School districts paying big money for online programs

Listen to an audio report by Neena Satija.

Part II

The Connecticut General Assembly’s promise last week of $39.5 million in extra funding for school districts that enact certain reforms wasn’t just a cause for celebration for teachers, administrators and students.

Michael Swaine, sales representatative for OdysseyWare, called it good news for him, too.

“It’s good for business,” Swaine said, as he presented the Arizona-based company’s online courseware to school counselors and administrators at Putnam High School last week. That’s because the reforms expected of the districts may include online learning options in curriculums — especially for students who have failed in the brick-and-mortar classroom.

“The intention is for districts to really think about new ways that they can impact student achievement,” said Jim Polites, spokesman for the State Department of Education. “Virtual learning or personalized learning or finding ways that best reach students … I think probably we’ll see those types of things if districts really want access to those additional funds.”

Online schooling options have taken the country by storm as school districts race to close their achievement gaps with dwindling funds. In many states, including California and Pennsylvania, tens of thousands of students attend online charter schools full-time. Massachusetts is the only state in the Northeast that allows full-time virtual schools, though with significant limitations. Some states, such as Florida and Arizona, even require that students take one or more classes online in order to graduate high school.

In 2010, Connecticut joined the more than 40 states that have authorized virtual learning in public schools by passing a law requiring the poorest-performing schools to give failing students a chance to retake classes online.

It’s a process called online credit recovery, and it’s becoming a big business for OdysseyWare, as well as for big, publicly traded companies.

At least a dozen companies are vying to sell their products to Connecticut school districts, adding to the growth of a digital learning industry estimated to be worth $5.4 billion for K-12 education, according to data presented at Arizona State University’s 2012 Education Innovation Summit. The industry is expected to be worth more than $9 billion by 2015.

For districts trying to engage their most struggling and unmotivated students, the prospect of new and flashy online courseware is exciting. But many education experts worry that the move toward online learning will further a trend of the privatization of public education.

“It’s a rip-off to the public,” said Gene Glass, a research professor at the University of Colorado-Boulder, who has published several papers on the growth of online learning for the National Education Policy Center.

“These companies are responsible to their shareholders. So they’re going to cut corners and they’re going to squeeze profits out, and it’s the shareholders that are going to benefit, not necessarily the kids or the parents,” he said.

A state-created program, left out of the loop

According to a 2010 report from Columbia University’s Teachers College, one company, Aventa Learning, saw an eightfold increase in revenue in just two school years. Education giants Pearson Education and K12 Inc. also have digital businesses that are expected to grow in the double digits each year. (K12 Inc. now owns Aventa Learning’s parent company, which is based in Portland, Ore.) Thousands of students are now using e-learning programs in Connecticut that are provided by these and other for-profit companies.



Ivanisha Perogo, 16, studies Algebra I on a computer at Hartford’s Pathways to Technology Magnet High School. (Photo by Uma Ramiah)

Few districts are using an entity the General Assembly created to provide online credit recovery. In 2007, legislators gave $850,000 to the Connecticut Distance Learning Consortium to create Connecticut Virtual Learning. The program spent $400,000 to buy perpetual licenses, which would never have to be renewed, for software from two different companies. The remaining money was spent to implement the programs. Connecticut-certified teachers monitor students’ progress remotely and are available to answer their questions via email.


But the state gave no additional funding to Connecticut Virtual Learning, which is a separate entity from the State Department of Education, and Director Gretchen Hayden said there’s no marketing money to promote the program.

“We have a lot of opportunistic for-profit corporations that are really knocking the doors down [at school districts],” Hayden said. “Districts are not being held to any hard quality standards.”

State Rep. Andy Fleischmann, co-chairman of the General Assembly’s education committee, said that the law passed in 2010 didn’t require districts to use Connecticut Virtual Learning for online credit recovery. But he said many legislators expected districts would use the program. When told that only a few hundred students have used it so far — compared with the thousands who use other courseware  — Fleischmann said that raises “serious concerns.”

The State Department of Education never promoted Connecticut Virtual Learning. In 2010, the education department’s then-Technology Director Karen Kaplan encouraged a partnership with Florida Virtual Schools, which provides courseware and Florida-certified teachers available to students and their parents by phone and online. Florida Virtual Schools’ sales outside of Florida are handled by Pearson.

In the summer of 2010, the state paid the course fee for Connecticut students who wanted to recover credits online over the summer through Florida Virtual Schools.

While the program will still be available to districts that want it, the state is no longer paying. And Florida Virtual Schools’ Global Division Manager Andy Ross said the price, which now is generally $225 per student per course, is going up in Connecticut. The students who took the courses during the last two summers were less prepared than the online teachers expected, he said.

“We basically were losing money on every student,” Ross explained. “A teacher ended up with a lot more work than we had anticipated. [The students] had less proficiency than we expected.”

Kaplan, who left her position at the State Department of Education soon after the partnership began, said Ross’ explanation showed that districts weren’t using these programs correctly. They were more focused on saving money, she said, than giving students the support they needed.

“My guess is that the kids that have been put into this were not selected as carefully and supported as carefully as they should have been,” said Kaplan, who is now director of instructional technology at Hamden Public Schools. “It was just like, ‘Oh, I don’t know, we don’t know what to do with you. Why don’t you go ahead and try this course?'”

