RALEIGH, N.C. - A North Carolina judge heard arguments Monday on whether a for- profit company should get taxpayer money to operate a virtual charter school that offers online-only classes to students as young as kindergarten.
N.C. Learns, a non-profit group seeking to open the North Carolina Virtual Academy, won approval from an administrative law judge last month to begin enrolling students this fall, despite the vehement opposition of state education officials whose approval is typically required by law.
N.C. Learns is fully funded by K12 Inc., a for-profit Virginia company that has managed online schools in 29 states with mixed academic success. K12 would operate the North Carolina Virtual Academy.
The State Board of Education appealed the earlier legal ruling to Wake County Superior Court. The North Carolina School Boards Association has also entered the case after 89 of the state's 115 public school boards went on the record opposing the virtual academy.
During Monday's hearing, Assistant Attorney General Laura E. Crumpler told Judge Abraham Penn Jones that N.C. Learns was essentially trying to use a legal technicality to establish an online school without approval from the state board, which is required under North Carolina law.
"This is not a simple question of opening a school, your honor," Crumpler said. "These schools have to be held accountable."
Jones said he expects to rule in the case on Friday.
N.C. Learns utilized a little known provision to win preliminary approval of its application in January from the local school board in Cabarrus County.
In exchange, the company agreed to pay 4 percent of its revenue to the school system in Cabarrus, located north of Charlotte. With an anticipated enrollment of about 2,700 students, the virtual charter school would be funded by drawing an expected $18.4 million in revenue away from public school systems across the state.
With its preliminary approval from Cabarrus in hand, N.C. Learns submitted its application to the State Board of Education for final approval, though the board chair had previously they wouldn't approve any applications for virtual charters. State law sets an annual deadline of March 15 for making decisions on which charters can open the following fall.
Even before the deadline passed, N.C. Learns filed a lawsuit arguing that by failing to approve its application the State School Board had essentially ceded its legal authority under state law. To the shock of state officials, Administrative Law Judge Beecher Gray agreed, granting approval for the virtual school on March 18.
Representing N.C. Learns, lawyer Fletcher Hartsell said it wasn't surprising the proposal for a virtual charter school has chafed the state's education establishment, which he portrayed as resistant to new ideas.
"They don't represent children," said Hartsell, a Republican state senator from Concord. "They represent institutions."
In addition to questioning the legality of the school's approval, critics of the plan have focused on the record of the private company at the heart of the proposed operation.
A review by the National Education Policy Center found that only about a third of K12's students achieved adequate yearly progress as measured on federally required end-of-grade tests. An article published in December by The New York Times found K12 students were at higher risk of dropping out and that the company continued to reap profits from students who had failed to ever log in for classes.
North Carolina law forbids taxpayer money from being paid for students to enroll in private schools. Though Hartsell claimed broad-based grassroots support for the North Carolina Virtual Academy, N.C. Learn has such close ties to the for- profit company that K12's logo is displayed on the non-profit organization's web site.
Chris Withrow, the chairman of the board for N.C. Learns, said the non-profit group was created in November and that it is 100-percent funded through a grant from K12. He said Monday he didn't know the amount of the grant provided by the for-profit firm.
The state already offers some online classes through the N.C. Virtual Public School, the proposed online charter school would be the first of its kind in North Carolina.
Eddie Speas, the lawyer representing the North Carolina School Boards Association, said if K12 wants to do business in the state, it should have to get its virtual academy approved like every other charter school.
"This company cannot be allowed to experiment with these children until the state board of education gives its approval," Speas said. "The law is clear: The authority to approve a new charter school resides with the State Board of Education."
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