Districts delivering online: public schools offer virtual courses to meet the increasing demands of students.

Colorado's tiny Branson Reorganized School District 82 was in the midst of an enrollment crisis in 2001. School attendance in the geographically isolated region, located 50 miles from its closest neighbors, had dwindled considerably. Teachers were expecting only 30 students in grades K-12.

J. Alan Aufderheide, the superintendent at the time, heard about the growing use of a concept that could draw more students--online courses. By then, several national companies had cropped up offering state-tailored programs that looked like a revolutionary and convenient way to deliver instruction. Universities had been using distance education technology for years to supplement the student base.

Aufderheide determined that by designing its own program and opening enrollment to students living in surrounding areas, Branson might be able to expand its tiny enrollment with some long-distance students. By so doing, the district eventually would receive state funding to pay for some of the costs of the online program.

Superintendent Troy Mayfield, who at the time was a Branson teacher, recalled that Aufderheide used approximately $20,000 from the federal Small Rural Schools Technology Grant program to acquire an Internet server and experimented with some core courses online. The superintendent persuaded the school board to pay for ads in newspapers and on radio stations in other Colorado cities. Soon the phone was ringing.

"We were knocked backwards by the response," said Mayfield. "The fax machine started burning up with applications coming in. We had 110 kids that first fall."

This past school year, Branson Online served 1,107 students in K-12. Most of them participate from locations outside the school district. Their reasons vary. Some take online classes to recover lost credits and others to pick up courses they couldn't fit into their regular school schedules. Some don't have access to advanced courses or have moved from the area and want to continue to attend school in Branson.

"It's been a lot more work than we ever anticipated," said Mayfield. "But as administrators, our job is to protect our school and hopefully when we do that, our students are getting a lot of good benefits."

Escalating Enrollments

The idea isn't new: Offer courses remotely, build in variety and the students will come. Several surveys conducted in recent years show that school districts nationwide are embracing this learn-at-home-or-anywhere idea.

Last year, the U.S. Department of Education published a survey of courses taught in elementary/secondary schools. It found that more than one-third of the nation's responding public school districts were using distance technology to offer instruction and that approximately 500,000 students were taking an online course.

Some states have seen huge increases in the numbers of students now studying in cyberspace. In Colorado, the number of online students increased 20 times between 2000 and 2005. In Pennsylvania, 10,000 students were taking online courses in 2004-05. This past school year, more than 13,000 students in the state were enrolled in cyber charter schools alone, and the number is growing, according to the Pennsylvania Coalition of Charter Schools.

According to the national survey, the No. 1 reason for offering online courses is versatility. Online programs can offer dozens of courses to high volumes of students, and they don't have to provide extra physical classroom space. They also address the need for a highly qualified teacher in specialized subjects in remote communities. If students can't find particular courses at their brick-and-mortar schools, chances are they can find such classes online.

"The No. 1 reason that high school kids are dropping out is because they don't feel like school is challenging them enough," says Susan Patrick, former technology coordinator for the U.S. Education Department and now CEO of North American Council for Online Learning. "Forty percent of our high schools don't offer a college-prep curriculum."

But superintendents say they also are attracted by the chance to recoup state funds. When they take in students from elsewhere, most programs get paid for serving them. This potentially negates district losses of state dollars to charter schools, where an increasing number of students are heading. Cyber charter schools in particular draw large numbers into their programs.

Administrators acknowledge that setting up a program isn't as simple as connecting to an Internet server and flipping a switch. Online programs carry startup costs. They require constant revenues for computer upgrades, curriculum development and teacher training. State funding may or may not cover these expenses because states employ differing finding formulas.

Despite these challenges, school leaders say they want to stick with it because it's a trend they believe will continue to grow.

Future Investments

When students register with Branson Schools Online, they get a desktop computer to use at home, financial assistance with an Internet connection if they don't already have one and a basic printer. Setting all that up required a cash outlay at the start, mostly for computers, which comprise about 10 percent of the budget, said Mayfield.

"There is no hot lunch or transportation, but the inventory issues are bigger," he said. The district now buys some 300 to 400 computers each year. Students borrow them for the year.

