Fuzzy Funding of Online Delivery

by Ruth Sternberg

The costs of running online schools have inched toward the center of school funding debates in some states. In a few states cyber schools, as they're known generically, are developing to such a degree that state spending is increasing rapidly.

In Colorado, where education costs have increased 66 percent in a handful of years, the legislature is investigating cyber-school expend-itures to determine how much of the budget should be reasonably spent on them. In Pennsylvania, where more than 13,000 students attend online charter schools, superintendents have already challenged lawmakers to re-examine the way cyber charter schools are funded.

Charter schools in that state get a payment based on the overall spending of the districts where their students live. The result is a per-pupil payment that reflects about 80 percent of what it costs to educate a child in that district. These payments can range from $5,000 to $12,000, depending on district size and expenditures.

But a bill introduced in Pennsylvania within the last few months would restructure this funding distribution, basing payments on the size and quality of the online programs. The proposal was spurred by the Pennsylvania Association of School Administrators. The bill proposes that cyber schools serving 1,000 or fewer students would receive $5,000 for each student, with extra funding for those in special education. Schools serving 1,001 to 4,999 students would receive $4,000 for each, and schools with enrollments of 5,000 or more would receive $3,000 per student.

Stinson Stroup, PASA's executive director, testified before the state's House Education Committee and asked legislators to consider differences between the various charter programs, perhaps developing a fee scale that considers cost and quality.

"It is difficult to compare the cost of cyber school programs across states," Stroup told legislators. "We are not suggesting that high-quality cyber instruction is cheap. The cost of program development can be substantial, often more costly than for traditional courses. And if there is a lot of online interaction between the teacher and each student, the cost of delivery can be expensive. But if your students are home schoolers who don't want (online teacher) supervision, the cost isn't the same."

Cost Disputes
A study of several statewide cyber programs conducted on behalf of Bell South and due for official release this summer shows that the average startup costs for an online school is $1.6 million. But Stroup argues the potential for cost savings over time is greater than with a brick-and-mortar program. Cyber schools donÕt have the same operational costs as traditional programs, such as maintenance and security. And online schools tend to have fewer teachers and administrators.

Furthermore, a traditional school's program costs tend to remain constant, while cyber programs pay varying fees for their curricula. Some contract with online-school companies for pre-established curricula, others spend thousands to develop their own.

Stroup testified: "School districts that pay the bill for every resident student enrolled in a cyber charter schools pay the same thing regardless of the cost or quality of the cyber school program. ... Fees should reflect higher payments to those providers that develop curriculum uniquely appropriate for Pennsylvania's academic standards, that tailor programs to individual student needs and that provide the greatest personal attention and support for each learner."

Superintendents in many districts have complained that money is being taken from them and given to the cyber programs. Duff Rearick, chief of the Greencastle-Antrim School District in western Pennsylvania, says 21 of the district's 2,800 students left the district a few years ago for cyber charter schools, taking with them $7,000 each in state funding.

"It doesn't cost $7,000 a year to educate a child in cyber charters," Rearick says.
He and about 100 other Pennsylvania superintendents formed a consortium,, to offer school-district-sponsored cyber instruction. Their costs are around $2,000 per student, according to the program's director, Hervey Hann.

Cyber Counters
Cyber charter school operators counter that they don't get all the money a brick-and-mortar school receives. For instance, they don't get any grants that may become available for school improvement. They point out that regardless of their enrollment size, they have offices, Internet connections, instructional supplies and materials, teachers and administrators. Under state law, school programs also have to employ a nurse to be available for routine screenings and health questions, Hann says. Equipment replacement can also be expensive.

"It's ridiculous to say in terms of equity you should send a cyber or charter school less. They are already getting less," says Tim Daniels, director of Pennsylvania's 105-member Coalition of Charter Schools. He said his question to school districts is, "What are you doing with the money you are keeping when you dont have the kids?"

Pat Crawford, superintendent of the Bedford, Pa., schools says he isn't knocking the need for cyber schools. "We believe that virtual learning should be available to students, but it shouldn't be draining the resources of public school systems that are already strapped."