TO: New York State Legislature FROM: Xue Chen SUBJECT: Should New York State create a virtual high school? DATE: 5/8/12

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1 Memorandum TO: New York State Legislature FROM: Xue Chen SUBJECT: Should New York State create a virtual high school? DATE: 5/8/12 The 2012 New York State gap-closing plan includes a 2.7 billion cut in state education aid. With education expenditures representing over 34 percent of New York s operating funds, state and local education systems are under increasing pressure to reduce costs while maintaining or improving student performance. I recommend the New York State to experiment with a K-12 online school program considering its potential on reducing cost and improving students performance. Background The concept of online learning has received support from the U.S. Department of Education for its ability to help schools meet critical goals of the No Child Left Behind Act. In the July 12, 2002, press release from the U.S. Department of Education, Paige Touts Technology, E- Learning on His No Child Left Behind Tour Across America (U.S. Department of Education, 2002) former U.S. Secretary of Education Rod Paige highlighted the importance of harnessing the power of technology and online learning to expand access to learning and make sure no child in America is left behind. Paige concluded online learning is a powerful option for parents and schools. Schools across the country are using technologies to expand access, improve instructional quality and reduce costs associated with traditional instruction. Many districts and states have initiated online learning programs to replace or supplement teaching in brick-andmortar schools.

2 As of 2011, 48 states have supplemental K-12 online learning programs (where students take one or two courses online) or full-time programs. These programs were offered by a number of different providers, including state virtual schools, multidistrict full-time online schools, and single-district programs. New York State is one of the few states that does not have a state-led virtual school or state-level policy. In New York, the state-led K-12 virtual school program would be a supplemental program providing online courses for students who are enrolled in traditional schools across the state. Instruction is provided by teachers working remotely or by specially designed software or both and delivered to students through computers or the Internet. In some cases, instruction can be supplemented by a local teacher. The state K- 12 virtual school would not be accountable for granting academic credits or diplomas. Instead, it would rely on the local school in which the student is enrolled. To better measure the outcome and determine the potentials for cost-savings, the state should experiment with a variety of courses in different fields, such as math, science, language and art, with random assignment to students across the state. Cost Analysis Online learning can reduce costs and, at the same time, produce learning outcomes essentially equal to traditional classrooms. In school year projection (Table1), New York State s total formula based aid for elementary and secondary schools is $19.22 billion. This includes large areas of spending that a virtual school could remove or cut entirely. In addition to the foundation aid, the State provided an extra $2.6 billion aid on buildings, $1.6 billion extra on transportation and $243 million on library, textbook and software.

3 Base year aids (mil) NYC Totals Rest of state totals State totals Foundation aid 6,187,050,084 8,706,574,347 14,893,624,431 Software, library textbook 101,201, ,393, ,615,039 Transportion incl Summer 492,208,017 1,123,413,165 1,615,621,182 Building 921,009,028 1,711,969,828 2,632,978,856 Table1. State of New York State Aid Projections The largest cost component for traditional schools and state virtual schools is personnel, which accounts for about percent of a school s operating budget. According to data from the Syracuse City School District, for the school year, Syracuse City School District had 32 pre K-12 schools in total with 20,076 students enrolled. There are 1,794 instructional staff, 814 teaching assistants and more than one thousand clericals and administrational staff. The salaries and benefits for city school district staff accounts for 74 percent ($247.8 million) of school expenses in the school year. Generally speaking, online schools can reduce labor cost by more effectively using teacher time, increasing student-teacher ratios or transferring some teaching activities to technology. In a state supplemental online school, certain instructional activities can be assisted by technology (e.g., online quizzes with automated grading, grammar instruction, test preparation), teachers can spend more of their time on course planning, face to face interactions, addressing and solving student problems, which require high-level expertise and experience. Focusing teacher time on instruction is an effective way that enables teachers to serve more students and ultimately reduce the number of teachers needed to maintain comparable student outcomes. Traditional schools also spend significant amounts of money (15-25 percent of the school budget) on non-instructional operations such as transportation and meals. For the school year, the Syracuse City School District provided transportation for approximately 9,558 public school students daily, which cost $12.4 million in total. It also prepared 7,300 breakfasts and 14,200 lunches daily. Physical space costs are another

4 important component of traditional schools. By substituting classroom instruction with online instruction, the need for physical space can be reduced. A state virtual school does not require large, complex buildings. In most states, online schools have a central location for operation including administration, staff training and meetings, equipment and storage. Since learning is not limited to a physical location and teachers can either work from the central office or from home, it can potentially reduce the costs of transportation, meals, libraries, custodians, utilities and many other services associated with physical infrastructure. Moreover, once an online course is developed, digital materials can be reused and updated, costs associated with purchasing textbooks, copying and printing can be greatly reduced. According to one estimate, for copying materials alone, online learning can potentially achieve a savings of $2.2 billion per year at the national level, based on an estimate that schools save $40 per student each year. Studies on the costs of online learning programs in comparison with face-to-face instruction have consistently found savings associated with online learning. One example is Florida Virtual School (FLVS). In 2007, the Florida TaxWatch Center for Educational Performance and Accountability (CEPA) undertook a comprehensive analysis of FLVS data to examine the viability of Florida Virtual School as a credible alternative to traditional schooling regarding both student achievement outcomes and costeffectiveness. The final report demonstrates that FLVS weighted (FTE) cost $1,048 (11%) less than a public school weighted FTE, while FLVS students consistently outperformed their public school counterparts on both the Reading and Mathematics FCAT (Florida Comprehensive Assessment Test) and Advanced Placement (AP) examinations. In addition, FLVS has no expenses for transportation, building new facilities, or the maintenance or repair of existing facilities.

5 Potential Contribution to Student Performance While saving money, online schools also fill gaps in traditional education. They create more opportunities for students to take courses that are not available in local schools, because of the relative small local demand or the costs associated with recruiting teachers with the necessary skills. In particular, rural schools and districts with limited resources sometimes have difficulty justifying the expense of hiring teachers who would serve relatively few students. Broadening access to resources and experiences is a potential way that online learning can improve education equity and boost student performance. The West Virginia Virtual School offers a Spanish Program as part of a larger, three-year initiative funded by the US Department of Education. The program combines computerbased, classroom, and audio-interactive components to rural and isolated schools where certified Spanish teachers are not available. A three-year evaluation study with a matched design at the school level found that students did as well as those in the traditional faceto-face condition on a multiple-choice test, including subtests on oral and written comprehension of Spanish. Online classrooms are also highly individualized and differentiated. Courses are designed to meet different needs of a variety of students such as gifted and fast-learning students, disabled students and homeschooled students. Students are more flexible to progress toward different goals or at different paces without adhering to a traditional schedule. It is also personalized that students are allowed to draw on their personal interests to direct learning content and objectives, which enables greater motivation and deeper learning. Conclusion Online learning, in its different shapes and sizes, is become a new part of classroom learning through the nation s K-12 students. At the same time, educators, policymakers, and other decision makers have raised concerns about its costs and benefits especially when compared to face-to-face delivery. Studies show that it has improved student achievement on average and reduced school operating costs over time. The New York State should follow the pace of other states and start the state virtual school program.

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