Pennsylvania Cyber Charter Owners and Operators Get Rich While Students Receive Poor Education

Taxpayers don’t have a choice when it comes to their money funding a largely unregulated and underperforming industry at the expense of public schools.
Photo courtesy of Shutterstock.

A bill brought to Harrisburg this session could be a game changer for cyber schools in the commonwealth, but only if it can clear the hurdles that have thwarted so many past attempts at cyber charter reform in the past.

Cyber charters are private businesses that are paid with public tax dollars. Unlike brick and mortar charter schools, cyber charters deliver their educational products over the internet via computers in the students’ homes. That business model should result in savings for Pennsylvania taxpayers, but because of a kink in the charter law, it instead leaves the owners and operators of these schools swimming in money like Scrooge McDuck on a big golden bender.

How expensive is the issue?

The markup on cybers is enormous, as many school districts had driven home when they set up their own in-house cyber-school options for the pandemic. 

In an op-ed for GoErie, Wattsburg Area School District Superintendent Kenneth Berlin noted that their in-house system cost them about $3,000 per student, but Insight PA Cyber Charter School, using the exact same platform, would be paid $13,118 per “regular” student and $23,587 per special education students (a strange kink in PA law makes special education students valuable “cash cows” for charter schools). 

A study in California found that taxpayers were wasting roughly $600 million per year, with cyber charters taking around a 100 percent markup on their actual costs. 

READ: School Vouchers Have Been A Disaster—Now Advocates Are Trying To Rename Them

That’s because cyber charters are paid based on the per-pupil rate at the student’s “home” district. Pennsylvania cybers are paid by a formula that has nothing to do with their actual costs. Imagine your local public district saying, “We’d like to collect $50,000 per student from taxpayers, just because.” In April of 2016, State Auditor General Eugene DePasquale issued a blistering report, dubbing PA charter law the “worst in the nation,” and nothing about the law has changed in the years since. 

The results are visible. 

Some cyber-charter chains are able to invest in profitable ventures such as real estate holdings. Commonwealth Charter Academy paid for a huge Jerrold the Bookworm float in a Philadelphia parade, and if you’re headed to see the Wilkes Barre/Scranton Penguins, you and your group can get tickets for the CCA Ice Level Lounge.  

In the 2019-2020 and 2020-2021 school years, Pennsylvania’s cyber-charters spent $35 million on marketing alone. Agora Cyber Charter spent $50,000 to sponsor Mummies of the World at the Carnegie Science Center. REACH spent $31,000 on air zooka blasters branded with the school logo. There’s the massive cyber-school fraud in the case of Nicholas Trombetta of Pennsylvania Cyber School, who was convicted of siphoning off $8 million of the tax dollars funneled to him from PA taxpayers. 

A 2019 study published in the American Journal of Education found that cyber schools hit poorer districts particularly hard.

Pennsylvania is a cyber charter haven. It may be our beautiful landscape, or it may be that this is a cyber-friendly state, an excellent place to make big money in the cyber charter racket. In 2021, cybers took in almost $1 billion taxpayer dollars.  

In short, a lot of money collected from taxpayers in order to pay for education is going to expenses that have nothing to do with education at all.

But what are taxpayers getting for their money?

The short answer is that we don’t entirely know. In 2019, the Philadelphia Inquirer found that a whopping 10 out of 15 cybers were operating without a current state charter. In December of 2020,  an investigation by the Scranton Times-Tribune found that six of the 14 cyber charters had never been reviewed by state auditors, and others had been audited only once (charters report their own audits to the state). Nor are there any standard metrics for how the schools count attendance (a single log-in per day or per week? X number of hours spent on the program?)

So oversight is not exactly tight. But we do know a few things about the bang for buck of cyber charters. Stanford’s Center for Research on Education Outcomes (CREDO) is generally a big fan of school choice policies, but their 2015 study concluded that online charter schools have an “overwhelmingly negative impact,” worse results than if the student had attended no school at all. The Education Week Research Department found in 2019 that only 37% of all virtual charters had graduation rates of 50% or above. 

Even the National Alliance for Public Charter Schools has called for cyber charters to be drastically improved

Cyber charters do worse than public schools in almost every state, and that includes Pennsylvania. Of the 14 cyber charters currently operating in Pennsylvania, exactly zero have shown reading and math scores above the state average, and in many cases, they’ve been far below. 

In 2018-2019, the last COVID-free year, we find that none of the schools beat the state average of 62.1 percent proficient for English or 45.2 percent for Math. A couple were almost in the neighborhood, but some–well. Agora Cyber was 34 percent English, 10.6 percent Math. Insight PA Cyber was 28.5 percent English, 7.6 percent Math. And Commonwealth Charter Academy, the 800 pound gorilla of PA cybers, the business that spent $19 million for advertising over just two years – their scores show 5 percent English, and 13.5 percent Math. 

Two factors do have to be acknowledged. One is that for some students with a certain set of special needs, a virtual school is a good fit. The other is that virtual schools are likely to enroll students who are not good at doing the whole school thing. 

But even allowing for those factors, cyber schools in Pennsylvania are very expensive failures.

So what has been tried so far?

Before we talk about previous attempts to deal with the problem of cyber charters in Pennsylvania, we need to note one key factor.

Remember that mountain of money that cybers rake in? One of the things that buys you is a tremendous lobbying budget. In 2017, Education Week took a look at lobbying by just two groups—K12 (now called Stride) and Connections Education (an arm of Pearson that previously helped run CCA). In 15 years, Connections had spent almost $400,000 in Pennsylvania. K12 had spent almost $1.4 million — more lobbying money than they dropped in any other state. 

