YOU ARE HERE: LAT HomeCollections

The Vanishing Class

Failing Students Spell Profit for Some Schools

One couple built a lucrative business using state funding to provide dropouts with classes that could -- but often don't -- lead to diplomas.

February 04, 2006|Joel Rubin and Nancy Cleeland | Times Staff Writers

In failure, there is opportunity. And in California's high schools, there is no shortage of failure.

Each year, tens of thousands of students drop out. Most still yearn for diplomas.

That's where the opportunity comes for entrepreneurs like John and Joan Hall, former teachers from Hollywood who have built a lucrative but controversial chain of schools for dropouts.

In the Halls' two charter school operations -- the nonprofit Options for Youth and the for-profit Opportunities for Learning -- students work independently, completing assignments at home and typically meeting with a teacher just two hours a week.

The state's dropout crisis has given rise to many schools like theirs, publicly funded programs offering alternate routes to graduation. Some are operated by school districts, others by private companies using state funds. The Halls' enterprise, the largest chain of independent study schools in the state, employed about 300 teachers and, according to the state Department of Education, received at least $39.5 million in public funds last school year.

Independent study is popular with California students: More than a quarter of all charter schools in the state aren't classroom-based. But the idea that teenagers who have failed in traditional schools will do better studying subjects like algebra on their own remains largely unproved.

"If these are at-risk kids, they should be receiving the best education possible. Ironically, these schools operate with some of the most lax oversight over how they are teaching students and how resources are being used," said Luis Huerta, a Columbia University professor who has studied such programs, including the Halls'. "While their intents may be noble, this is still an operation that is funded by taxpayers."

By one measure at least, the Halls' results have been dismal: Very few of the students who enter their programs complete enough classes to earn high school diplomas.

Only 11% of the students who left Options and Opportunities during the 2003-04 school year graduated, according to the schools' records. Nearly all of the rest dropped out, were expelled or transferred to other schools.

John Hall says that graduation isn't the way to measure success and that his schools' primary aim is to get students caught up on academic credits so they can earn diplomas elsewhere. But no one checks on how students fare after they transfer out of the programs -- or on whether they actually enroll elsewhere.

Still, Hall and his supporters say that the Options and Opportunities charters provide an important second chance for struggling students.

"If the public schools can't do it for whatever reason, then let somebody else serve that child," said Ted Kimbrough, a former schools chief in Compton and one of 11 retired school district superintendents who serve on an advisory board for the charters.

The Halls have no problem filling their 51 learning centers, operated under charters with eight school districts around California, including Burbank, Baldwin Park and San Gabriel.

Some 20,000 students enrolled for at least part of the last school year, school officials said. Waiting lists are common, but turnover is high, with students staying an average of about six months.

Serving failed students has paid the Halls well.

Each collected $321,000 in salary in the 2003-04 school year, according to documents the Halls provided to the state Department of Education. Los Angeles schools Supt. Roy Romer, who oversees a 727,000-student district, made $250,000 that year.

State records show that in the same year, at least $4.6 million of the money the Halls' schools received went to three for-profit companies owned by the couple. The businesses provided the schools with management, technology and special education services. The Halls have refused to disclose to the state how much profit they receive from their business enterprises.

In the early years, at least, the schools received significantly more state funding than they spent. Records show that during the 2001-02 school year, the nonprofit Options schools transferred more than $10 million in reserves built from public money to a fledgling charity operated by the Halls' 27-year-old daughter, Jamie.

After a long-running dispute with the Halls about how much funding the schools should receive and how much information they should have to disclose, State Supt. of Public Instruction Jack O'Connell called last year for a far-reaching audit of Options and Opportunities.

Auditors are scrutinizing how the programs account for such things as student attendance and teacher workload and are looking at potential conflicts of interests within the Halls' web of businesses.

"We will not allow profiteering to occur at the expense of our students' education," O'Connell said.

The Halls say they've used state funds appropriately and point out that under charter law, they are entitled to earn a profit.

Los Angeles Times Articles