Students flocked to cyber-charter schools this year. So did district revenue and federal relief funds

By: - April 14, 2021 7:26 am

Young student watching lesson online and studying from home. Getty Images.

Brian Hayden thinks he can pinpoint the day that Pennsylvania students started flocking to his school. 

It was early July 2020, and Hayden and the rest of the staff at the Pennsylvania Cyber Charter School were on their annual summer break. Betsy DeVos, at the time the U.S. Secretary of Education, told the press that the federal government would require schools to open for instruction in the fall. 

Her remarks came soon after the Wolf administration issued its first universal mask mandate, which raised the possibility that students and staff in school buildings would have to be masked all day. 

PA Cyber had thousands of enrollment inquiries from potential students when its staff returned from their week-long break, according to Hayden, the school’s chief executive officer.

Hayden said the school redeployed 40 staff members to help the enrollment office keep up with the “overwhelming” deluge of emails and phone calls. By the time the new school year began in August, it had hit its enrollment limit of nearly 12,000 students. 

When the pandemic shuttered Pennsylvania’s classrooms last year, the state’s 14 cyber charter schools said they were uniquely qualified to help students thrive in their new world of online learning.

Students and their families evidently agreed: Enrollment in Pennsylvania’s cyber charter schools shot up by 60 percent during the pandemic, from 38,000 students a year ago to 60,000 students today, data from the state Department of Education show. 

The rush of students to cyber charter schools has also brought an influx of cash – along with renewed calls from traditional public school advocates for the state to more closely scrutinize the cost of cyber charters, which perennially log some of the lowest academic performance in the state. 

Like brick and mortar charter schools, cyber charters are funded by contributions from public school districts. Districts pay the online schools an annual rate for each of their students who opt to enroll in one. 

District payments to charter schools have been rising steadily for a decade. But they’re expected to double this year, driven largely by a $350 million increase in contributions to cyber charter schools, according to the Pennsylvania Association of School Business Officials.

Cyber charter schools are also due to be some of the leading recipients of federal funds that were intended to ease the transition to remote learning and mitigate learning loss among students. 

That’s despite the fact that cyber charter schools appealed to families by pledging dependability during the pandemic, saying they could spare children the disruptions that have plagued public schools for the last year. 

“I don’t want to go over the top, but it’s perplexing at best and appalling at worst,” Temple University Law School professor Susan DeJarnatt said of the federal revenues slated to accrue to cyber charter schools this year. 

“They don’t have the same costs [as brick and mortar schools.] Everyone is affected by COVID, but I’m sure they are the least affected of anyone in the public school system,” DeJarnatt told the Capital-Star.

Estimates from the Wolf administration show that 12 of the state’s cyber charter schools are due to receive a cumulative $151.9 million in cash subsidies from American Rescue Plan – the $1.9 trillion federal stimulus package that Congress approved in March, which sent $5 billion in one-time emergency relief aid to Pennsylvania’s public school districts. 

Those one-time payments are the third installment that Pennsylvania schools are due to receive from the federal Elementary and Secondary School Emergency Relief (ESSER) fund. 

They come on top of $49 million in ESSER funds that cyber charters got from the federal stimulus package that passed in December. Cyber charter schools also received $10 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that passed last May. 

All told, the one-time cash infusions to cyber charters are due to exceed $211 million, not including the Paycheck Protection Loans that some of them claimed last year. 

When cyber charter schools were included in the first first round of emergency aid last summer, public school advocates questioned whether they should get a share. 

As the Pittsburgh-based news outlet PublicSource reported in June, those funds were intended to help schools pivot to remote learning – something that cyber charter schools were already equipped to provide. 

The two subsequent allocations from the federal government grew in size and came with different rules. The $2.2 billion in emergency aid that Pennsylvania schools shared in December was supposed to support food programs and technology. Schools are still waiting on federal guidance for the more recent round of funding, but the state has told them to use at least some of it to address learning loss and support vulnerable populations – a segment that includes children with disabilities, English learners, and students experiencing homelessness. 

Public school advocates are still skeptical that cyber charter schools are needful recipients of the federal cash.

“We’ve been hearing since the day that traditional schools closed that cyber charters were built for the pandemic,” Susan Spicka, executive director of Education Voters of PA, which advocates for tighter regulation of all charter schools, said. ”If they were perfectly positioned and [students] weren’t losing learning, those things don’t match up.”

Spicka doesn’t take issue with the way the state has decided to distribute its federal dollars: the formula they used relies on a school’s Title-1 allocation, which weights federal funds towards schools that educate low-income students. 

But “the state system has created an issue where charters have a lot of excess funding right now and school districts don’t,” Spicka said. 

Traditional public schools and even brick-and-mortar charter schools have had to retrofit facilities to accommodate in-person learning this year. Many have had to alter transportation schedules, too, so they could enforce social distancing on school buses or accommodate hybrid school schedules. 

A winter survey from PASBO found that most school districts have seen their costs skyrocket while state aid flatlines and local revenue sources slowed or declined. The emergency funds from the federal government may allow many to avoid tax hikes – at least in the short term. 

A Department of Education spokeswoman said it’s up to schools to apply for the federal aid, and that it’s unclear what would happen if a recipient wants to relinquish their share. Schools that receive ESSER funds have to report how they spend it and undergo an audit from the Department of Education if they get more than $750,000.  

Cyber charter schools say that their expenses have also increased as a result of the pandemic. 

Hayden says PA Cyber has made technology upgrades and hired more teachers and support staff.

