|Type||Publicly held, NYSE: LRN|
|Founder(s)||Ronald J. Packard|
|Products||education software, textbooks, workbooks|
|Revenue||$522.4 million (as of June 2011)|
|Operating income||$24.2 million (as of June 2011)|
|Total equity||$448.6 million (as of June 2011)|
|Employees||2,500 (as of June 2011)|
|Website||K12 Inc. Home Page|
K12 Inc. is a for-profit education company that sells online schooling and curriculum to state and local governments. Its educational products and services are designed as alternatives to traditional "bricks and mortar" education for public school students from kindergarten to 12th grade. K12 is a publicly traded education management organization (EMO) that provides online education services to charter school students. It is paid for from taxes. K12 is the largest EMO in terms of enrollment.
The company was founded in April 2000 by former banker Ronald J. Packard. Initial investors in the company included Michael R. Milken and Lowell Milken of education company Knowledge Universe, who along with the Milken Family Foundation, invested $10 million. Andrew Tisch of the Loews Corporation and Larry Ellison of Oracle Corporation also contributed venture capital.
William Bennett, Secretary of Education under Ronald Reagan was hired as the company's first chairman of the board, resigning in 2005 after some controversial comments. Lowell Milken served on the K12 board of directors until July 2007. Tisch currently serves as chairman of the board and Packard has served as CEO since the company's founding.
K12’s product line includes courses for elementary, middle, and high school grades, online learning platforms and educational software. The curriculum is distributed through various channels, including online public and private schools managed by K12, sales to public and private schools and school districts, and sales directly to consumers. The company manages state-funded virtual charter schools and hybrid schools in 29 U.S. states and the District of Columbia. Schools and districts wishing to offer full-time online programs, blended programs, or individual courses can purchase curriculum and training services to implement their own programs. Homeschooling families or students who wish to supplement their education with an individual course can purchase the curriculum directly.
In fully online public and private schools, students complete all coursework online, rather than in a brick and mortar classroom. Instruction is facilitated by the “learning coach” (typically a parent or guardian) with the assistance and guidance of a state-certified teacher assigned by the school. Teacher interaction is accomplished through virtual classroom environments, telephone, and face-to-face meetings. In hybrid schools, students complete the same curriculum but attend a physical building and participate in classes with other students and teachers.
The curriculum for grades K–8 focuses on the core subject areas including math, science, language arts, history, art, music, and world languages. The majority of lessons in the early grades are guided by the learning coach and take place offline using textbooks, printed materials, and hands-on activities.
The high school (grades 9–12) program is broader and students have more choices in terms of the courses they complete. In addition to core courses, students can choose remedial, Honors, Credit Recovery and Advanced Placement options. Unlike in the K-8 grades, high school courses take place mostly online. Students attend live online classes and have more communication with teachers, via e-mail, phone, and online conferences.
In elementary and middle school, the curriculum is mastery-based, meaning students must score 80 percent or higher on an assessment before moving on to the next learning objective. Short answer or multiple choice assessments are given at the end of most lessons in K-8 and are administered and recorded by the learning coach. In high school, teachers monitor student's progress and grade tests and assignments.
In elementary school, the learning coach is expected to spend 3–5 hours each day monitoring students' progress, logging attendance, and facilitating lessons; as the student advances in grade level, the learning coach's hands-on time is reduced and students work more independently. In high school, the role of the learning coach transitions from direct instruction to providing support as the student is expected to manage his or her own schedule and have more interaction with teachers and other students.
Though some studies of online schools have found lower performance, a U.S. Department of Education study found that online learning can be more effective than traditional face-to-face learning, especially when the two teaching styles are combined. A PolitiFact.com article noted K12's poor performance in Tennessee. The company continues to secure government contracts in places like Maine.
The New York Times investigated K12 and concluded that the company squeezes profits from public-school funding by raising enrollment, increasing teacher workload, and lowering standards. The Washington Post raised similar issues.
A study at Western Michigan University and the National Education Policy Center found that only a third of K12’s schools achieved Adequate Yearly Progress, which is required for public schools by the federal No Child Left Behind legislation. According to the Times, "By almost every educational measure, the Agora Cyber Charter School [a school run by K12] is failing." In Pennsylvania, 42% of Agora students tested at grade level or better in math, compared with 75% of students statewide. 52% of Agora students tested at grade level or better in reading, compared with 72% statewide. Nonetheless, Agora brought K12 $72 million in the 2011 school year – more than 10% of K12's revenue. Proponents argue that such statistics are undermined by the fact that a significant proportion of newly enrolled students begin several grade levels behind because of an alleged failure of brick and mortar schools. Education reformers such as United States Secretary of Education Arne Duncan, have further stated that AYP is not an accurate measure of a school’s performance and estimated that under NCLB, as many as "82 percent of America's schools could be labeled 'failing'".
Some school officials have raised concerns that children's early development requires social interaction that online schools fail to provide. Proponents of online education say that social interaction is healthier and reflects life better when it takes place in a mixed-age group as found in the after-school activities in which many online students regularly take part.
Operating costs for online programs are generally lower than traditional schools, although the cost per student for an online education program can vary widely, depending on where the school is chartered, where the student lives, and which services are purchased by the school district. On average, online schools receive less in revenue than brick and mortar charter schools and district schools, although in some states, online companies are paid nearly as much money per student as brick and morter charter schools.
The New York Times wrote that company profits are used to pay for advertising and lobbying state officials. K12 spent $26.5M on advertising in 2010 and the company and its employees contributed nearly $500,000 to state political candidates from 2004 to 2010. K12 has contributed money to organizations like Pennsylvania Families for Public Cyber Schools, which lobbied for online schools. In Ohio, an organization founded by a K12 official hired temp agency workers to demonstrate with signs against state representative Steven Dryer, who challenged their funding.
In 2005, the Philadelphia Board of Education called for the termination of a $3M science curriculum contract with K12 after the company's co-founder William Bennett, a former U.S. Secretary of Education in the Reagan administration, said, "if you wanted to reduce crime ... you could abort every black baby in the country and your crime rate would go down. That would be an impossible, ridiculous, and morally reprehensible thing to do, but your crime rate would go down." Bennett subsequently resigned from the K12 board and his part-time position with K12. The contract was not revoked, but was not renewed at the end of the contract term.
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