Reviewers provided initial feedback, but teachers assigned grades. Teachers could use the service at their discretion. It was used by some schools, including IDVA, until the pilot was discontinued.�[ii]

Records I have obtained indicate that between August and December 2007 IDVA outsourced over 3,000 essays to India.[iii] A Sept. 10, 2008, Education Week article reveals K12 eventually settled into a business relationship with TutorVista, a tutoring service in Bangalore, India.[iv] In so doing, IDVA may have violated the Family Educational Rights and Privacy Act (FERPA) which protects student work and private information.[v]

K12�s �pilot� project highlights an important issue within for-profit charter schools: adequate oversight. Private companies like K12 are not subject to open meetings laws or public records requests.[vi]

Ironically, K12�s website claims, �We must foster a culture of professionalism, service, transparency, accountability�.�[vii] Difficult to hold a company�s board of directors, CEO�s and shareholders to this standard when their business practices, products and services are considered �proprietary.�[viii] There is no reason to believe the �pilot� project would have ever been discontinued had an investigator not unearthed the practice and dragged it into the sunlight of parental scrutiny.[ix] The IRS is also investigating.[x]

There�s more. IDVA�s 2013 Annual Update also reveals that, �There appears to be potential for conflicts of interest to result from IDVA�s administration and management staff being K12 employees.�[xi] And, in a 2012 study by Western Michigan University, 27% of K12�s schools in 2010-11 reported making adequately yearly progress, compared to 52% for brick-and-mortar schools.[xii] Perhaps K12, which donated 44K to Superintendent Tom Luna�s 2010 campaign,[xiii] shouldn�t also get transportation costs for �bring(ing) the school to the children.�[xiv]

Kase Capital hedge fund manager Whitney Tilson, also co-founder of Democrats for Education Reform, eviscerates K12�s business practices. Tilson reminds us that online schools are good for children who need flexible schedules, or who have highly involved parents, but they are not for everyone. He exposes K12�s aggressive recruiting tactics to enroll at-risk and special education students, often from poor, single-parent households where the parent has little time to be the requisite �parent coach.�[xv]

Jeff Shaw, former Head of School of K-12-run Ohio Virtual Academy told Tilson, �After the IPO, I got discouraged because the company�s priority seemed to shift from academics to growth�. Eventually, it seemed as though K12�s enrollment strategy was to cast a wide net into the sea of school choice and keep whatever they caught regardless if the catch was appropriate for virtual learning or not.�[xvi]

One former English teacher from Pennsylvania�s Agora Cyber Charter School (2010-12) said of K12, �There was no teacher-to-student ratio. When I started, I was assigned 300 students, which was very, very overwhelming. I would try to read each of the essays students turned in � but I was really struggling with that. I couldn�t keep up. I was told to skim over the papers and grade with a rubric.�[xvii]

K12 CEO Ron Packard says, �It�s just K12�s culture.�[xviii]

1 Safier, David. (2012, February 20). �Setting the record straight about K12 Inc. outsourcing student essays to India.� BlogforArizona. Retrieved from

[ii] Kwitkowski, Jeff. (2013, September 20). Personal email.

[iii] Private K12 documents.

[iv] Trotter, Andrew. (2008, September 10). �K12 Inc. Scraps India Outsourcing.� Education Week. Retrieved from

[v] U.S. Department of Education. (2013, September 27). �Family Education Rights and Privacy Act (FERPA).� Ed.Gov. Retrieved from

[vi] Idaho Public Television. �Open Idaho.� Retrieved from

[vii] Davis, Nate. (2013, March 4). �An Open Letter from Nate Davis, Executive Chairman, K12 Inc.� Retrieved from

[viii] Parker, Christina L & Jeff Kwitowski. (2013, August 29). �News Release: K12 Inc. Reports Full Fiscal Year 2013 Results.� Retrieved from

[ix] Safier, David. (2008, August 7). �AZ Online Charter School Outsources Education.� BlogforArizona. Retrieved from

[x] Hall, Eric & H. Mahaffey. (2012, June 18). �Increased Scrutiny of Charter Schools Operated by For-Profit Management Companies.� Lewis Roca RothGerber Law. Retrieved from

[xi] Idaho Public Charter School Commission. (2013, April 11). �IDVA Annual Update.� Retrieved from

[xii] Miron, Gary & Jessica L. Urschel. (2012, July). �A Study of Student Characteristics, School Finance and School Performance in Schools Operated by K12 Inc.� National Education Policy Center. Retrieved from

[xiii] Popkey, Dan. (2012, February 2). �Luna�s friend, K12 CEO Ron Packard, faces class-action suit alleging misstatesments on student performance.� Idaho Statesman Blogs. Retrieved from

[xiv] Woodard, Colin. (2012, September 2). �Virtual Schools Have Questionable Records.� Morning Sentinel. Retrieved from

[xv] Tilson, Whitney. (2013, September 22). �An Analysis of K12 and Why It Is My Largest Short Position.� Seeking Alpha. Retrieved from

[xvi] ibid

[xvii] ibid

[xviii] Tilson, Whitney. (2013, September 17). Powerpoint, slide number 27. Presentation given at 9th Annual Spring Value Investing Congress. Retrieved from