Tennessee Legislators Okay For-Profit Online Schools

Published May 31, 2016

Tennessee is one small step away from allowing the operation of virtual schools in the state by for-profit companies. All that remains is for Governor Bill Haslam (R) to sign Tennessee HB 1030 into law, as he is expected to do.

The Virtual Public Schools Act (Tennessee House Bill 1030), was introduced this past February by Rep. Harry Brooks (R-Knoxville). The bill replaces a similar piece of legislation passed unanimously in the Tennessee Senate (SB 874) in April. Brooks’ version—passed by the Tennessee House by a 69-24 vote strictly on party lines on May 12—was substituted for the Senate bill on May 21.

The law requires for-profit virtual school operators to retain sponsorship from a state-approved Local Education Agency and maintain a brick-and-mortar administrative office in Tennessee. VSOs must also “provide instructional materials, access to a computer and printer, and an Internet connection.”

If signed by the governor, the bill would go into effect as law on July 1 of this year and would sunset on June 30, 2015.

‘Make Money by Providing Services’
Tennessee school districts receive an average of $6,000 per student. The law mandates these monies follow students attending VSOs. Because VSOs don’t require school buildings, cafeterias, libraries, or bus services, HB 1030 opponent Rep. Mike Stewart (D-Nashville) says companies such as for-profit K12, Inc.—the nation’s largest private online learning company and a major lobbyist for the bill—will receive huge windfalls.

“The Virtual School Bill just provides a method whereby these for-profit companies can take Tennessee tax dollars and put it their pockets,” Stewart told a television reporter for Nashville’s NewsChannel 5. “Every new student they sign up is essentially pure profit for them with a few ancillary costs,” he said.

“We should just say to for-profits like K12 Inc., take your scam to some other state,” Stewart said.

“There’s no hiding the fact that for-profit online education providers are going to make money by providing taxpayer-funded education services, just like textbook, construction, telecommunications, sanitation, bus manufacturing, and pencil companies do,” says Michael Van Beek, education director at the Mackinac Center for Public Policy, a Michigan-based research and education institution. “But are the opponents of these online companies really suggesting that districts should only do business with nonprofits or provide all of these education-related services themselves?”

‘Decreasing Cost of Education’
Kyle Olson, CEO of the Michigan-based school reform advocacy organization Education Action Group, concurs with Van Beek’s assessment.

“It seems to me Rep. Stewart is more concerned about free market capitalism than he is about decreasing the cost for delivering education to children,” Olson said. “Is Rep. Stewart just now realizing government contracts with for-profit companies? Other types of contractors like transportation, food service, and custodial companies deliver a service for less money and are more responsive to the client.”

Although Olson acknowledges controls and oversight should be part of the virtual learning process, he adds, “Virtual learning has shown it is an effective educational option, and parents ought to look at it as one possibility. If Rep. Stewart thinks the public schools are the best in his community, the data will support that hypothesis,” he said.
Van Beek says this competition is the real motivation for the opposition to funding virtual schools. “The reality is that public school special interest groups and their political allies fear online education providers because they view them as a potential threat to their monopoly on taxpayer-funded schooling and to the political rewards bestowed upon those that protect this monopoly.”

Bruce Edward Walker ([email protected]) is managing editor of Infotech & Telecom News.

Internet Info:

“Summary: The Virtual Public Schools Act,” Representative Harry Brooks, Tennessee General Assembly, May 21, 2011: http://wapp.capitol.tn.gov/apps/billinfo/BillSummaryArchive.aspx?BillNumber=HB1030&ga=107

“Online Schools Make Big Profits from Tax Dollars,” Ben Hall, Nashville NewsChannel 5 investigative report, May 17, 2011: http://www.newschannel5.com/story/14664377/online-schools-make-big-profits-from-tax-dollars