Mayfield said the district also brought in extra teachers. Branson used its own teachers at first but found it was too demanding. "Everyone had specific jobs, but they also had their classrooms. So we had to make the decision to have a separate staff, not only instructional but administrative," he says.

The program now employs 58 fulltime teachers and its own principal and two technology specialists. It also pays for a curriculum that mixes district-designed lesson plans with pre-packaged courses from providers such as Prentice Hall. Courses include English 7, world geography, world history, algebra, trigonometry, calculus, consumer math, art and technology applications.

The state gives Colorado school districts $5,687 per pupil enrolled in online schools, and students can enroll anywhere in the state they choose. The statewide budget is about $5.5 million.

This fall's rolls in Branson are expected to grow with Mayfield hoping for 1,200 online student registrants. "We feel like we're probably at the size that it's best for us to manage," he says. "We could get bigger very easily, but we don't want to. There's a tipping point."

Flexible Options

In Hamilton County, Tenn., educators turned to online courses as an alternative to traditional summer high school. It seemed students were reluctant to show up for the classes because they were embarrassed.

Charlene Becker, secondary education director, says the summer course wasn't adequate anyway. "It was 19 days per course, and you're not going to get what you would get in a whole nine weeks with a teacher every day. But we had a tech guru who was very good at engaging the kids, and we said let's develop our own courses to address the (state's) Gateway exams--English, biology and algebra."

The four-year-old Hamilton County Virtual School has since grown into a year-round pursuit. So far, the district has spent $500,000 on the program, which serves about 400 students during the school year and 1,000 in the summer, all county residents.

Courses are provided by several vendors including Compass Learning, Class.com and Virtual High School. Local teachers review the curriculum. Some of the courses can be pricey, says Becker--as much as $800 per course credit. It isn't a get-rich-quick scheme.

She says she tries to draw additional funding out of other Hamilton budget areas to help supplement the cost. For instance, some of a high school reform grant from the Carnegie Corp. pays for online courses at schools with limited staff, and some state funds designated for teacher evaluation help pay some teachers' salaries. "I try to see where can we fill a need," Becker says. "That's the way you have to do it. I average it out to try to come out even. And everybody wins."

She also charges $200 tuition for a half-credit course in high school and $200 for the middle school summer credit-recovery course. The state doesn't provide per-pupil funding for the program because it isn't a charter school.

The state has been impressed with Hamilton's efforts. The program now is part of a pilot for a statewide cyber program, along with seven other Tennessee districts. The state has committed $3.7 million and several program coordinators to expand the course offerings.

A Learning Experience

In Waukesha, Wis., Superintendent Dave Schmidt continues to hope the district's cyber-school, iQ Academies, will bring in enough revenue to help offset a serious budget deficit that stood at more than $600,000 last year. The program is expected to draw 1,000 students, most of them attending online full time. Each full-time student means $5,800 in state funding. Part-time students carry a lesser amount, based on their time spent taking the Internet courses.

But setting up the school hasn't been a quick process. Schmidt admits he had a lot to learn. "One mistake we made early on is we modeled it after a brick-and-mortar school," he says. "It's nothing like a brick-and-mortar school." Class sizes were limited at first so as not to overwhelm the teacher pioneers. As a result, they tended to fill up, defeating one of the key purposes of offering courses online in the first place--to offer more for less than in traditional classrooms.

And Schimdt says he didn't think through the fairness of the district's agreement with the program's curricular partner, KC Distance Learning, which is affiliated with Oregon-based Knowledge Learning Corp. The company wanted more than half of the state revenues from the program.

"We didn't understand that the $5,800 we get per student isn't a lot when you start paying for computers," he says. "Then throw in a partner who's going to make money with it, and it's interesting."

Schmidt renegotiated a better deal this year, heading off school board discussion about dissolving the enterprise. Duties have been more clearly delineated: The school district is responsible for teacher and administrative staff costs while KC contributes curriculum, the technology platform and related costs, computers, administrative support, marketing and software costs.

