K12 Inc. to Pay $168.5 Million for Deceptive Ads, Attendance and Other Violations

CALIFORNIA – A $168.5 Million settlement has been reached with Virginia-based K-12 Inc. for the alleged violations believed to mislead the public through their advertising practices, the State of California Department of Justice officials said.

It is alleged that K-12, who manages California Virtual Academies (CAVA), enticed parents through deceptive advertising to enroll their students in their program. It is also alleged that student attendance was inflated to collect more California Department of Education funding and K12 inc. representatives influenced nonprofit charter schools to enter “unfavorable contracts” putting them in financial distress.

The deception not only affected taxpayers but also put the student’s right to a quality education in jeopardy. A whistleblower reported that K12 counted a one-minute as a full day of attendance, collecting more stated funding than they were entitled to. This practice deprived students of quality learning hours on the days this was done.

Advertised as a school with a high academic progress, and parental satisfaction, parents flocked to the website to enroll their students. The California Department of Justice said that the graduation rate for CAVA schools is 36% while the state average is 78%.

“All children deserve, and are entitled under the law, to an equal education,” said Attorney General Harris. “K12 and its schools misled parents and the State of California by claiming taxpayer dollars for questionable student attendance, misstating student success and parent satisfaction, and loading nonprofit charities with debt.  As my office continues an industry-wide examination of for-profit academic institutions, this settlement ensures K12 and its schools are held accountable and make much-needed improvements.”

The settlement requires that K12 provides $160 million in debt relief to the nonprofit schools that it manages and pays the remaining $8.5 million in settlement of all claims. They will also be required to make changes to their contracts with CAVA Schools, review and ensure the accuracy of all advertisements and provide additional attendance training to teachers preventing improper claims for attendance dollars.

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