Quotes: "Grave Reservations" About Online Learning Hype

"Anytime you have an industry in which the government (read: we taxpayers) are footing the bill, providing 90% or more of the money to for-profit companies (it’s especially dangerous when the company is public, as there’s tremendous pressure from analysts and investors to hit quarterly growth, margin and profit targets), then it seems to always lead to widespread abuses and, often, outright fraud (in addition to for-profit schools, the entire subprime lending industry and the healthcare industry come to mind)." - Whitney Tilson in his most recent email blast (not yet posted online)

READ THE FULL QUOTE INSIDE

I have no doubt that online learning can work very well for some kids and, even if it doesn’t work great, may well be the least-bad option for many other kids. I also tend to like anything that creates options for parents and competition for the status quo. Finally, I have no problem with for-profit schools. All that said, I have GRAVE reservations about the sector as it’s currently operating right now. Based on many articles covering schools in many states, the industry – like the for-profit colleges – seems focused on growth and profits, which is leading to widespread shenanigans that screw kids – and taxpayers. Anytime you have an industry in which the government (read: we taxpayers) are footing the bill, providing 90% or more of the money to for-profit companies (it’s especially dangerous when the company is public, as there’s tremendous pressure from analysts and investors to hit quarterly growth, margin and profit targets), then it seems to always lead to widespread abuses and, often, outright fraud (in addition to for-profit schools, the entire subprime lending industry and the healthcare industry come to mind). Thus, it’s imperative that there be careful regulation and oversight – which is, of course, fought tooth and nail by advocates of the industry, both for reasons of financial self-interest, but also because of political philosophy: the advocates tend to hate all government regulation and oversight, lessons from the housing bubble notwithstanding).

 

Comments

[Tom Vander Ark]

I have grave concerns about the fact that 2/3 of US kids don't get what the need and deserve--almost a 1/3 drop out and another 1/3 leave school unprepared for college and careers.

Whitney's comparison is not a good one. For-profit colleges directly serve students and receive government funding. Virtual school operators are non-profits that serve students (like FLVS). Some buy curriculum from vendors like Apex, some buy instructional services from vendors like K12 or Connections. There are no 'for-profit operators.' There are nonprofit boards held accountable by the state (or other authorizers) that buy services.

[Alexander Russo]

thanks for the comment, tom -- appreciate the clarification that there are intermediaries in online learning who are not for-profit companies.

but state and local agencies (and charter authorizers) have proven to be so bad at keeping ineffective programs out of school budgets or at shutting them down once they're in the door -- even without all the encouragement from foundations and the USDE that they're getting now. take a look at the struggle to close bad charters, which also have authorizers and nonprofit intermediaries.

i feel like tilson's point still stands.

[Mary]

"Tilson's point" has already been made by the courageous journalists and educators who are finally exposing the naked profit drive behind the accountability jargon. Tilson could have broken the story, you could have, Vander Ark could have. None of you did.

Vander Ark sounds pleased that for-profits are hidden behind non-profit fronts. That's the marketing position for cheats, liars and frauds hidden behind the flimsy non-profit, advocacy, and accountability baseboards. Real people hold it in the lowest contempt of all.

The discussion isn't his to redirect, or yours, either. You all decided to ride the gravy train as far as it would take you.

[Jose]

Perhaps the government is mismanaging the online learning sector as a whole and perhaps it needs more consideration.

[Robert D. Skeels]

Mary's point above regarding how these "reservations" are too little, too late is well taken. Neither Tilson nor Vander Ark have ever seen a profit to be turned from the public commons that they didn't like.

The only reason they are even mentioning doubts now is that they are so closely associated with online lucre that the scope of the K-12 scandal and others like it are going to cause these profiteers a lot of discomfort in coming days.

A real education reporter would be investigating to see how much involvement Caprice Young had in the K-12 debacle. Wasn't it less than a year ago when her cash cow KC Distance Learning was bought by the more profitable K-12?