Business Manger Robert Buccholtz projects revenues of nearly $6 million next school year. Expenses will be slightly behind that figure, but by 2009 Buccholtz predicts costs will shrink as student rolls grow, realizing an economy of scale that puts annual revenues at $12.8 million and expenses at $9.5 million.

"Virtual schooling is not going to go away," says Schmidt. "We're either going to lose kids or make money."

Some districts have decided working together is most cost-effective. In Pennsylvania, about 100 superintendents formed Blended.net. The main aim was to win back students who had left for charter schools, particularly those featuring online curricula, and to offer a wider variety of courses to students who couldn't get them where they lived.

Each participating district pays $10,000 annually for 200 slots each. Students can choose from among 68 courses in K-12 taught by a rotating cadre of full- and part-time teachers who work for and are paid by the member districts. Some 280 teachers were compensated for release time to develop the curriculum, and all teachers--cyber or not--are encouraged to use Blended.net to enhance their daily instruction, said director Hervey Hann.

The program has a budget of $1.5 million. Hann says the plan has proved economical because districts provide salaries. The expenses that fall on the administrative offices are for a staff of four, including Hann, for equipment, training and curriculum development.

Unequal Funding

Superintendents whose districts take on cyber programs are looking for ways to maximize their state revenues while expanding student enrollment online. But that is not entirely within their control. What a program earns depends on its state's system of reimbursement.

A study conducted by Denver-based Augenblick Pailich Associates and funded by Bell South documented these differing payment approaches. For instance, in Colorado, cyber schools receive about $5,600 per student--and that amount doesn't change with the size of the program. Brick-and-mortar schools, however, can receive more, especially if they have relatively few students.

But in Minnesota, all students are worth the same amount no matter what kind of school they attend. However, schools with additional online programs don't receive additional funding.

This can create dilemmas. Minneapolis Online must foot its own bill for 19 teachers and about 45 computers for students who don't own them. Most of its 550 students are local so the school district must use the money it already receives for its traditional programs to fund the virtual one. Only about 20 students from elsewhere in the state bring additional per-pupil finding with them, says coordinator Renee Jesness.

So far, the district has been fortunate. Federal technology funds, part of the Title II program, have paid about half of the program's expenses for the past three years with the district paying extra to add online electives, assist students with scheduling problems and provide at-risk students with credit recovery.

The federal grant was to expire this summer. Jesness says the program has cost $750,000 so far to operate. It is unclear what the district will do to replace the federal dollars. Jesness says the costs could fall to the individual district schools where students attend.

Dave Grosche, superintendent of the Edison 54JT School District in Yoder, Colo., was inspired by the neighboring Branson Online program. Also a rural district, 48 miles southeast of Colorado Springs, Edison had fluctuating enrollment (at one time as low as 22 students in K-12) so losing even a single student meant a significant loss. Because of its size, the district was getting a higher-than-average amount of state per-pupil funding, about $10,000 per child.

Grosche founded Edison Academy to provide online instruction. This year, 40 students, from kindergarten through 12th grade, attended full time. For each, the state pays Edison $5,600, the rate for a virtual school.

Grosche considers that reasonable, but his main challenge has been to secure the full $10,000 payment. To qualify, Grosche is encouraging students to take courses at brick-and-mortar schools in addition to their online courses, including at community colleges and vocational schools.

The Edison Academy tries to keep costs low by not paying for advertising. "It's all word-of-mouth," says the superintendent. But he has a plan for attracting and keeping more students: He lets a few in each year in between enrollment periods, even though the state won't reimburse him mid-year.

"If we treat them right, they are going to be here in October," Grosche says.

Multiple Uses

When Grosche started Edison Academy, he went after the group of students he thought might get the most out of the experience. "I've got some kids that dropped out of school around here. And I went out and got seven kids, most of them previously expelled," he says.

But things didn't go smoothly. The students didn't complete their work. Their motivation levels didn't change. "These kids were every bit as bad with the online program," he says.

Grosche nearly decided to quit the online approach but reconsidered. "You know, maybe I'm just doing this wrong," he says. So he refocused energies on the rest of the students, offering some existing course programs such as PLATO, a no-frills core program, and Colorado Online for students who wanted more advanced courses than he could offer.

