Students at one of the state’s two brand new virtual charter schools are dropping out at a rate that exceeds the maximum allowed by state law, according to a report authored by the North Carolina Office of Charter Schools.

North Carolina Connections Academy, a virtual charter school backed by education technology giant Pearson, reported a student dropout rate of 31.3 percent for the 2015-16 academic year. State law says virtual charters can’t exceed dropout rates of 25 percent.

Both of the two virtual charter schools’ dropout rates exceeded the statutory maximum when not considering “finite enrollees” in their calculations. It’s up to the virtual charters to select who they believe those enrollees are in accordance with state law, which says finite enrollees are students who indicate in advance that they wish to enroll for just a portion of the school year.

When K12, Inc.-backed NC Virtual Academy excluded finite enrollees from their calculations as the law allows, they then met the statutory maximum dropout rate at exactly 25 percent.

Both schools demonstrated poor academic outcomes for their students this past academic year, each receiving F school performance grades in math and Cs in reading. They were also categorized as low performing schools, a designation that requires them to submit a strategic improvement plan. Both schools also received the lowest possible score for student academic growth, a 50 on a scale of 50-100.

The status report, which must be presented annually to a legislative oversight committee following each year of the virtual charter schools’ four year pilot program, was only briefly discussed by members of the Charter School Advisory Board this week. The CSAB approved the report and sent it on to the State Board of Education for their review without discussing the high student dropout rates for both the two virtual charter schools.

Students across North Carolina can attend virtual charter schools from home using a computer connected to the Internet. Each student must have a “learning coach,” typically a parent, who is responsible for monitoring the student daily.

Steven Walker, general counsel for Lt. Gov. Dan Forest and a member of the Charter School Advisory Board, led the discussion of the report on the virtual charters’ performance. He said on Thursday that there simply wasn’t a whole lot to discuss.

“The State Board of Education just wanted us to take a look at the report and make sure the data was accurate,” said Walker. “They didn’t want us to make recommendations.”

When the State Board of Education takes up the report at their December meeting, the law would allow them to take action against NC Connections Academy based on the fact that their dropout rates exceed the 25 percent maximum set by lawmakers back in 2014.

The board has the discretion to either defer or terminate the school’s efforts to expand enrollment, or they could terminate the pilot program for that school altogether—although the statute does not legally bind the board to take action.

“The State Board of Education needs to take this seriously and take their options seriously,” said Leanne Winner, government relations director for the NC School Boards Association.

“This is not only an issue with the two schools in North Carolina, but also a demonstrated issue with virtual schools across the country,” said Winner.

Virtual charter schools have not performed well on the whole. A recent study conducted by Stanford’s CREDO found that students attending virtual schools didn’t learn anything in math for the entire academic year, and poor performance by these schools even prompted the NCAA to announce it will no longer accept coursework in its initial eligibility certification process from 24 virtual schools that are affiliated with K12, Inc. Tennessee has sought to close the K12, Inc.-backed virtual charter school there.

Even more troubling to Winner is the fact that beginning with this academic school year, 2016-17, lawmakers enacted four additional exclusions to the withdrawal rate calculations. They are the following, as outlined in statute and in the charter report:

(1) Students who regularly failed to participate in courses who are withdrawn under the procedures adopted by the school.
(2) Students no longer qualified under State law to attend a North Carolina public school, including relocation to another state.
(3) Students who: (i) withdraw from school because of a family, personal, or medical reason, and (ii) notify the school of the reason for withdrawal.
(4) Students who withdraw from school within the first 30 days following the date of enrollment.

These new exclusions provide the virtual charter schools exceptional latitude in allowing them to exclude nearly anyone who drops out of the online schools from actually being counted in the withdrawal rates going forward. That means it’s possible that the virtual charters will demonstrate a significant drop in withdrawal rates after this first year—even though those figures may not be truly capturing the full scope of who is leaving the programs.

“Because of these statutory changes for the next school year, we’re putting window dressing on all of this,” said Winner. “We won’t be able to see a full and accurate picture of what’s going on in these schools.”

The virtual charters have also been given greater latitude when it comes to recording student attendance.

Last year, the State Board of Education approved a policy that allows the virtual charter schools to avoid recording and reporting daily student attendance and stipulates that the virtual schools would only lose their state funding for a student if he or she fails to show any “student activity,” —as defined by the for-profit charter operators—for at least ten consecutive days.

Lee Teague, who heads up the advocacy group NC Public Charter Schools Association, said that virtual charter schools are new and everyone is still trying to figure out the best way to measure their performance.

“There is a role for [virtual charter schools] in this state, but exactly what that is and how they should be measured is proving difficult,” said Teague. “I wouldn’t want to send my kid to a virtual charter but there are children for whom this would be a best option. And this is what this is what the charter movement is about, providing a whole menu of choices.”

More to come next month as the State Board of Education considers how it will hold NC Connections Academy accountable.

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