Maine’s first virtual public school will get its curriculum, online learning platform, human resources services and, in some instances, teachers, from a multinational publishing and education services giant headquartered in London.
While Maine Connections Academy may be a first in Maine education, nearly half of the schools in the United States use at least one educational product created by Pearson PLC, the largest education company in the world, with a publishing arm that includes the Financial Times, The Economist magazine and a sizable share of Penguin Random House. Its education services include student curriculum, instructional management and financial software packages.
Pearson’s reach into Maine is now moving to a new level.
Through its American subsidiary, Baltimore-based Connections Education LLC, Pearson will provide all the support for the nonprofit Maine Connections Academy, which was approved by the state’s Charter Commission on March 3 to oversee the virtual school. If the school’s charter is approved in April, it could enroll as many as 270 students by September.
Analysts say Pearson’s purchase of Connections Education in 2011 was driven in large part by the company’s efforts to keep up with technology that is disrupting traditional print publishing while giving it entry into the fast-growing virtual education market.
Some educators worry that Maine is essentially outsourcing education to a multinational corporation, a move that hurts the ability of local communities to oversee their children’s eduction and to assure that it corresponds with community values.
Pearson is “so massive in size. I don’t know who to start with to make sure it’s held accountable for the quality of education for our children,” said Amanda Cooper, a Gorham Middle School teacher and a mother of two elementary school students. “Who is playing watchdog for this?”
But Pearson and its supporters argue that large private companies – rather than local school districts or state governments – can create better and less expensive virtual schools because the companies have the deep pockets to develop hundreds of interactive online courses. In addition, they say, because Pearson operates on a global scale, its costs are spread out over a large number of users. Its virtual education division, Connections Education, is the second largest provider of virtual classes in the United States, serving 51,000 students in 23 states.
A DIVISIVE CONCEPT
In virtual schools, students learn largely from home, with lessons delivered online and only limited face-to-face interactions with teachers and administrators.
The company can afford to create online specialty classes, for example, that would be used by only a handful of students in Maine but hundreds nationally, said Ted Ochs, the chief operating officer and chief financial officer for Connections Education.
“We can leverage investment across many schools and students,” he said.
No public data are available for the financial performance of Connections Education. The company is about 1 percent of its parent company, Pearson, which in 2013 reported global sales of more than $8.4 billion.
The introduction of virtual schools to Maine has become a partisan issue, with Gov. Paul LePage and Republican lawmakers supporting Maine Connections Academy, and Democrats opposing it. Some Democrats, though, support the idea of a virtual charter school managed by the Maine Department of Education rather than a volunteer board.
Maine’s public school teachers, administrators and school districts widely oppose the new virtual school. Much of the opposition is focused on how the school will be funded. Maine law requires school districts to finance the education of students in the district who choose charter schools, with the charter school getting both state and locally raised money from the school district on a per-pupil basis, usually totaling between $8,000 and $10,000 a student annually.
The virtual school’s board of directors and officials with Pearson are still negotiating a final contract. It’s impossible at this point to establish a dollar value on the contract because the board doesn’t know how many students will attend or the districts where they live, said Amy Volk, a Republican state representative from Scarborough who co-sponsored the bill in 2011 that allowed charter schools in Maine.
Volk said seven Maine-based teachers will teach the core courses, while the company will provide teachers for specialty courses, such as a Mandarin language class. The board will rent office space for teachers and students to meet face-to-face every week.
Ochs said his company will charge fees for its services, such as its software platform, courses and support services, and those fees will amount to 55 percent of the total school expenses. In addition, the company will pay for other school expenses, such as teacher salaries, rent and state tests, and will then be reimbursed by Maine Connections Academy. Each student in the program gets a box that contains textbooks, science and art kits, physical education materials and a desktop computer.
School districts are angry that tax dollars will be going to an out-of-state company when the state has failed to adequately fund public schools in Maine, said Connie Brown, executive director of the Maine School Management Association, a nonprofit organization supported by school boards and superintendents. “These companies are going to take public dollars and make a profit on that. And they are going to give children a poor education. It seems like a lousy trade.”
GOOD FIT WITH CONSERVATIVES
A Maine Sunday Telegram investigation in 2012 of Connections and its main competitor, K12 Inc. of Herndon, Va., showed that Maine’s digital education policies were being shaped in ways that benefited the two companies, that the companies recruited board members in the state, and that their schools in other states had fared poorly in studies of student achievement.