He also linked his students with opportunities to earn college credit at places like the University of Colorado and Pike's Peak Community College.

Administrators across the country say that's why they started cyber programs--to offer education in multiple formats for students who want it. Among their clientele are students whose families have relocated to other countries temporarily, students who are ill and recovering at home and students who can't fit certain courses into their schedules.

"Our state has cut back revenue to schools, and we aren't able to give kids the flexibility in their schedules," says Kay Baker, superintendent of the Salem-Keizer, Ore., schools. The district operates the 7-year-old SK Online, one of the nation's oldest online programs, serving more than 900 students in grades 9-12 across the state.

Baker formed connections with other agencies. "Originally we were doing this completely on our own," she says. "But over the last five years we have connected with our community college here in town and our education service district to talk about what platform issues we can share that would be cost effective for all of us."

Students now can take college courses. Gifted middle school students can take high school courses without having to commute or sit in classrooms with much older students.

"We have 38,000 students. We know our comprehensive high school meets the needs for the majority of our kids, but it doesn't for every kid," Baker says.

"There's no single one best way to learn," says Pat Crawford, superintendent of Greencastle-Antrim, Pa., schools, part of the Blended.net consortium. Blended.net is establishing links with Allegheny Community College to give students dual high school and college credit.

"We have school districts running alternative-ed programs and credit recovery programs," he says. The system also provides support for families who home school.

Athletics Online

In Waukesha, one student who attends iQ Academy is a professional tennis player and another competes in motocross. Both are on the road frequently, which would seriously jeopardize regular high school attendance, says iQ Principal Kristine Diener. "We have a number of kids who are dancers. We also have kids who have physical or emotional illnesses. And we have one 9-year-old boy who is ready to be a high school freshman. But he looks like a 9-year-old. It just wouldn't have been a good situation for him to attend high school."

Minneapolis Online started as a way to offer students physical education. Doing so cleared up time slots for them for desired courses at their traditional schools and saved some students the embarrassment of competing in athletics with classmates. More than 1,000 students applied for that course alone this past year, says Jesness. They participate in sports or exercise on their own, tracking heart rates and other physiological data and filling out a journal. They also study health topics and take tests on their knowledge.

But Minneapolis Online offers much more than an alternative to phys-ed class, core academic courses and electives. "We knew with increasing budget cuts that we didn't have the ability to offer all the electives at each school," says Jesness. "We brought forensic science online. It's a very popular course. We offer German."

Hamilton, Tenn., wanted to reach at-risk students through its online program. "We had far too many who did not graduate," says Becker. "Our dropout rate was 34 percent, and when we started digging deeper we realized a lot don't graduate because they don't stay with their cohort. By the end of 10th grade, they give up. Our idea was how do you form a program that gives the kids more flexibility and credit recovery?"

Now the dropout rate is decreasing and more students are graduating, says Becker. About 350 more diplomas were expected to be awarded this summer.

She takes it as a sign the program must continue. "School systems are looking for ways to personalize education," she says. "You're failing the students if you're not finding a way to meet the way they learn."

RELATED ARTICLE: Fuzzy funding of online delivery.

The costs of running online schools have inched toward the center of school funding debates in some states. In a few states cyber schools, as they're known generically, are developing to such a degree that state spending is increasing rapidly.

In Colorado, where education costs have increased 66 percent in a handful of years, the legislature is investigating cyber-school expenditures to determine how much of the budget should be reasonably spent on them. In Pennsylvania, where more than 13,000 students attend online charter schools, superintendents have already challenged lawmakers to re-examine the way cyber charter schools are funded.

Charter schools in that state get a payment based on the overall spending of the districts where their students live. The result is a per-pupil payment that reflects about 80 percent of what it costs to educate a child in that district. These payments can range from $5,000 to $12,000, depending on district size and expenditures.

But a bill introduced in Pennsylvania within the last few months would restructure this funding distribution, basing payments on the size and quality of the online programs. The proposal was spurred by the Pennsylvania Association of School Administrators. The bill proposes that cyber schools serving 1,000 or fewer students would receive $5,000 for each student, with extra funding for those in special education. Schools serving 1,001 to 4,999 students would receive $4,000 for each, and schools with enrollments of 5,000 or more would receive $3,000 per student.

Stinson Stroup, PASA's executive director, testified before the state's House Education Committee and asked legislators to consider differences between the various charter programs, perhaps developing a fee scale that considers cost and quality.

"It is difficult to compare the cost of cyber school programs across states," Stroup told legislators. "We are not suggesting that high-quality cyber instruction is cheap. The cost of program development can be substantial, often more costly than for traditional courses. And if there is a lot of online interaction between the teacher and each student, the cost of delivery can be expensive. But if your students are home schoolers who don't want (online teacher) supervision, the cost isn't the same."

Cost Disputes

A study of several statewide cyber programs conducted on behalf of Bell South and due for official release this summer shows that the average startup costs for an online school is $1.6 million. But Stroup argues the potential for cost savings over time is greater than with a brick-and-mortar program. Cyber schools don't have the same operational costs as traditional programs, such as maintenance and security. And online schools tend to have fewer teachers and administrators.

Furthermore, a traditional school's program costs tend to remain constant, while cyber programs pay varying fees for their curricula. Some contract with online-school companies for pre-established curricula, others spend thousands to develop their own.

Stroup testified: "School districts that pay the bill for every resident student enrolled in a cyber charter schools pay the same thing regardless of the cost or quality of the cyber school program.... Fees should reflect higher payments to those providers that develop curriculum uniquely appropriate for Pennsylvania's academic standards, that tailor programs to individual student needs and that provide the greatest personal attention and support for each learner."

Superintendents in many districts have complained that money is being taken from them and given to the cyber programs. Duff Rearick, chief of the Greencastle-Antrim School District in western Pennsylvania, says 21 of the district's 2,800 students left the district a few years ago for cyber charter schools, taking with them $7,000 each in state funding.

"It doesn't cost $7,000 a year to educate a child in cyber charters", Rearick says.

He and about 100 other Pennsylvania superintendents formed a consortium, Blended.net, to offer school-district-sponsored cyber instruction. Their costs are around $2,000 per student, according to the program's director, Hervey Hann.

Cyber Counters

Cyber charter school operators counter that they don't get all the money a brick-and-mortar school receives. For instance, they don't get any grants that may become available for school improvement. They point out that regardless of their enrollment size, they have offices, Internet connections, instructional supplies and materials, teachers and administrators. Under state law, school programs also have to employ a nurse to be available for routine screenings and health questions, Hann says. Equipment replacement can also be expensive.

"It's ridiculous to say in terms of equity you should send a cyber or charter school less. They are already getting less" says Tim Daniels, director of Pennsylvania's 105-member Coalition of Charter Schools. He said his question to school districts is, "What are you doing with the money you are keeping when you don't have the kids?"

Pat Crawford, superintendent of the Bedford, Pa., schools says he isn't knocking the need for cyber schools. "We believe that virtual learning should be available to students, but it shouldn't be draining the resources of public school systems that are already strapped."

--Ruth Sternberg

RELATED ARTICLE: Our virtual charter school.

BY WILLIAM R. HARBRON

The Northern Ozaukee School District took a bold step in January 2003 by contacting K12 Inc. about entering into a cooperative agreement to operate a virtual charter school for K-8 students in Wisconsin. Our district had no previous experience with virtual education, but we felt this was an opportunity worth investigating.

During a whirlwind three-week period, the school board, administrative team and K12 consultants explored the merits of our 850-student district, located 30 miles north of Milwaukee, hosting a virtual charter school that would be open to any child in the state.

K12, which was founded by William Bennett, former U.S. secretary of education, already had established virtual charter schools in other states, including California, Idaho, Iowa, Minnesota, Pennsylvania and Ohio. The company brought to the table knowledge about the operations of virtual charters and offered a comprehensive and rigorous curriculum that had been researched and developed specifically for online delivery.

