Betsy DeVos Champions For-Profit Schools That Are Deceiving Taxpayers and Vulnerable Students

Last school year, Ohio’s cash-strapped education department paid Capital High $1.4 million in taxpayer dollars to teach students on the verge of dropping out. But on a Thursday in May, students’ workstations in the storefront charter school run by for-profit EdisonLearning resembled place settings for a dinner party where most guests never arrived.

In one room, empty chairs faced 25 blank computer monitors. Just three students sat in a science lab down the hall, and nine more in an unlit classroom, including one youth who sprawled out, head down, sleeping.

Only three of the more than 170 students on Capital’s rolls attended class the required five hours that day, records obtained by ProPublica show. Almost two-thirds of the school’s students never showed up; others left early. Nearly a third of the roster failed to attend class all week.

Some stay away even longer. ProPublica reviewed 38 days of Capital High’s records from late March to late May and found six students skipped 22 or more days straight with no excused absences. Two were gone the entire 38-day period. Under state rules, Capital should have unenrolled them after 21 consecutive unexcused absences.

Though the school is largely funded on a per-student basis, the no-shows didn’t hurt the school’s revenue stream. Capital billed and received payment from the state for teaching the equivalent of 171 students full time in May.

U.S. Secretary of Education Betsy DeVos has championed charters and for-profit education, contending in congressional testimony that school choice can lower absenteeism and dropout rates. But at schools like Capital, a ProPublica-USA Today investigation found, the drop-outs rarely drop in—and if they do, they don’t stay long.

Such schools aggressively recruit as many students as possible, and sometimes count them even after they stop showing up, a practice that can generate hundreds of thousands of dollars in taxpayer-paid revenue for empty desks. Auditors have accused for-profit dropout recovery schools in Ohio, Illinois and Florida of improperly collecting public money for vanished students. State officials in Ohio have twice chided Capital over indications of inflated enrollment numbers.

Told of ProPublica’s findings, both Ohio’s state auditor and its Department of Education said they would investigate Capital. EdisonLearning conceded extended absences are a “persistent challenge,” but said it shares all student attendance records in “real time” with state education officials. If issues arise, the company said, it addresses and corrects them.

The school’s program director, Monica Scott, defended her school’s efforts to combat truancy, saying during a tour of the school that its “lockstep protocols for absences” include calls, visits and letters to parents. She said she urges students, who often have difficult home lives, to come to class. “I’m telling them you have to get your instructional hours,” she said.

For those who arrive but head for the door shortly after, she added: “I do try to stop them.”

Corey Timmons, 19, who graduated from Capital this spring, said he had complained to Scott about students coming and going as they pleased. Those who did show up often goofed around on their phones or got into arguments. “It’s not really a school environment,” he said.

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 Across the nation, roughly 6 percent of young people ages 16 to 24 are considered dropouts because they neither attend high school nor hold a diploma. Many more teeter on the brink of leaving. Their challenges include homelessness, domestic violence, bullying and learning disorders. They fall off the degree track by failing too many courses or skipping too many days.

Facing pressure over graduation rates and test scores, regular high schools often don’t want these students. But they’re welcome at publicly funded alternative schools.

So-called “dropout recovery” schools are increasingly popular, with many setting up shop in poverty-stricken city neighborhoods. In Chicago this past year, about 8,000 students attended such schools. In Ohio in the 2014-2015 school year, more than 16,000 students did, including some who attended online-only programs.

For-profit school management companies like Capital’s parent, EdisonLearning, have rushed into this niche, taking advantage of the combination of public funding, an available population of students and lax oversight.

EdisonLearning and other for-profits sometimes sign contracts with local school districts to manage these dropout recovery schools. In Ohio and a few other states, though, companies have often operated them as charter schools, which are publicly funded but independently run. Nationwide, as of 2014, just 5 percent of all students attended charters, while 17 percent of alternative school students did.

Using call centers and other corporate tactics typically shunned in secondary education, the for-profit schools market and recruit intensely. They prod guidance counselors at traditional schools to send them failing students. They offer gifts and financial inducements to prospective students, as well as to pastors and current students who help reel in newcomers.

After pulling in students long enough to tap public money, many of the schools fail to keep them in class. In Ohio in 2016, for-profit companies ran nearly one-third of the state’s 94 charter schools for dropouts—but three-fourths of the 20 with the highest absenteeism rates.