Attempts have been made to rein in Pennsylvania cyber charters, with very little success.

Back in 2017, the state actually attempted to deny the opening of a new cyber on several grounds, including the point that it was a transparent for-profit cash grab. The charter’s argument was that the department of education was mean to them. The case ended up as a lawsuit that the state lost.

For Governor Tom Wolf, charter funding was an issue from 2015, his first year in office. He announced a desire to see cyber charters pay one flat fee for all students of about $6,000. Cyber-charter operators complained loudly. By 2019, he was still arguing for a flat fee plus transparency, and threatening to do it with executive action. Cyber-charter operators complained loudly, to the point that Pat Browne, head of Senate Appropriations claimed that while matters had reached a crisis, the legislature hasn’t been able to solve the problem because basically they haven’t figured out how to make both charters and public schools happy. Why would charters be happy, and why would we need them to be under these circumstances?

Happy they were not. Executive director of Pennsylvania Coalition of Public Charter Schools, former Tea Party organizer, and former FreedomWorks PA Field Director Ana Meyers shot off a barrage of complaints about how this was an existential threat to charters. And she wasn’t very shy about it, calling Wolf “an idiot on so many levels.” She helped launch a PR push called 143K Rising, charging that Wolf was trying to shut charters down (he was not). In 2022, Meyers got herself in trouble for some ill-considered tweeting about the riots after George Floyd’s murder. PCPCS fired her in that summer; in August, she was hired as the Associate Vice President of Community & Board Relations for Commonwealth Charter Academy. 

The governor brought charter reform up again in his 2020 budget speech, saying he supported school choice. But he also said that some charter schools are “little more than fronts for private management companies, and the only innovations they’re coming up with involve finding new ways to take money out of the pockets of property taxpayers.”

 Wolf tried one last time in 2021, calling for a set payment for cybers as well as regular state audits of the virtual schools. Cyber-charter operators complained. The reforms did not happen.

But what about the legislature? Have they tried to do anything?

Some of them have tried to make life easier for charters. One particular bill kicked around year after year, from 2015 on, offering with one hand some token consolation prizes for folks who want to see charter reform, while with the other hand funneling even more money and property to the charter sector, morphing a bit from year to year

But actual attempts to reform the cyber-charter have been made.

Rep. Curt Sonney was a GOP top dog in the Pennsylvania Education Committee (he retired from the legislature at the end of 2022). He was not known as a close friend of public schools. But he represented Erie, a district that has been absolutely gutted by school choice, so maybe that’s why he has spent his last years in office nipping at the heels of Pennsylvania’s thriving cyber charter industry.

In the fall of 2019, Sonney proposed HB 1897. There were a lot of fancy details to the bill, but there were two central ideas:

1) Every district in Pennsylvania would develop its own cyber-school program

2) All the non-district cyber-charters would be shut down.

It was a bold, audacious bill, and it promised cyber-charters an explicit demise. Actually, it was more like a change in business model, because 500 districts would be looking for help to build their cyber-schools—especially since the bill required schools to submit their cyber-plans by November of 2020 and have them operational by fall of 2021. There would have been plenty of work to keep the cyber-operators in business.

The bill was sent to the education committee. A hearing was held in January 2020 where another legislator called it “bringing a bazooka to a gun fight.” And that was pretty much the end of that. 

What’s the newest attempt at reform?

The newest attempt to un-mess Pennsylvania’s funding system for cyber charters comes from Democratic Senator Judith Schwank, representing Pennsylvania Senate District 11, which is a chunk of Berks County. Schwank graduated from Penn State with an Agricultural Degree and worked for two decades with the Cooperative Extension service. Then she served two terms as Berks County Commissioner. When longtime Democratic State Senator Mike O’Pake died in late 2010, Schwank won the special election to replace him, and she has held the seat ever since.

Her bill, SB 337, is simple. It adds to the state’s rules about funding charter schools this short paragraph:

“If a public school district offers a cyber-based program equal in scope and content to an existing publicly chartered cyber charter school and a student in that district attends a cyber charter school instead of the district’s cyber-based program, the school district shall not be required to provide funding to pay for the student’s attendance at a cyber charter school.”

In other words, if your town has a municipal pool, you can’t demand that the taxpayers build a pool for you in your backyard.

This is not the first time Schwank has pitched this bill. She proposed the same idea in 2013, and then again in 2019. SB 37 has only just been submitted, so there’s not been much comment yet, but in 2019, cyber supporters were plenty upset. CCA’s then-CEO Maurice Flurie said that cyber-charters “would no longer exist,” without actually admitting that the entire business model depends on taxpayer dollars. Ana Meyers said that families only choose cyber-charters because their home school is failing them; she did not offer any thoughts about the huge number of students that cybers fail. 

In 2019, of the existing funding system, Schwank said, “It’s crazy. It’s not based on actual delivery of educational programming.”

Schwank’s previous attempts at cyber charter funding reform failed, but this is one more issue on which the new legislative landscape in Harrisburg may make a difference. We can only hope that the cyber-fleecing of Pennsylvania taxpayers may finally stop.

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Peter Greene

Peter Greene is a recently retired classroom secondary English teacher of 39 years. He lives and works in a small town in Northwest Pennsylvania, and blogs at Curmudgucation.

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