The organization — Stride, formerly known as K12 — is a for-profit company that operates online schooling programs that function as alternatives to traditional schools, including the Kentucky Virtual Academy in the Cloverport Independent School District.
Critics have argued that House Bill 241 would allow those programs to operate free of enrollment limitations set by the Kentucky Board of Education.
The bill is another way for some GOP lawmakers to achieve school choice, critics say, and allow taxpayer funds to be used for programs other than public schools.
Gov. Andy Beshear did not say Thursday if he will sign or veto House Bill 241, which would also allow school districts to be forgiven for five required attendance days that were missed due to illness, weather and other problems.
Legislators return for the final two days of the 2025 session March 27 and March 28 where they can give more bills final passage and override any vetoes issued by the governor.
Cloverport Superintendent Keith Haynes on Wednesday confirmed Cloverport has paid Stride $8,559,324 since Kentucky Virtual School opened.
That includes $4,629,135 in 2023-2024 and $3,930,189 through March 12 of this school year.
“To be clear, though, those funds are used to pay the salaries of teachers and staff, as well as for professional learning, curriculum, student technology, etc. It is not a straight profit for Stride, as is sometimes unfortunately perceived or portrayed,” Haynes said.
Cloverport, in Breckinridge County on the Ohio River, receives state funding for the virtual academy based on average daily attendance. In the 2022-2023 school year, prior to the creation of the virtual program, Cloverport was a small district, with just 276 students.
For the 2023-2024 school year, the first with a virtual academy, enrollment increased to 1,227.
The district began this school year with 2,756 students.
As of Jan. 21, that number had jumped to 3,069, and Haynes said enrollment as of Friday was 2,600.
When students enroll in Cloverport’s virtual program, regardless of their district of residence, Cloverport includes the student in its average daily attendance.
That average daily attendance is factored into the formula for state funding, known as Support Education Excellence in Kentucky.
Jennifer Ginn, spokesperson for the Kentucky Department of Education, has said the district received about $1.8 million in SEEK funding for the 2022-2023 school year. That number jumped to about $6.5 million last year and jumped again to about $18.8 million this year.
Nearly 100 percent of that growth can be attributed to virtual students, said Kentucky Education Commissioner Robbie Fletcher. Stride is set to receive approximately three times the 2023-2024 payment for 2024-2025.
According to calculations provided by Cloverport Independent to the Kentucky Department of Education, Cloverport Independent received $4,879,135 in SEEK for their virtual students in 2023-2024.
According to the contract between K12/Stride and Cloverport, Cloverport keeps 3 percent of the SEEK funding for the virtual students or $250,000 (whichever is the greater amount) and K12/Stride gets 97 percent of the state funding for virtual students, Fletcher said.
Fletcher said Cloverport made three payments to K12/Stride in April, May and June of $1,543,045 each for a total of $4,629,135.
While operating under the name K12, Stride agreed to a settlement in 2016 over alleged violations of California’s false claims, false advertising and unfair competition law. Under the settlement, K12 had to provide about $160 million in debt relief to the non-profit schools it managed.
But both Stride’s company’s public relations manager, Cameron Bell, and Haynes previously told the Herald-Leader, that Stride had an outstanding record of transparency and compliance and had strong ethics.
House Bill 241, sponsored by Rep. Timmy Truett, R-McKee, originally addressed only the calamity days for school districts, but it was merged with another bill that would prohibit lawmakers from putting restrictions on virtual schools for several years.
RELIEF THAT HOUSE BILL 241 PROVIDES
House Bill 241 would provide five calamity days, as many districts statewide have been ravaged this school year by flooding, sickness, winter weather and the search for an interstate shooter.
The days would not have to be made up at the end of the year, but districts would need to add time on the end of the school day.
Districts that don’t use the calamity days could eliminate five low attendance days.
After the Senate made revisions to merge the bills, House Bill 241 now says state education officials can’t implement any cap, limitation, or enrollment restriction on virtual programs, or withhold any funds based on the district’s operation of a virtual program, until 2028.
The Kentucky Board of Education had sought an enrollment cap as Cloverport Independent School District, which has about 250 students enrolled in in-person classes and about 2,800 enrolled in a new virtual academy, came under fire for several issues.
Issues include poor test scores, failing to administer state tests to enough students and failing to comply with state regulations on class sizes.
Haynes and some lawmakers have said the cap, which would essentially limit the number of virtual students at 10 percent of a school district’s in-person enrollment, would have shut down the Kentucky Virtual Academy. Parents have said the program helped their children in a way that others could not.
In at least one instance, the bill waiting for action from Beshear puts fewer limits on virtual schools.
Joe Ragusa, a Kentucky Department of Education spokesperson, has said that for middle and high schools, the law previously limited teachers to no more than 150 pupil hours per day, unless a school decision-making council provided for a larger number.
That serves as a class size maximum for those teachers at the middle and high school level who teach multiple classes per day with different students in each class.
Pupil hours are calculated by multiplying the time length of each class by the number of pupils enrolled in the class. For example, if a teacher is assigned to teach five one-hour classes per day with 25 students in each class, the teacher would teach 125 pupil hours for the day.
Under House Bill 241, the 150-hour maximum is doubled to 300 for middle and high school teachers in virtual programs.
The bill would also prohibit independent school districts with a virtual program enrollment of more than 2,000 students that have an elementary, middle or high school in the lowest-performing 5 percent of all schools statewide based on Kentucky’s accountability system from enrolling more students in the virtual program.
The cap would remain in place until all the district’s elementary, middle or high schools are no longer in the lowest-performing 5 percent.
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