“They were trying to get the children in, but didn’t know what the needs were,” said Monique Newburn, a former EdisonLearning special education teacher who worked at one of its dropout recovery schools in Chicago.

And like Capital, many dropout recovery schools rely on low-cost, computer-based academic programs. Critics say such software allows students, without much guidance from teachers, to “show up a couple of times to make up what took 18 weeks” of regular instruction, said Walt Gardner, a former teacher in Los Angeles who writes about education. “Something is not right here.”

The sector’s practices, from call centers to online courses, are reminiscent of for-profit colleges. For years, the colleges have faced criticism over their use of aggressive tactics to hook minority and low-income students. They rake in public money despite their soaring dropout rates, questionable educational quality and failure to deliver the lucrative post-graduation jobs they promise.

EdisonLearning and its competitors say their curriculum and instruction are well-designed to help borderline students earn diplomas and avoid the devastating consequences associated with quitting high school, such as lifelong unemployment and underemployment. Even detractors acknowledge that rescuing dropouts is difficult work, and a high rate of failure is likely.

Yet dropout recovery schools like EdisonLearning’s have incentives to inflate enrollment counts. Unlike traditional schools, they seek out the most unreliable students. They must hustle to attract enough enrollees, while traditional schools get a steady stream of kids from their residential zone. During surprise visits, Ohio’s state auditor found the gap between reported and observed enrollment was far greater in dropout recovery schools than in traditional schools. In 2015, auditors found, for-profits ran five of the seven dropout recovery schools with the biggest discrepancies.

Ohio doesn’t have education money to spare for ghost students: This year’s state budget froze or cut funding for most school districts.

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In 2011, NBA Hall of Famer Earvin “Magic” Johnson signed on to spread word of EdisonLearning’s newest enterprise: A chain of eight dropout recovery schools it had opened in Ohio the year before.

Johnson visited EdisonLearning schools and touted them in press conferences. Advertising urged students to “Join Magic’s Team” and included local events, ads on bus benches and direct mail—along with local radio, television and print spots. The company hung signs branding the schools “Magic Johnson Bridgescape” academies.

“I want to tell you about an option that you have that will help you earn a diploma and a more successful career,” Johnson told radio listeners in Cleveland. “Let me help you achieve your dreams.”

For EdisonLearning, the move to dropout recovery schools signaled a remarkable downshift in ambition. When launching the Edison Project 25 years before, media executive Chris Whittle and former Yale University President Benno Schmidt held out privatization as a fix for urban schools’ ills, as well as the future of American education. At its height, Edison managed dozens of schools in cities across the country, including Philadelphia and Baltimore.

Whittle and Schmidt left their administrative roles in December 2006. Money troubles and controversies over test scores, staffing and safety forced the company to scale back, redirecting its efforts to running small public schools aimed at high school dropouts.

Such strategies came up in a 2016 conference call on enrollment, according to an internal PowerPoint obtained by ProPublica. It recommended weekly “outreach to former schools of enrolled students (referrals).”

Hoffman said the efforts had mixed results. They succeeded more often in Ohio, which allowed traditional high schools to remove from their ledgers the test scores of students who transfer to charter schools. The pitches were less effective in Illinois, which held traditional schools accountable for students’ performance even after they switched to Bridgescape. With no benefit from letting students go, Chicago schools fought to retain students and the per-pupil funding they brought.

In a statement, EdisonLearning denied that it ever carried out the strategy described by Hoffman and the PowerPoint, saying that “there has been no outreach to traditional schools” to boost enrollment. The company said there have been cases of counselors reaching out to Bridgescape to see if one of its schools was a good fit for a student. Contacts that Bridgescape initiated with former students’ schools consisted mainly of requests for documents and transcripts, it said.

Courting counselors at traditional schools is a strategy that other companies in the industry have used, too. “Visit counselors before the winter break and bring a gift,” said a document obtained by ProPublica that was shown to employees at the Florida for-profit charter chain Accelerated Learning Solutions several years ago. “Take goodie bags on special occasions (Bosses Day, Counselors Week, etc.).” The document also suggested reminding traditional school staff that transferring poor-performers to ALS would raise the graduation rate.

In an email, ALS President Angela Whitford-Narine said ALS schools get referrals because of their reputation for helping students graduate. Gifts, she said, “are things like an occasional delivery of donuts and coffee” for school staff when ALS employees stop in with new promotional materials or updates on enrolled students.