The idea that a large, private corporation using digital technology to teach children efficiently fits well with the current ideology of conservative politicians who envision shrinking teaching staffs at public schools, said Alex Molnar, publications director at the National Education Policy Center, a nonprofit education policy research center located in the School of Education at the University of Colorado at Boulder.
Because Pearson is a publicly traded company whose primary mission is providing value to its shareholders, it has an incentive to lobby lawmakers to keep expanding the program, he said.
“If propelled by a desire for profits, inevitably you will see virtual education flooding into areas where they are not appropriate for education,” he said.
Maine, however, has lagged behind most states in taking advantage of new technology for online learning, said Tom Vander Ark, author of “Getting Smart: How Digital Learning Is Changing the World.” He said the state’s resistance is surprising because Maine a decade ago was a leader in providing laptop computers to every student in middle school, a project that required a partnership with another huge profit-making company, Apple Inc.
Vander Ark, who in the past has done consulting work for Connections Education, said the company is well run and will bring a lot of talent and experience to Maine.
“They are a great operator,” he said. “They are one of the most conscientious and ethical folks in the online learning space.”
The company that would become Connections Education began in 2001 as a spinoff business unit of a company called Sylvan Ventures, which saw potential in new online technology and the growing interest among parents for charter schools and homeschooling, Ochs said.
In 2004, that unit was sold to an investor group led by Apollo Management L.P., which in early 2011 created a new corporate entity called Connections Education to focus solely on online learning.
In the fall of 2011, Pearson acquired the company, paying $400 million in cash. Connections Education at the time had been posting consistent 30 percent year-over-year revenue growth and annual revenues approaching $190 million.
Pearson said the purchase gave the company a leading position in the fast-growing virtual school market and noted that the schools earned high satisfaction ratings from parents, with more than 92 percent of parents giving their school a grade of A or B.
In their efforts to create virtual schools, Connections Education and K12 Inc. have lobbied state legislatures and nurtured the creation of the independent boards for the proposed virtual schools they would operate and largely control, according to the Maine Sunday Telegram’s investigation.
The company today has more than 700 employees in three offices in the Baltimore area, and also employs nearly 3,000 teachers around the country.
Connections Education is still performing well, with a revenue growth last year of about 20 percent. But ironically, its parent company, Pearson, has recently seen its stock prices crash in part because of “disruptive technology,” a business term used to describe new technology, in this case the Internet, that allows small, startup companies to grab customers from established businesses.
That innovative technology is putting a dent in Pearson’s textbook publishing business, said Tim Nollen, an analyst at Macquarie Securities who follows Pearson.
As states change their curriculums to meet Common Core’s State Standards Initiative, which details what students should know in English language arts and mathematics at the end of each grade year, states such as New York are finding they can use free online content to create their own curriculum.
“They don’t need Pearson anymore,” Nollen said.
‘A ROLE FOR STATE OVERSIGHT’
Connections Education, though, is poised for growth because the education technology market is expanding. But there is a limit to that growth, Nollen said. Online education should not be seen as a threat to public schools because it’s going to appeal to a small minority of students, such as home- schoolers and students who are ill for long periods of time, he said.
The online school’s supporters say they can hold the company accountable for the performance of its students. The volunteer board of directors of the newly approved nonprofit charter school will monitor the company’s activities in Maine and has the power to cancel the contract with Connections Education with “reasonable notice,” a provision mandated by the Maine Charter School Commission.
“We will be very capable of holding the corporation’s feet to the fire in terms of performance,” said the board’s chairwoman, Volk.
She noted that the five-member board will hire an administrator to oversee the virtual school, although the company will do the initial review of all applicants and give the Maine Connections Academy board its top choices.
John Watson, founder of Evergreen Education Group, a consulting company in Colorado that helps school districts develop online learning programs, said that large companies are able to take risks and invest in unproven technologies because they have a higher tolerance for failure than a government agency, which would be punished politically for losing money on an investment.
He said states should set up systems for holding a company accountable for its performance. But ultimately, families will decide if an educational product works for them or not, he said.
“There is clearly a role for state oversight,” he said. “But we have to trust students and their parents can make good decisions about what is best for them.”
Tom Bell can be contacted at 791-6369 or at: