Think virtual schools are a good idea? They may prove to be. One thing they aren't -- at least for the moment -- is profitable. I think it's a highly questionable proposition that they will ever be profitable, but for now, they're nowhere close. From the Milwaukee Journal-Sentinel
With a contract to open the first statewide virtual high school before them, the mood of the members of the Waukesha School Board at their January 2004 monthly meeting was effusive.
A cost simulation showed that the school - called iQ Academies at Wisconsin - could start generating as much as $1 million for the school district by the 2006-'07 school year.
School Board members gushed.
"Pretty sweet," board member Daniel Warren said about the numbers.
A little more than a year into the iQ's operation, however, the school has yet to come close to matching the board's high hopes.
Expected to run $1.2 million in the red by next summer, the school faces possible closure unless administrators show they can stop the financial bleeding.
"There are not a lot of options," Warren said in a recent interview. "One option is to not proceed in the third year, to shut the program down because it's not working financially for us."
What has happened with the Waukesha school caught not only its board members but other school officials in the state off-guard.
And it raises questions about a previously uncontested notion about virtual schools - that they save money.
"I think the assumption was everybody saw it as a quick way to make a dollar. And it's not," said William Harbron, superintendent of the Northern Ozaukee School District, which runs the Wisconsin Virtual Academy.
There's at least one company that still thinks virtual schools will eventually make money and is banking a lot on that theory: K12. Formerly run by Bill Bennett (till the outcry over his suggestion that aborting black babies would reduce crime rates forced the company to break ties with him), the company is still trying to turn a profit off of on-line classes:
As it has expanded to become the country's largest operator of online public schools, K12 has yet to turn a profit, said Jeff Kwitowski, the company's director of public relations.
But much of that is because the company is still developing its product, a full K-12 online curriculum with associated materials, he said.
"We're not looking to make profit off the management side," Kwitowski said. "Our product is where we're going to eventually be successful. . . . Then we're going to, I think, see our product kind of take off and sell itself as districts are saying, 'Hey, this is great stuff.' "
It better be really great stuff or K12 is in really big trouble. I think there is a market for virtual classes, but I think that market -- for now -- is very small. The K12s of the world are trying to create a market with their product rather than creating a produce for a market that already exists. That's hard to do. There is very little demonstrated need for virtual classes no matter what K12's PR people say. The numbers don't lie. Districts should absolutely hold off on developing anything more than extremely small-scale pilot projects until there is no doubt that there is a need for the product.