Some schools have turned reliably attending students into marketers, offering rewards for posting plugs on social media, referring friends or writing positive online reviews. This spring, Ohio Bridgescapes awarded students gift cards for referring new enrollees and maintaining high attendance themselves. The company posted photos on Facebook of smiling students holding their prizes.

In Chicago, like other dropout school managers in major cities, EdisonLearning made connections with politically powerful African-American pastors on the city’s South Side who helped with recruitment—including organizing door-to-door campaigns. EdisonLearning paid some ministers thousands of dollars for their efforts, said Hoffman, the former marketing manager.

The company said that while a retired pastor in Chicago had served as an enrollment coordinator and worked on recruiting in neighborhoods, it was an “unfortunate misrepresentation” that EdisonLearning paid pastors to help it attract students.

Like many for-profit colleges, EdisonLearning also hired a call center to pursue leads. When it received the phone number of a parent or someone else who had shown interest—often through a website inquiry, Hoffman said—the Pittsburgh-based call center’s employees would call three times a day for 45 days before marking the lead cold.

John Kuhn, a former Chicago Bridgescape teacher, said the recruiting tactics by some for-profit dropout recovery schools made him queasy. “It shouldn’t be a thing where we have to aggressively market them,” he said.

A PowerPoint presentation last fall showed EdisonLearning’s intense focus on how many taxpayer dollars each student brought in. In one slide, company leaders estimated an increase of 108 students over five locations—including its Ohio virtual school—would capture $889,646 more a year. Each Chicago student would bring in another $10,000 per year, and each Ohio student, $7,500. A slide from another PowerPoint referred to Ohio’s monthly enrollment reporting deadlines as “pay dates.”

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In Ohio, EdisonLearning jockeyed with competitors for potential dropouts. The state had become well-known for loose charter regulation, with controversial players like White Hat Management lobbying against stricter controls. According to a report by two academics tracking the industry, more students attended for-profit charters in Ohio than in any state but Florida and Michigan—DeVos’ home state.

In this crowded field, EdisonLearning wasn’t attracting as many at-risk students as it had hoped, documents show, and there were early signs some of its schools were inflating enrollment. At Capital High in 2012, auditors found 90 percent of former students in a sample had not been withdrawn in “a timely manner.” (Withdrawn students are free to re-enroll.) Two other Bridgescapes returned nearly a half-million dollars to the state that year after it questioned their enrollment reports.

EdisonLearning acknowledged that, in the early stages, “both the academic and operational aspects of the schools were not meeting our expectations.”

Tenice Rogers, who worked as an office manager at Capital, said she tracked student attendance and took care to follow state rules, including that students be unenrolled after missing 105 hours (or 21 days for schools with five-hour sessions). “When they hit it, I withdrew them,” she said. If students showed up the next day, she said, “they had to re-enroll.” When students walked out long before the day’s session ended, she noted their absence, too.

But other employees at the school thought she should be more forgiving of partial absences—despite the state’s instructions, she said. “A lot of people felt like if a student showed up for two hours, they should get full credit,” she said. No one told her to change her practices, she said, but she sensed disapproval. “I’d let them know,” she said, “‘If you want it done this way, you’ve got to find someone else to do it.’”

In 2013, the company downgraded her job description to secretary. Where she had been making $35,000 a year, she would make $10 an hour instead. She couldn’t afford what amounted to a substantial pay cut and left for a job at Provost Academy, EdisonLearning’s virtual school in Ohio. Asked whether she felt the demotion was related to how she handled attendance, Rogers replied, “It might have been.”

EdisonLearning said: “It would be highly inaccurate and inappropriate to portray this situation as anything other than an adjustment of staffing resources.”

After Rogers left, concerns about Capital’s enrollment reporting resurfaced. In 2014, state auditors made unannounced visits to 30 charter schools across Ohio, and found some alarming differences between the number of students actually sitting in seats and the claimed enrollment levels.

In 2014, Capital High was among seven schools with the largest variances between its reported enrollment and actual attendance. Scott told auditors that about 70 students attended daily, with the rest rotating in and out just often enough not to be withdrawn. EdisonLearning said that auditors in Ohio and Chicago—who also challenged Bridgescape’s numbers—at times have not grasped its schools’ unique challenges and nontraditional schedules.

