K12 Virtual School settles suit for misleading investors over performance. What about parents?

Many parents don’t know it, but they’re in the middle of the Wild West days of privatizing education. Anything and everything goes under the guise of giving parents "choices." Wow, sounds empowering, doesn't it.

The largest and most powerful online school is K12, is about to hide their massive failures by settling a lawsuit that exposes their parental con.

EdWeek: The for-profit education provider K12 Inc. has reached a tentative settlement in a class-action securities lawsuit brought by investors who said they were misled by the company's business practices and academic performance. The online schools provider has agreed to pay $6.75 million to plaintiffs, while company officials said they also continue to deny any claims of wrongdoing … other claims, focused on academic performance and school quality, will be voluntarily dismissed, according to a statement by the company.

See any red flags?

And that’s the problem. The investors in this case only wanted their money back, and were willing to settle the case and walk away. What about the problems they sighted in their lawsuit. What about the school systems and parents that bought into this scam? Will they be compensated or have their kids lost years returned to them?

I posted this audio from NPR just a short time back...



From an eSchool article, the facts not presented above:

The Times published numerous improper practices at K12’s virtual charter schools. After the article appeared, the price of K12 stock plunged.

The lawsuit, aimed at the country’s largest operator of full-time public virtual schools, alleges that:

• K12 engaged in improper and deceptive recruiting and sales strategies, aimed at enrolling students regardless of their ability to successfully complete the curriculum;

• K12 failed to disclose administrative pressure from upper management to pass students, despite poor or nonexistent academic performance, so as to maintain high enrollment levels and continued government funding; and

• According to various academic benchmarks, K12 students chronically underperformed their peers at traditional schools.

The complaint alleges that, as a result of these actions, K12’s statements regarding its academic performance, financial performance, and business and financial prospects were “materially false and misleading.”

The settlement means this story goes away. That’s at the heart of privatization.