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RICHMOND — Carroll County in Southwest Virginia is known for its huge Labor Day flea market and its Blue Ridge Mountain vistas.
In the past year, though, its school system has also gained popularity, attracting students from Virginia Beach to Fairfax County.
What's the draw?
It's K12 Inc., a private online education company that uses Carroll County as its public school intermediary to provide virtual education through eighth grade for students across the state. More than 350 students are enrolled in K12's virtual academy through Carroll County, three times as many as last year.
All but four of those students live outside the county. Five are from Roanoke and five are from Roanoke County.
Yet because all of these children in the virtual academy are considered Carroll County students, the state spends more on some of them than it would if they attended bricks-and-mortar schools in their hometowns.
When Gov. Bob McDonnell last year pushed to expand educational options for Virginia's children, virtual classes were part of his overhaul package. But as online education grows, this wrinkle in how the state pays for these programs raises concerns among some legislators and teacher groups.
The students enrolled in K12 log in from their homes across the state. They never have to step into a Carroll County school. Their parents rarely speak to Carroll County teachers. Most of the contact is with K12's certified teachers, who work from their homes.
But because K12's partnership is with Carroll, a relatively poor county, in some cases the state provides as much as $3,700 more per pupil than the students' home school districts would get in aid.
Much of that goes to K12, a Herndon-based company that provides virtual education to children in 28 states and had a net income of $21.5 million last fiscal year, according to its annual report.
Those figures are worrisome and could mean higher costs for Virginia taxpayers as virtual education expands, said Sen. George Barker (D-Fairfax County).
"It's a really screwed up system," Barker said. "Here's something that is clearly cheaper. You have a larger number of kids per teacher. There's very little overhead. And yet, we're paying more."
The Democratic-led Senate is pushing to cap the Carroll County program at 350 students and cut funding for any new public-private online programs while the state studies how it funds these programs long term.
But Carroll Schools Superintendent Greg Smith believes Virginia should embrace the ability to provide students new educational options through pursuing these kinds of technologies.
The school division's implementation of the Virtual Academy of Virginia has made Carroll the one to watch.
"We are kind of the center of attention when this topic has been discussed at the state level — due to the fact that we are the only virtual school, we are kind of the experiment," the schools superintendent said. "Our advice is asked and our knowledge is sought after — since no one else has done this, we're the resource right now."
This same discussion about the impact on virtual schools could have on budgets has been ongoing, Smith said. Specific to Barker's concerns is that virtual schools may lure students from the Fairfax school system.
Big school systems like Fairfax has advantages like being able to offer students many programmatic options in its classrooms, he continued. But Smith feels that Fairfax also could lack the personal connection with all of its students.
The virtual academy allows students to get individualized interactions, such as regular contact with teachers, contact between parents and educators, the ability to monitor a student's progress and even field trips. Smith noted when Carroll educators visited Richmond during a recent legislative day, the VAVA students were at the Capitol, too.
With the governor and others supporting expanded educational options for students, Smith believes the virtual academy will continue.
Other schools want information on how to start their own virtual program, but this legislation would block further expansion. Carroll schools worked with the Virginia Department of Education in launching the online academy.
In fact, Smith believes that Virginia should sponsor a virtual learning program of its own, noting technology has made this a viable alternative for the state's 26,000 home school families.
"I believe in the traditional bricks and mortar system, but I also understand that the traditional classroom does not work for everyone," he said. "So we should offer students an alternative to the traditional bricks and mortar classroom."
All today's students will likely end up taking online courses. "We should explore every possible option for our learners."
The McDonnell administration opposes the students cap in the legislation and is working with budget negotiators to ensure that the programs expand, said Jeff Caldwell, a spokesman for the governor.
(Carroll schools already voluntarily limit the virtual academy to 400 students. Smith does not know how the proposed cap of 350 students was arrived at.)
Currently, how much Virginia spends on the virtual academy program is based on the cost of educating a child who lives in the district where the program is offered. In Carroll County, the state pitches in more money to help because the poverty levels indicate that the local government cannot spend that much.
During 2008-2009, the most recent year that data were available from the Virginia Department of Education, the state contributed $5,612 for each Carroll County student. During that same time, the state spent $1,885 per pupil in Fairfax County, $4,459 in Virginia Beach and $5,521 in Norfolk.
Local divisions, including Carroll County, do not have to contribute any money to the K12 virtual academy, and the program is essentially free to parents. Carroll County does charge out-of-district parents a $500 enrollment fee, but low-income and military families can get waivers.
Under Carroll County's contract with K12, the district gets 6.5 percent of what the state pays for the program. A division employee helps coordinate the program, along with other responsibilities, Smith said. This year, the division expects to get just under $100,000, through its partnership with K12, he said.
Virginia's current policy encourages private online companies to partner with rural or poor school divisions that get more state funding, because doing so maximizes their profits, said Rob Jones, a lobbyist for the Virginia Education Association.
"The Senate approach stops the manipulation," Jones said.
He argued that the state needs to determine the actual cost of virtual education and pay accordingly. For example, independently purchasing the teacher-supported K12 program for a third-grader costs about $3,500, according to the K12 website.
That doesn't include the costs of administering state tests and data-keeping, school officials said.
The idea is "in no way to disincentivize virtual education," Jones said, "but to not be in a situation where the state's bank is robbed."
Suzanne Sloane, the head of K12's virtual academy program in Virginia, said the Senate's proposal goes "in the wrong direction."
Last year, hundreds of Virginia parents approached K12 about the virtual program, but since Carroll County has a self-imposed cap of 400 students, many of them couldn't be accommodated, Sloane said.
The company is discussing partnerships with several other school divisions about a virtual academy for the next school year, Sloane said.
Angela Then, a Chesapeake mother, would like to see the program expanded to high school. She enrolled her two daughters in the virtual academy because they are competitive gymnasts and their schedules are too hectic for traditional schools.