Business is up, but results are mixed

Because the state education department does not monitor online programs, it is impossible to determine how much districts, altogether, have spent.

Hartford Public Schools used $100,000 of a $13.3 million federal grant to buy licenses for the current academic year from the Seattle-based Apex Learning. The licenses are used in the city’s three main high schools, which have been broken up into eight “redesign academies.” The magnet school Pathways to Technology, also part of the Hartford district, spent $20,000 this academic year on 20 licenses from PLATO Learning, based in Bloomington, Minn.

The results are mixed. About 40 percent of the students who have used PLATO Learning at Pathways to Technology have passed on the first try.

Sonia Dinnall, project director for Hartford’s federal grant, said more than 300 students have been able to graduate from the redesign academies with the help of Apex Learning. She could not provide data on what percentage of students who took the courses passed, but said the success rate is better than at Pathways because “the level of support is much higher … it’s a different model than Pathways’.”

At the redesign academies, students take online classes with the help of a teacher in the room who teaches that subject. At Pathways, students take classes at home or in a computer lab with limited supervision from teachers.

Of the students who’ve taken Connecticut Virtual Learning courses, 90 percent have passed, and about a third of those earned A’s.

At New Britain High School, director of school counseling Kris Fletcher estimated the passing rate for students taking online courses is similar to Pathways’ 40 percent. Some 120 students use courseware from the Texas-based company CompassLearning to recover credits in English, science and social studies, supervised by teachers who are not necessarily experts in those areas. The district spent $58,000 on start-up costs and pays a $5,000 per year subscription fee as part of a three-year contract.


This OdysseyWare bus is one of three that travel around the country equipped to give courseware demonstrations to school districts. This one was parked recently at ACES magnet school in Hamden. (Photo by Neena Satija)


“The kids do struggle,” Fletcher said. “I think that we took the CompassLearning because we can just have any teacher monitor it and … to be honest, it may have been dollars and cents.”

Taking Connecticut by storm

Parked by the athletic fields of the ACES magnet school in Hamden was a gigantic coach bus with a picture of a smiling student painted across the side.

It’s one of three buses that rove the country with salespeople pitching OdysseyWare to school districts. Inside, teachers and administrators sit on comfortable couches while a sales rep demonstrates the program on a big screen TV.

Michael Swaine, salesman for the New England area, said OdysseyWare is used in at least 40 districts across the state.

“I would say confidently thousands of students in Connecticut are using our program,” Swaine said. He estimated that, so far, he’s sold 1,500 licenses, which can be used by thousands of kids in the state. At $700 per license, that would mean Connecticut school districts this year have paid the company about $1 million.

A license provides one “seat” that a student can use to take any OdysseyWare course. If a school has 20 licenses, then 20 students can be on the software at any one time, taking any course.

Swaine said OdysseyWare only recently started marketing in the Northeast, where legislatures have been slower to allow e-learning programs in K-12 public schools.

Connecticut Virtual Learning’s Gretchen Hayden says she frequently tries to reach out to school districts, but she is often told that they’re already using another program, such as OdysseyWare, CompassLearning, or PLATO.

New Haven Public Schools has spent about $21,000 on Connecticut Virtual Learning, but also uses OdysseyWare.

When Swaine was told New Haven schools also use Connecticut Virtual Learning and not just OdysseyWare, he said, “not after I’m through with them.”

Sold, to Putnam Public Schools

K12 Inc. and Pearson Education are better-known for their full-time virtual charter school programs than for online credit recovery. In December 2011, the New York Times published an investigation of K12 Inc. and the abysmal graduation and success rates of students in its online charter schools. The company’s stock price plummeted after the story was published.

Gene Glass, education researcher and professor at the University of Colorado-Boulder, said the business model is changing for companies like K12 and Pearson.

“Online charter schools are going to be a tiny slice, like 1 percent, of the whole K-12 public education business,” he said. “And by selling individual courses or little packages of courses to a much wider audience, they’re going to make more money.”

Pearson says it offers the NovaNET courseware to several districts in Connecticut, including East Hartford, Bridgeport and Naugatuck. Putnam Public Schools also bought five licenses at $1,000 each per year, allowing 20 students to recover credits online last summer — but administrators aren’t happy with the program, which they bought under a three-year contract.

In hindsight, said Putnam High’s Assistant Principal Joe Ptaszynski, “We probably should have done one year at a time … somebody thought it was a good idea, and it was a discount price, and we just went for it.”

Last week, they met with OdysseyWare’s Swaine over lunch in a room at Putnam High School.

“I’m thinking about the funding,” he told them. He explained how districts, whose state funding is based largely on student enrollment, could actually make, or at least save, money through OdysseyWare.

“If we can pull the funding for that student [who dropped out] back into the district,” Swaine said, “not only would [the purchase of OdysseyWare] start paying for itself, but you guys would start making a ton of money, based on how many dropouts you’re getting [back] in.”

By the end of the meeting, Putnam was sold. School counselor Mary Finnegan-Little said OdysseyWare would primarily be used for credit recovery during summer school. A paraprofessional would supervise about 20 students as they took various courses.

Finnegan-Little said she was excited about the courseware’s potential to engage students, though she added it was also the best option financially.

“It would be ideal to have a teacher doing summer school with these kids. But unfortunately, you know, that’s not the world we’re living in right now.”


Please go here to read Part I of this series. An audio report on this story from WNPR is available here.