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Online Learning Vendor/School Contracts: What’s the Substance?

Posted on Jul 1, 2014

These days it seems every school district wants its own online or blended learning program – if only to compete with charters and statewide schools. To do online/blended learning right, though, districts need to start with clear educational goals and then line up the specific curriculum, instructional, and training resources they need to achieve these goals.

John Watson, Keeping Pace, 2014 blog[1]

Growing Pains

American traditional public schools are looking more and more to provide online learning opportunities for their K-12 students. You can see this trend in the popular literature (i.e., newspapers, magazines, blogs, etc.) and more importantly in the public policies of 44 states authorizing and even mandating online learning (e.g., Arkansas HB 1785, Arizona HB 2129, Colorado SB 139). Many states and districts across the U.S. use either not-for-profit entities (e.g., regional education service agencies such as BOCES, universities, etc.), for-profit entities (e.g., educational management companies), or both public and private entities to develop and implement these online learning opportunities. For example, Michigan Virtual School is funded by the Michigan Legislature to be operated by the Michigan Virtual University, a private, not-for-profit entity, and Michigan Connections Academy is operated by the for-profit subsidiary of Pearson, Inc., Connections Academy.

There is an ideological debate in the United States about the use of for-profit management systems in our public education. This is evidenced by the National Education Policy Center’s (NEPC) Virtual Schools in the U.S. 2013 report[2] and Keeping Pace’s John Watson’s rebuttal to NEPC’s findings. NEPC’s report states: “Given that some for-profit companies now enroll more than 10,000 students, policymakers should impose caps on student enrollment at schools run by such companies until evidence of satisfactory performance for a provider is available.” (p. ii) The Keeping Pace response was: “If one is arguing that schools that are performing poorly should be shut or capped, should that argument not apply to all schools? Why does size of school or management organization matter? Why does for-profit status matter?[3] (KP blog, June 23, 2013). The debate has moved to the courts. Louisiana’s House Bill 976[4], also known as Act 2, authorized the “Course Choice” program where for-profit and public course providers are approved to offer about 1,500 online, blended, and face-to-face courses. These providers include large companies such as K12 Inc., Florida Virtual School, and Sylvan, and five public school districts and every public college and university in Louisiana. Teachers unions challenged the constitutionality of the law specifically around the funding. A district judge ruled the program unconstitutional, saying that the funding method unconstitutionally diverts public funding to private enterprises. The state education agency is appealing this ruling to the Louisiana Supreme Court. (The Times-Picayune, January 12, 2014)

Typically, information about online learning curriculum, instructional strategies, learning management systems, outcome data and other aspects of online learning that are run by public agencies such as school districts are public domain. It has proved more difficult to find information about aspects of online learning when states or districts contract out these services. The Center on Online Learning and Students with Disabilities, a federally funded research project operated out of the University of Kansas, was interested in learning about agreements for providing online education that districts have with companies. We obtained 19 agreements from districts in two states. These agreements were with six different companies. We reviewed each of the contracts and extracted a few commonalities that we found interesting. We thought others might be interested as well.

What’s all the Fuss?

In general, each of the contracts described that the company would provide the following to the district/school: curriculum; teachers or staff; a learning management system (LMS); and reports based on data gathered from the LMS. A large majority of the schools were charter schools; that is 17 out of the 19 contracts were with charter schools. All 17 of these charter schools were operated as fully online schools. Charter schools are publicly funded schools that are usually governed by a group under a ‘charter’ with the state or local school district. The charter exempts the school from select state or local regulations. In return for these exemptions, the charter school must meet certain standards described in the approved charter. A fully online charter school would deliver most, if not all, of the students’ education through the internet at a location other than a school. The other two contracts were between lesser used companies and one traditional district for the online portion of blended classes. Blended classes refers to classes that use both traditional teaching and learning and online programs for instruction and/ or curriculum. While the specifics were different, three topics were common to the contracts: 1) adherence to “applicable laws”; 2) provision of instruction or teacher; and 3) reference to intellectual property.

Applicable laws

All of the contracts reviewed mentioned adherence to applicable laws. When defined, the companies described these laws as federal laws such as the Elementary and Secondary Education Act (ESEA), the Individuals with Disabilities Education Act (IDEA), and the Family Educational Rights and Privacy Act (FERPA). Most of the contracts (15 of 19) did not mention special education specifically. The four that did specify special education services, beyond adhering to IDEA, were highly used companies. See the Center’s matrix for Voluntary Product Accessiblity Templates, category of “content/learning management”, for a listing of many well-known and highly used online learning companies at These contracts described the responsibility for special education to fall on both the company and, to a smaller degree, the school. For instance, one highly used company’s two contracts stated that the company will “follow the Individualized Education Program (IEP).” Another highly used company’s two contracts stated that the company will be responsible for providing special education and related services and handling due process hearings. The two lesser known companies mentioned providing a personalized learning plan for all students, but nothing specific about the special education IEP. One lesser known company only discussed special education in regards to funding. This company required the school to pay the company approximately $2,000 per special education student they serve in the general class and $4,000 per special education student in a self-contained class.


Eight of the 19 contracts mention that a certified or qualified teacher must be provided. Only two contracts, including one highly used and one lesser known, locally based companys’ contracts, mention teachers in regards to provision of instruction. Five of the contracts state that a certified teacher must be available to contact students. Four of the eight contracts that mention certified or qualified teachers waive the requirement for a certified teacher under certain circumstances, such as if a class does not meet enrollment quota.

Intellectual Property

Each of the 19 contracts reviewed state that they own all intellectual property. This term is defined differently across the contracts, but most include the curriculum, LMS, tools, and company logos. One highly used company used the term data under intellectual property that the company owns, but appears to include only the data that can be considered legally ‘proprietary’ such as tangible and intangible materials, methods, lists, names, processes, and technologies.


This review sheds light on some possible pitfalls that schools might stumble into. First, only two of these contracts mentioned anything about how instruction would occur. While all of the contracts included provision of an LMS, none of the contracts made reference to the purpose of the contract being to educate students and focused instead upon providing access to data from the LMS. Second, these contracts tend to be unclear about how students with disabilities and other high need students will be ensured equitable access to the program offered. While some of the contracts note generally who is responsible for special education, nowhere in any of the contracts is there language that addresses how the most difficult to serve students will be supported to use and learn from the materials, curriculum, and instruction provided online. For instance, if a student with significant visual impairments or blindness enrolled in one of these school’s online program, how would that student be supported to use the technology, request assistance, and access the text and image portions of the curriculum? How would students with significant intellectual disabilities access these same aspects of the online program as well as the content at their instructional level?

It is apparent that online learning programs (both fully online and versions of blended learning) continue to be developed and the education community, including parents, continues to seek out these options. Still, this online learning trend is in its infancy, making it incumbent on all parties involved to ensure that business arrangements like the contracts shared in the paper are not inadvertently decreasing access to learning or in any way diminishing federal and state laws that protect all of our public school students.


The Times-Picayune (January 12, 2014). Retrieved May 21, 2014 at

[1] To access Keeping Pace’s 2014 blog, go to

[2] For a copy of NEPC’s Virtual School report, go to

[3] To access Keeping Pace’s blog, go to

[4] To review Louisiana’s House Bill 976, go to


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