Dive Brief:

• The Office of California Attorney General Kamala Harris secured an $8.5 million settlement from virtual charter operator K12 Inc. following accusations of false advertising, misleading parents, and inadequate instruction in its California charter schools.
• The Los Angeles Times reports K12 and the California Virtual Academy did not admit wrongdoing under the settlement, but the company committed to establishing new training and oversight measures, and it will provide debt relief to the charters it runs, limiting its power over them.
• While K12 Inc. denies the allegations, its schools were accused of misleading parents when telling them they offered all the courses needed for admission into public universities in California and that they provided individualized learning plans for all students.

Dive Insight:

K12 Inc. has been involved in lawsuits all over the country. It has been able to partner with charter schools directly in states that allow for-profit companies to do so, including California. Like in Illinois and other states, K12 Inc. has been accused of effectively creating shell nonprofit boards and then starting schools that they ultimately get all the contracts to run. According to the Los Angeles Times, California has an extra benefit for school districts that approve their charter school proposals — a 1-2% share of revenue.  

K12 executives have called the Attorney General's characterization of the settlement "flat wrong," saying debt relief was not on the table. Instead, said a company spokesman, $6 million was awarded to recoup the cost of the investigation, in addition to a $2.5 million settlement, bringing the total award amount to $8.5 million.

Still, virtual charter operators continue to be a source of controversy. Last month, three national charter school organizations took a stand against virtual charter schools, attacking their student outcomes and calling on states and districts to make renewal and closure decisions based on progress toward academic goals.