New Guide to Starting Online Schools

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New Report Offers Guide for Those Seeking to Start Online Schools

Pioneer forum will focus on best practices in virtual schooling

Online or virtual learning is growing rapidly across the United States, but those interested in starting an online school should first define their mission and target audience, because the size and nature of the student body will dictate subsequent decisions, according to a new study published by Pioneer Institute.

Online Learning 101: Starting a Virtual School And Its Challenges

“The mission and student body will determine the appropriate academic content, teachers and technology,” said Pioneer Institute Executive Director Jim Stergios. “On the practical side, they also help founders create cost estimates.”

For “Online Learning 101,” author Bill Donovan interviewed researchers, academics and educators to develop a guide for those seeking to start a school in which students access instructional materials and interact with teachers via the Internet. The paper features a preface, “The Lessons We Learned,” by Julie Young, co-founder of Florida Virtual School, which is the largest and among the highest-quality virtual schools in the country.

According to one estimate, 1.5 million students had an online learning experience in 2010, up 50 percent from 2007. There were about 275,000 full-time students in online schools during the 2011-12 school year. Thirty-one states and the District of Columbia now have at least one full-time online school operating statewide. Taking at least one online course is now a high school graduation requirement in four states.

Thanks to savings in areas like facilities, operations, transportation and food services, online education can often be delivered less expensively than traditional education, though online schools tend to have additional expenses for computers, curriculum development and creation of learning platforms. They often spend more on marketing and recruitment, since students are generally not assigned to the schools.

According to a 2012 study from the Parthenon Group, annual per-pupil spending at online schools generally ranges between $5,100 and $7,700 annually, compared to about $10,000 for traditional schools. Online schools tend to spend less on labor and more on content acquisition.

Although their labor costs are generally lower, most online schools invest in professional development for teachers, who must develop new skills to adapt to a different teaching environment.

In some cases, online schools are funded with a direct appropriation from the state. But because enrollment is growing so quickly, a funding formula is often the better approach.

Annual per-pupil funding ranges from less than $4,000 in some places to over $9,000 in others. To make the formula more performance based, many online schools are funded based on the number of courses successfully completed rather than enrollment.

In January Massachusetts became one of the many states to expand its commitment to online learning, when Governor Deval Patrick signed a law allowing gradual expansion to up to 10 virtual schools statewide by 2020. Massachusetts, considered a leader among the states in public education, previously had just a single virtual school and no statewide development plan.

On Thursday, February 7, Pioneer Institute will host “Quality Virtual Schooling: Global Best Practices” at 3 p.m. at the Omni Parker House Hotel in downtown Boston. The event will feature introductory remarks by Julie Young, co-founder of Florida Virtual School, the nation’s largest online school, and a keynote address from Michael Horn, executive director of the education practice of Innosight Institute. A panel will include Emory University English Professor Mark Bauerlein, Massachusetts state Senator Will Brownsberger, state Representative Martha Walz, and Michael Sentance, former New England Administrator for the US. Department of Education.

The event is co-sponsored by Florida Virtual School, Democrats for Education Reform, the Program on Education Policy and Governance at Harvard’s Kennedy School and Innosight Institute. Pioneer Institute supports digital learning as part of a menu of school choice options that should be accessible to all schoolchildren.

In December 2011 and March 2012, Pioneer held events, “Virtual Schools, Actual Learning: Digital Education in America,” and “Removing the Barriers: Virtual Schools and State Regulations,” co-sponsored by Democrats for Education Reform, Florida Virtual School, and Harvard University’s Program on Education Policy and Governance. The forums featured Julie Young, former Massachusetts Governor Jane Swift, Susan Patrick of iNACOL, and New Mexico Education Secretary Hannah Skandera. In November 2011, Pioneer honored Sal Khan, founder of the popular online learning platform, Khan Academy, at its annual Lovett C. Peters Lecture.


Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.