COLUMBUS, Ohio — The Electronic Classroom of Tomorrow, an online charter school based here, graduated 2,371 students last spring. At the commencement ceremony, a student speaker triumphantly told her classmates that the group was “the single-largest graduating high school class in the nation.”
What she did not say was this: Despite the huge number of graduates — this year, the school is on track to graduate 2,300 — more students drop out of the Electronic Classroom or fail to finish high school within four years than at any other school in the country, according to federal data. For every 100 students who graduate on time, 80 do not.
Even as the national on-time graduation rate has hit a record high of 82 percent, publicly funded online schools like the Electronic Classroom have become the new dropout factories.
These schools take on students with unorthodox needs — like serious medical problems or experiences with bullying — that traditional districts may find difficult to meet. But with no physical classrooms and high pupil-to-teacher ratios, they cannot provide support in person.
“If you’re disconnected or struggling or you haven’t done well in school before, it’s going to be tough to succeed in this environment,” said Robert Balfanz, the director of the Everyone Graduates Center, a nonprofit research and advocacy group in Baltimore.
Virtual schools have experienced explosive growth nationwide in recent years, financed mostly by state money. But according to a report released on Tuesday by America’s Promise Alliance, a consortium of education advocacy groups, the average graduation rate at online schools is 40 percent.
Few states have as many students in e-schools as Ohio. Online charter schools here are educating one out of every 26 high school students, yet their graduation rates are worse than those in the state’s most impoverished cities, including Cleveland and Youngstown.
With 17,000 pupils, most in high school, the Electronic Classroom is the largest online school in the state. Students and teachers work from home on computers, communicating by email or on the school’s web platform at distances that can be hundreds of miles apart.
In 2014, the school’s graduation rate did not even reach 39 percent. Because of this poor record, as well as concerns about student performance on standardized tests, the school is now under “corrective action” by a state regulator, which is determining its next steps.
But while some students may not have found success at the school, the Electronic Classroom has richly rewarded private companies affiliated with its founder, William Lager, a software executive.
When students enroll in the Electronic Classroom or in other online charters, a proportion of the state money allotted for each pupil is redirected from traditional school districts to the cyberschools. At the Electronic Classroom, which Mr. Lager founded in 2000, the money has been used to help enrich for-profit companies that he leads. Those companies provide school services, including instructional materials and public relations.
For example, in the 2014 fiscal year, the last year for which federal tax filings were available, the school paid the companies associated with Mr. Lager nearly $23 million, or about one-fifth of the nearly $115 million in government funds it took in.
Critics say the companies associated with Mr. Lager have not delivered much value. “I don’t begrudge people making money if they really can build a better mousetrap,” said Stephen Dyer, a former Ohio state legislator and the education policy fellow at Innovation Ohio, a Columbus think tank that is sharply critical of online charter schools.
“It’s clear that Mr. Lager has not done a service over all to kids, and certainly not appreciably better than even the most struggling school districts in the state,” Mr. Dyer added. “But he’s becoming incredibly wealthy doing a very mediocre job for kids.”
Mr. Lager declined requests for an interview. In an emailed statement on Tuesday, he did not respond to questions about his affiliated companies but said the Electronic Classroom’s graduation rate did not accurately measure the school’s performance.
In the statement, he said many students arrived at the school already off-track and have trouble making up the course credits in time to graduate.
“Holding a school accountable for such students is like charging a relief pitcher with a loss when they enter a game three runs behind and wiping out the record of the starting pitcher,” his statement said.
The statement added that the school “should be judged based on an accountability system that successfully controls for the academic effects of demographic factors such as poverty, special needs and mobility.”
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