Web Feature: Costs, Funding and the Provision of Online Education

Policymakers are examining online schools as a way to expand educational opportunities beyond the classroom, particularly in school districts with weak or limited curricula.

In her chapter on online education for Virtual Schools: Planning for Success, a new book from Teachers College Press edited by Zane L. Berge, a University of Maryland education professor, and Tom Clark, an Illinois-based consultant, CNA education analyst Linda Cavalluzzo outlines the major issues education leaders should consider in launching an online school.

Online school planners should consider the design of the program, who would be eligible to enroll, and how the school would be funded. According to Cavalluzzo, decisions on issues like these affect not only program costs and access to high-quality education, but also have broader implications for vouchers and school choice.

Cavalluzzo’s piece reviews state models of existing virtual schools and the costs associated with their development and operation—from the Florida Virtual School (FLVS), a state-funded school that invests between $50,000 to $100,000 to develop a single course—to the more budget-conscious CCS Web School in North Carolina, which is run by the local school district. Development costs for CCS Web School run about $1500 per course.

In order to design a successful virtual school program, Cavalluzzo says education leaders must first identify the particular needs of their students that the program seeks to address and then tackle a range of issues involving cost and funding. For example, in developing an online school, Cavalluzzo found that districts or schools may want to develop their own courses, but would likely have an easier time opening one if they become part of a multi-district or multi-state consortium.

A virtual school run by a state can "act as a broker, selecting courses for quality and alignment with state standards from commercially available sources. States should be able to use their large size and vendor competition to obtain high-quality products at lower prices than districts would be able to negotiate on their own."

 

Using consortia and cooperative agreements has become even more of a necessity in the wake of the 2002 No Child Left Behind law and the financial challenges states face in implementing it, as state budget resources are increasingly squeezed.

Costs

According to Cavalluzzo, the bulk of public school funding—46 percent—comes from local revenue sources that are tied to property taxes and therefore, local wealth. So students in wealthier communities benefit from better resources, which in turn contributes to the education gaps among and within states and localities. Because the web-based classroom can cross geographic lines, it means a high-quality teacher and curriculum will be available to all students, regardless of their economic status. But a major barrier to this equality is computer access, which is far more common among middle- and upper-income families than it is among lower-income families.

Cavalluzzo’s chapter outlines several areas pertaining to the cost structure associated with establishing and maintaining an online school, including:

• Course development and maintenance
• Course platform and delivery, which includes the method by which the class is made available to students online and how the course is taught. Choices include whether classes are held via a live online discussion or using a threaded discussion, where students can log on anytime to contribute.
• Program management and administration
• Instructor compensation

MODELS

The chapter reviews various models for establishing an online school, including the "district-as-producer" model, where small school districts develop and maintain their own courses and limit costs by slowing the pace at which they introduce new courses or expand existing ones.

Using a consortia model, schools or districts can band together to share resources and keep costs low. Cavalluzzo highlights the Virtual High School (VHS) as a successful example of the consortia model. Each school in the group contributes "a new web-based course developed by a qualified teacher....Once the course is developed, evaluated, and approved, the teacher offers the course through the consortium. Enrollments are capped at 25 seats per course, and the contributing school receives 25 course seats that can be used, in turn, in any web-based courses offered by the consortium."

Other models, like the state model and state-as-broker model, allow schools and districts to save even more money by creating a larger consortia. A significant advantage in these models, according to Cavalluzzo, is that as long as student access is ensured, "across-district inequities in quality of content and instruction can be eliminated."

THE ROLE OF CYBER-CHARTER SCHOOLS

Charter schools, as an alternative to traditional public schools education, have fueled school reform debates for years.

Cavalluzzo writes that a concern about online charter schools is that "funding formulas do not take into account differences in the cost structure between brick and mortar and cyber-charter schools. Some of those schools have few teachers, and rely on parents to support their child’s instruction."

That prompts critics to question the use of public money on cyber-charter schools, which are "often run by not-for-profit organizations, tied to for-profit parent companies," and effectively amount to private education in the form of correspondence courses.

The same debate that rages about traditional brick-and-mortar schools has moved to the online version of the model—how should school districts address the issue of students moving away from traditional public schools and into cyber-charter schools, thereby taking public funding with them?

CONCLUSION

Cavalluzzo’s chapter in Virtual Schools makes clear that while online schools have the potential to expand the scope of public education by creating curricula and opportunities for children who are geographically or politically separated from larger or higher quality school systems, policymakers must take a careful approach to planning, design, and funding.

Most important, education leaders "must pay special attention to the far-reaching effects that state policies for online education can have on the shape of public education."

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References

Adapted from "Costs, Funding and the Provision of Online Education," in Virtual Schools: Planning for Success, Zane L. Berge and Tom Clark, editors:

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Augenblick, J., Myers, J., & Anderson, A. (1997). "Equity and Adequacy in School Funding." The Future of Children: Financing Schools, 7, 63-78.

Barnett Reed, Jennifer (2004, February 13). "Home is Where the School Is: But should the public pay for it? And how much is too much?" Arkansas Times, Inc.

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Cavalluzzo, L. & Higgins, M. (2001). Who Should Fund Virtual Schools? <>The Appalachian Technology in Education Consortium

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Minorini, P. A. & Sugarman, S. D. (1999). "School Finance Litigation in the Name of Education Equity: Its Evolution, Impact and Future, in Equity and Adequacy," in Education Finance, Issues and Perspectives. National Academy Press.

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Smith, Steve and Pettersen, Josiah (September 2002). School Funding - What's Enough? State Legislatures

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Virtual High School website. http://www.govhs.org/