Pros and Cons 

Our district identified several advantages and opportunities: To apply the curriculum developed by K12, where appropriate, to traditional classrooms; to learn how to effectively personalize and manage a student's learning; to enter into the future of a virtual education delivery model; and to share resources between the virtual charter school and the three brick-and-mortar schools in our district, making both more cost effective.

Following three weeks of deliberations, the school board agreed to hold a public meeting to enable community members and other interested parties to voice their opinions about our proposal. We heard a mixture of viewpoints from those advocating that the board move forward to those opposing any delivery of online instruction. Advocates pointed to the advantages of partnering with K12 and viewed the establishment of a virtual charter school as the district's move into an innovative future. The opposition came from a faction of home schoolers who saw the program as a threat to their independence, leading to an eventual government takeover of home schools. Additional opposition was voiced by a small group of district teachers who supported the Wisconsin Education Association's stance of blocking the creation of virtual charter schools.

After examining the pros and cons, the Northern Ozaukee school board granted a charter for establishing the Wisconsin Virtual Academy in 2003. WIVA thus became the second statewide K-8 virtual charter school in Wisconsin. The first was the Connections Academy, started a year earlier by the Appleton Area School District.

The district and K12 developed a comprehensive five-year service agreement that details the relationship between the district and K12 in operating WIVA. Under the agreement, the school board remains in control of the school and has the final say in staffing, budgeting and operations of the school. K12 provides curriculum, professional development, marketing and public relations services, student recruitment and legal assistance.

Flexible Instruction

The Wisconsin Virtual Academy has completed its third year of operation. It has evolved into a strong and effective collaborative partnership between teachers and parents working to provide an effective educational program for their students.

Students work with online curriculum and lessons supported by offline instructional materials, parents and teachers. The virtual learning environment provides flexibility in meeting and responding to the students' educational needs. In addition, students participate in monthly field experiences with their classmates. Teachers facilitate online virtual classrooms for direct instruction and tutoring.

The three years have been a period of learning, developing and growing in the virtual environment. Due to the dedication of the WIVA administration and teachers, the virtual education delivery system continues to mature and evolve with an enrollment of 900 students expected this fall.

The design of the curriculum allows for the students' educational program to be personalized and self-paced, but new technologies continue to become available. The latest enhancement is the addition of Elluminate, a program that allows WIVA teachers to conduct online gatherings of up to 10 students and one-on-one tutoring. The software is especially suited for helping children who typically are learning alone at home to adapt to group sessions.

The virtual academy is exploring software that will allow for efficient scheduling of online classes as well as other programs that will further enhance online classes in managing the students' learning program.

Annually, WIVA establishes operational and educational SMART goals to assess the academic program and school's operation. Furthermore, survey data from parents, students and teachers gives additional insight.

The district has initiated discussions with K12 to consider implementation of a high school model in 2007-08. This will allow current students the option to continue with the K12 curriculum and expand the virtual school opportunity to those in the district's traditional high school.

Financial Offset

Virtual education is not without its critics. Under Wisconsin's open enrollment environment, students may apply to attend any school in the state, including a virtual school located hundreds of miles away. Wisconsin school districts now operate 11 virtual schools and others are considering adding online instruction.

Our district has weathered several attacks by opponents. The first was brought by the Wisconsin Education Association, which filed a lawsuit against the establishment of the school. After two years, the district prevailed.

The second attack was waged by other school districts that claimed we were enrolling their students to achieve economic advantage in our district. For each open-enrolled student, the district collects approximately $5,600 in state aid. These revenues pay for WIVA's faculty salaries and benefits, online curriculum, instructional materials, technical support services and general operations.

While money was not our motivation for opening the virtual academy, we have received an extra $120,000 annually toward the school district's operating fund, which offsets funding losses caused by declining enrollment in our brick-and-mortar schools.

WIVA is a look into the future of public education. Virtual education allows school districts to effectively personalize students' instruction and provide the necessary support to allow every student to be successful.

William Harbron is superintendent of the Northern Ozaukee School District, 401 Highland Drive, Fredonia, WI 53021. E-mail: [e-mail]

Ruth Sternberg is a freelance education writer in Columbus, Ohio. She can be reached at [e-mail]