An internal EdisonLearning document obtained by ProPublica raises more questions about whether Capital overstated its students in reports to the state. A company spreadsheet charting withdrawals and enrollments in 2015-2016 shows that, on average, the student totals Capital submitted monthly for funding exceeded its internal tally by at least 24 percent.

Because enrollment is constantly changing, “a single snapshot of enrollment and withdrawals will more than likely not match” state totals, the company said. A recent state review praised Capital for “excellent” attendance procedures, but noted that students who never showed up in the fall had still been reported as enrolled. “I know I’m meeting the expectations,” said Scott, the program director.

Yost, the state auditor, said Ohio needs better security measures to prevent dropout recovery schools from manipulating enrollment data. “It’s just clear that the honor system of ‘trust us’ is not really working all that well,” he said.

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Located in a weathered strip mall on Columbus’ high-poverty West Side, Capital High occupies a one-story storefront with mirrored plate-glass windows. Students sign in at a counter, on a sheet preprinted with their names, before walking through a metal detector. Officially, the first shift begins at 7:30 a.m., the second at 11.

The central hallway and the classrooms off it feature the subdued blues, greens and grays of Bridgescape’s logo. There are no sports teams, band or orchestra, or art classes, but the school stages its own prom and takes students on occasional field trips.

“It’s so normal in urban areas that their world is so small,” said Scott, whose left arm bears an ankh tattooed above the word “balance.” “We work super hard to try to make it as rich as possible.”

While the school employs seven teachers and offers some small classes, most students are supposed to work for the full five hours on computers.

Timmons, the recent graduate, said the software at Capital often had typos and glitches. “Most of the online courses were very misleading,” he said. “If you asked the teachers about it, they would say, ‘We didn’t make it, just Google the questions and do the best you can.’”

Many students wouldn’t bother reading the questions on the short multiple-choice tests required to advance in a course, he said. Instead, “they would keep clicking till they got it right,” he said.

EdisonLearning officials said there have been “few incidences” of typos in its software and that the company corrects them when schools report them. Teachers “lock” tests after three attempts, they said, and have students work one-on-one or in small groups.

Juvenile probation officers in Franklin County, where Capital is located, have formed negative impressions about some of the dropout recovery schools—which many of the teenagers they supervise attend. The officers visit the schools to meet with those students or check on their attendance and academic progress.

“We have a couple good programs here and a couple of not-so-good programs,” said Diane Mueller, chief probation officer for the juvenile court. “Clearly anything that’s more structured is helpful for the kids.” By that, she said she means students are expected to arrive and leave at certain times, and teachers are available.

“I think all of our POs have concerns about the charter schools,” she said.

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Ohio’s Department of Education defines “chronic absenteeism” as missing more than 10 percent of the school year for any reason. During their time at Capital, all but four of the 502 students enrolled at some point during 2015-2016 met that threshold.

Matthew Knight’s attendance record is typical. Around noon on that Thursday in May, his mother, Lisa Brandon, dropped him off in Capital’s parking lot. A shy 15-year-old who was placed in gifted classes as an elementary student, he started cutting classes at his traditional public high school and then refused to go at all, complaining he was being bullied and some students reeked of marijuana, his mother said.

He enrolled at Capital in the fall of 2016. About six months ago, the family became homeless, Brandon said, making it hard for her son to get to school. She said that since October, he’d missed “45 to 50” days. “A whole month of time we did not go to school,” she said.

Knight told his mother that he had a guidance counselor’s permission to keep up from home by logging in online. In fact, Capital doesn’t have state approval for such an arrangement. A county social services counselor soon warned her that Knight was considered truant and needed to start physically attending school immediately.

Capital had robocalled her, Brandon said, but hadn’t made a personal call or sent a letter to her mother’s mailing address, which she provided. “I felt like they dropped the ball a little bit by not saying, ‘He’s truant, why is he not here?’” she said.

Brandon has since made extra efforts to take Knight to school. But he doesn’t stay full days. She said he typically calls her an hour or two after she drops him off, or walks to an aunt’s house. “He gets to leave when his assignments are done,” she said. “I guess it is easy for him.”

Scott said her desire to make school accessible to students with commitments at work and home has led her to “allow them to flex a little bit more.” Some leave to eat, and one insists on going home to use the bathroom.

“A lot of students have different specialized schedules,” she said. “It’s hard to keep track of it.”