The school will likely cover the new personnel costs with revenue from public school districts, since federal relief funds are meant to be used for one-time expenses and programs. 

Hayden said PA Cyber intends to use all of its stimulus money in strict compliance with federal guidelines. And he expects there will be no shortage of initiatives that fall within its purview. 

PA Cyber has a sizable population of students who don’t have stable housing, Hayden said, and administrators are preparing for their ranks to grow if federal eviction protections expire this year. 

The school has provided those students with cell phones and other equipment to ensure they have stable access to their learning materials. 

Hayden said educators are also preparing summer curriculum, which aims to prevent learning loss – a need he said could be particularly acute following a year that brought unemployment, illness and death to students’ homes. 

“We’ve been consistent with our reaching, that doesn’t mean students’ home lives have been [consistent],” Hayden said. “We’re here teaching, but that doesn’t mean learning is as good as we would like it to be.”

Commonwealth Charter Academy, which is slated to receive $24 million under the most recent stimulus package, also said it would spend the cash according to federal law, though a spokesperson didn’t respond to follow-up questions about specific expenditures. Agora Cyber School did not respond to a request for comment. 

Hayden still admits that cyber charter schools have been blessed with good fortune this year. His school was already projecting a surplus when it set its budget last June. He says it’s typical for his school to end the year with a cushion, but expects that this year’s surplus will be bigger than in the past. 

“Can I say that every dollar we’ve received in additional revenue has been needed for expenses?” Hayden said. “No, it has not.” 

A ‘silver lining’?

Cyber school proponents and their critics agree on at least two things right now: that the pandemic is going to entrench remote learning in Pennsylvania, and that it will soon become much easier to assess the true cost of virtual education.

Some students who sought refuge in cyber charters schools this year may return to their public schools if they reopen this fall. Whether that will translate into big enrollment fluctuations next year is “the biggest crystal ball question that cyber schools are dealing with right now,” Hayden said. 

But public school advocates such as Spicka think that pupils across the state will expect some degree of remote education, even if they stay enrolled in a district school. 

Hundreds of Pennsylvania school districts were offering remote learning options before the pandemic shuttered schools last year. Many more spun up online academies at the start of the current school year, hoping they could compete with cyber charters and keep students – and their attendant tuition dollars – in their district. 

Public school officials have long said that they can offer online instruction more cheaply than their cyber charter competitors. 

A 2018 analysis by the Pennsylvania Association of School Administrators found that district-run cyber schools could educate students for an average of $5,000 per year – roughly half what it costs for them to send a child to a cyber charter school. That study didn’t evaluate their academic outcomes for students.

Charter critics such as DeJarnatt argue that cyber charter schools inflate the cost of educating children online. 

A paper that DeJarnatt published in January contends that Pennsylvania’s current method for funding cyber charter schools provides them with more cash than they need to educate students. She further argues that weaknesses in the state’s charter school law allows them to spend excess funds on advertising and expensive management firms. 

DeJarnatt’s research relies on cyber charter schools’ federal tax filings and year-end budget reports. Reporters have also used public records requests to piece together their spending on advertising and gifts for families.

But DeJarnatt said that a dearth of publicly available information makes it difficult to get a clear picture of their finances.

She’d like to see the state conduct more regular, rigorous audits of cyber charter schools. A review by the Scranton Times-Tribune in December found that six of the state’s 14 cyber charter schools have never been reviewed by state auditors. 

A Department of Education spokeswoman also confirmed Tuesday that eleven cyber charter schools are technically operating under expired charters. Cyber charters expire after five years, at which point schools must apply to the state for renewal – a process that includes a comprehensive review of their student achievement and financial operations. 

State law allows charters to remain in effect pending their renewal. But charter operators have complained for years that their applications languish while awaiting review from state regulators.

With a historic number of students now learning in online environments, DeJarnatt thinks it’s time for the state to redouble its efforts to regulate cyber charter schools. That should start, she said, by figuring out how much it really costs to educate a student online in Pennsylvania. 

Whether lawmakers want to convene a special commission to study the issue or tap an outside researcher, “we really need to figure out what the cost actually is,” DeJarnatt said. 

“Maybe the only silver lining to this huge COVID cloud is we might have more information about what it costs to provide a virtual education,” she added. 

Hayden thinks that the findings may not come out in school districts’ favor. 

Cyber charter operators say that their methods are time-tested: Schools such as PA Cyber and Commonwealth Connection have been in business for two decades, with no shortage of demand for their enrollment slots. 

They also say parents should take criticism about their academic performance with a grain of salt. 

Cyber charter schools perennially log lower student test scores and graduation rates than typical public schools. And a 2019 study by Stanford University found that students in cyber charter schools learn less on average than their demographically identical peers in brick-and-mortar charter schools and district schools. 

Cyber executives such as Hayden attribute that to a highly transient student body. Cyber charters accept students at all points of the school year, from anywhere in the state, he said. They see high levels of churn as students opt out of traditional public schools.

Hayden said that traditional public schools have dismissed cyber education “as cheap and easy.” 

But as soon as they had to offer comprehensive online learning themselves, “we hear all of a sudden that it’s expensive and hard,” Hayden said. “Hopefully there is a better understanding now that we do know and we are good at what we’re doing.”

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Elizabeth Hardison
Elizabeth Hardison

Elizabeth Hardison covered education policy, election administration, criminal justice and legislative news for the Capital-Star from Jan. 2019-April 2021. You can find her on Twitter @ElizHardison.