Wednesday, January 18, 2017

Trump's Election Has Been Very Good For K12 Inc.

Posted By on Wed, Jan 18, 2017 at 2:10 PM

The impending demise of K12 Inc., the for-profit online school corporation, has been an occasional source of schadenfreude in my posts. Online education as the sole source of schooling for K-12 students is a bad idea for all but a few people, and K12 Inc. needs millions of students, which requires a regular infusion of new students, to make a profit. The corporation's schools are failures by nearly every standard you can apply to them, and its stock prices have fallen steadily as a result. It had all the earmarks of a failing corporation, and I watched expectantly for it to crash and burn.

That changed November 9, the day after Trump's election. As you can see on the stock report at the top of the post, K12 Inc.'s stock price has soared since that fateful day. The Trump-era market is bullish on for-profit privatization in all its forms, including education.

Now, along comes Betsy DeVos as Trump's pick for Secretary of Education. DeVos is a champion of school choice—charters, vouchers and homeschooling. So long as it helps dismantle the school district model of public education (and where possible, promotes religious education), she's for it. In Michigan, DeVos' home state where she spends millions of dollars buying pro-school-choice politicians and setting up nonprofit advocacy groups, 80 percent of the charter schools are for profit, and accountability is kept to an absolute minimum. Even charter advocates complain that the Wild West approach to charters allows too many low quality Michigan schools to remain open.

But charter schools don't do well in sparsely populated areas where distances work against them. That's one reason DeVos and other school choicers support online education, where your "school" is always as close as your computer. Distance is no obstacle for distance learning, so online schooling opens up rural education markets.

We know DeVos held an "investment interest" in K12 Inc. before it went public, but we have no way of knowing if that continued. We may find out if she makes a full financial disclosure during her confirmation hearings.

AFC K12 Inc. made a clever move last week when it elected Kevin P. Chavous to its board of directors. Chavous was one of the founding members of American Federation for Children as well as its executive counsel. Funded by DeVos, AFT AFC gives lots of campaign money to pro-charter and pro-voucher candidates around the country, including in Arizona, and is closely allied with ALEC (American Legislative Exchange Council).

If DeVos is our next Ed Sec, expect a continuing rise in the K12 Inc. stock price. She's on the side of online education anyway, and having her friend and compatriot Kevin P. Chavous sitting on the board will make her relationship with the corporation that much closer.

A School-Choice-Makes-Strange-Bedfellows Bonus. You may have heard of Democrats for Education Reform. Like the AFT AFC, it's a vocal charter supporter, though a somewhat quieter voucher supporter. It was created by a group of Democratic hedge funders, so it, like the AFT AFC, has lots of money to throw at candidates who support its agenda. The difference is, DFER gives money to Democratic candidates its funders hope will break from the rest of their party and vote for a school choice agenda. The DFER/AFT AFC connection is Kevin P. Chavous, who was a DFER board member and on his website lists himself as "the founder and Board Chair Emeritus for Democrats for Education Reform."

Editor's note: A previous version of this story misidentified the AFC as the AFT.

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