Are district online schools closing?

Some are, but the situation is complex

According to an article in The Hechinger Report, which was picked up in USA Today and other sources, “School districts that created online academies to cater to families who preferred virtual education are struggling to keep them open as enrollment drops and costs rise.”
 
The article is well researched and well written, but there’s more to the story.
 
This paragraph captures the article’s main point:
 
“…as Covid fears have waned, many students have tired of screens and employers have begun requiring workers to return in person, a number of those virtual academies are at risk of closing. That’s leaving families like Daniels’ in the lurch, and raising questions about the future of virtual learning. The highest-quality online programs have generally demanded the most resources from school districts, making them the most likely to face closure in the face of budget constraints.”
 
The article focuses on the Rio Rancho school district in New Mexico, and also explores districts in Utah, Indiana, and elsewhere, digging into why these online schools are closing, and some of the students affected.
 
There’s no doubt that some districts are closing their online schools, but three additional points are worth discussing.
 
1.  The article uses anecdotes but not a lot of data, so it’s hard to know how widespread online school closings are.
 
There’s no question that some district online schools are closing. But how many? The article quotes the National Education Policy Center and Clayton Christensen Institute. I believe a much better source on this topic (although somewhat outdated) is the Center For Reinventing Public Education, because the Christenson data are even older, and the NEPC data are misleading because of NEPC’s focus on charter schools (although some quotes in the Hechinger article from NEPC’s Gary Miron are accurate and helpful).
 
The CRPE data looked at the 100 largest school districts in the U.S., going into the 2022-23 school year, and concluded that about 1/3 were ending online options that started during the pandemic, 1/3 were maintaining those options, and 1/3 had an online option from pre-pandemic that they were keeping.
 
If one-third of districts are shutting their online programs, that would certainly be impacting students and families. How much of an impact is hard to say without further analysis, because some of those students are in states where they can choose an online school operating statewide.
 
In addition, the CRPE data set being limited to the largest 100 school districts is important, for reasons explained in the next point below.
 
2. The intersection of economies of scale and demand for fully online schools is an under-explored area of study.
 
Our data over almost two decades suggests that pre-pandemic, perhaps 2% of students/families were interested in fully online schools. I’m not aware of any data on how that number may have changed post-COVID, but let’s assume that it rose by 50% and the current number is 3%.
 
That’s way too small a percentage for many small districts to operate their own online school, if we define “operate” as including district-run online school administration, student support, and teachers.
 
I’m not aware of any studies that show how many students are needed to run an online school in a financially sustainable way with public education funds, and of course there are many variables including the wide range of funding levels in different states.
 
But we can play with some numbers. If an enrollment of 500 students is required to run a K-12 online school sustainably, and 3% of students are interested in a full-time online school, that suggests a district requires a student enrollment of about 17,000 students to maintain a financially viable online school.
 
Is that number correct? Probably not, but it gives us a starting point to guess that perhaps the low end enrollment at which a district can run its own online school viably is between 15,000 and 20,000 students.
 
With that analysis in mind, it’s notable that Rio Rancho School District’s enrollment is right around 17,000 (I only found that out after spitballing the numbers above!), so they appear to be right in the range at which an online school might be viable—except for one major problem. The Hechinger article mentions that the district has had another online school that began pre-covid—so the district seems to be trying to run two online schools. There are differences between the two online schools, so there is an argument for running them separately, but it almost certainly makes the viability issue more difficult.
 
In some states such as Pennsylvania, with many small districts, intermediate units play a major role in running online programs and supporting district online schools. Small districts are deciding that they are too small to run an online school without significant help, from an IU or a private provider. But the economies of scale factor is rarely discussed in the media or policy forums.
 
3. Hybrid schools probably don’t have as low a “natural cap” and many district programs are hybrid.
The final point worth mentioning is that some unknown number of district “online” schools are in fact hybrid, as the district provides a learning center to students who may choose to attend the physical location, or may be required to attend on certain days.
 
This is a confusing topic because while online schools often have the words “online” or “virtual” in their name, few hybrid schools use the word “hybrid” in their name. Further, some of the hybrid schools are calling themselves “virtual” or “online.”
 
Because hybrid schools provide a physical location, some of the reasons for the natural cap on full-time online school enrollments may not be applicable. Students and families perceive, for example, that a hybrid school has many built-in socialization benefits that an online school may lack.
 
I’m not aware of any data on how many of the district “online” schools that have closed, but my guess is that most are 100% online and few are hybrid. Therefore, any overall data set would ideally be divided into “online” and “hybrid.”
 
Several areas I would love to learn more about include:

• How big does an online school have to be in order to be financially viable?

• Are the district online schools that are closing mostly fully online, or are a significant number hybrid?

• Are the district online schools that are closing more likely to be mostly or entirely elementary schools?

• Regardless of whether they are closing or staying open, are the pandemic-created online schools more likely to use synchronous instruction at a greater rate than pre-pandemic online schools?

 
Do you have data or an opinion on either of these questions? Let me know in the DLC Community Portal's Blog Discussion Group. If you’re already a DLC user or member, you must log in before you can join or comment in the group. If you’re not yet on the DLC platform, please create a free user account or join as a DLC member to join the discussion.