Being flexible also means liberally granting “excused” absences, records show. They reset the clock, enabling Capital to legally bill the state for students who miss more than 21 consecutive days of school. In April, the school marked 13 percent of absences as excused.

Scott made improving attendance a goal in an annual school performance review in 2015-2016. “Ensure staff is meticulously charting absences,” the document said, “and communicating with students and families to decrease unexcused absences.”

Knight, who entered Capital at the age of 14, also illustrates a controversial tactic that the school increasingly depends on to boost enrollment and state reimbursement—enrolling younger students.

The school’s charter contract allows Capital to enroll students in grades 9-12 “and/or” ages 16-21. After denying Capital had any students under 16, EdisonLearning later conceded some were 14 or 15.

Scott said the state allows 12 percent of Capital’s students to be under 16. But she said she often tells young students they will miss out on experiences like homecoming if they leave traditional high schools. “These kids want instant coffee,” she said. “I push them back because, ‘Give it a chance.’”

Educationally, mingling younger teens with students in their early twenties may be unwise. A state task force report in July on dropout recovery programs warned that a broader age span could pose problems because “the developmental difference between 14-year-olds and 21-year-olds may be too great.”

But with students departing in droves—337 students withdrew, while just 270 enrolled during the 2015-2016 school year—Capital can’t afford to limit itself. EdisonLearning officials acknowledged that they’re worried about attrition, and said their efforts to retain students “far outweigh” their attention to recruitment.

Former Chicago Bridgescape teacher Kuhn said most of the younger students lacked the maturity to complete hours of lessons independently on computers.

“Anyone who came in as a freshman or sophomore had a really long way to go,” he said. “I wasn’t hopeful for their future at our school.”

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State regulators often set a lower academic bar for alternative schools than regular ones. But Ohio’s 94 dropout recovery schools have struggled even to attain less rigorous goals.

About 40 percent of the schools failed to meet state standards in 2015-2016. While Capital High passed overall, meeting state testing and other goals, its students didn’t make satisfactory academic progress. At 92 percent of Ohio’s dropout recovery schools in 2015, the graduation rate was below 50 percent. Capital’s was 23 percent. In 18 schools, including Capital, students skipped at least once every two days.

Beginning this fall, new rules will make it easier to shut down dropout recovery schools that repeatedly fail, said Aaron Churchill, Ohio research director for the Thomas B. Fordham Institute, which oversees some Ohio charters. Because their students bring so many challenges with them, dropout recovery schools are hard to evaluate, he said.

“I don’t think we’ve got it completely perfect on how to hold dropout recovery accountable,” Churchill said. “I think that’s one of the issues Ohio and other states need to work out.”

The state task force recommended adding new criteria for schools such as attendance and course progress, and having traditional and dropout recovery schools share accountability for students. Ohio education officials said the state is also requiring new intervention plans for students who miss too many days.

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In the summer of 2016, EdisonLearning ended its partnership with Magic Johnson and removed his name from schools’ signs. Officials with the company and Magic Johnson Enterprises said the five-year agreement “mutually concluded.”

“Mr. Johnson was personally committed to the Bridgescape program,” Magic Johnson Enterprises said in a statement, “and proud of the success the vast majority of students showed in their educational growth.” Johnson even pledged to pay personally for one Chicago Bridgescape graduate’s college education, the company said.

EdisonLearning—which sold off a chunk of its business in 2013—posted a significant loss in the 2016 fiscal year and has closed Bridgescapes in Illinois, Ohio and Virginia.

But it is still bullish on dropout education. In January, according to a company press release, it “doubled the size of our Alternative Education portfolio,” buying a chain of six for-profit charters in Florida called Mavericks in Education. Mavericks has been investigated in recent years for problems that included overstating attendance numbers.

At Capital High on that unseasonably hot Thursday, students drifted out early in the afternoon. One was Sabrina Blevins, 18, who came to Capital as a sophomore when she had a hard time keeping her grades up at her previous high school.

Blevins showed up at noon and left around 1:30 p.m., carrying a packet of algebra worksheets to her car. She usually leaves early for her full-time job at McDonald’s—though on this afternoon, she was off work. “PM is pretty chill,” she said.

Blevins has missed school for weeks at a time: “I’ve hit the limit a couple of times.” But she always came back without having to re-enroll, and hopes to graduate in December, she said, adding, “There’s a lot of kids, they just disappear.”

Hannah Fresques contributed data analysis to this report.