03/08/2012 12:01 am ET Updated May 07, 2012

Poor Schools Raid Rivals In Bid To Boost Student Rosters, Funding

By Stephanie Simon

March 8 (Reuters) - As American public school administrators look to bring in more money by recruiting students overseas, they are also hunting closer to home - hoping to poach pupils from rival schools and to draw in home-schooled children.

Schools generally get more state funding as their enrollment rises, so districts across the United States are seeking to boost their numbers by attracting students from other public schools in their town or even elsewhere in the state. They're also trying to reel back in students who have left the public system to be home-schooled.

One of the most successful tactics: Creating an online school that can enroll students statewide. Districts can run the online program on their own or hire an outside contractor - often a private, for-profit firm - to handle every aspect, from designing the curriculum to hiring teachers to marketing the school.

Though cyber students don't pay tuition, districts do typically get state funding to educate them - and can effectively turn a profit if they can keep the cost of the online program low.

Consider the Omak School District, in a depressed logging region in the far northern reaches of Washington state. The district has 1,400 local kids enrolled in its bricks-and-mortar schools. It has 1,800 - from across the state - enrolled in its online program. Last year, the district received $140,000 more in public funding for those online students than it spent on their education.

A $140,000 windfall doesn't sound like much for a district with a $14 million budget, "but it's a whopping big deal for us," said Art Himmler, the superintendent. The money funded 2-1/2 teaching positions in traditional schools and kept class sizes from rising.

"It helps us stay above water," Himmler said.

Critics point out that many online schools post poor scores on state standardized tests, raising concerns about educating kids on the cheap. Some states are starting to crack down.

In Ohio, officials are investigating a deal that lets the public school district in the town of London divert sizeable sums of state money earmarked to educate kids at an online academy serving at-risk teens.

This year, the district is expected to keep $700,000 meant for the online academy - which posted such poor test scores that the state rated it an "academic emergency." District treasurer Kristine Blind said the online academy has full control of its budget and uses as much of its state funding as it needs.


In addition to marketing online programs, many districts are pulling out all the stops to attract more students into their traditional schools.

At least 17 states let students enroll outside their home districts. To woo these students, districts are hiring PR consultants, airing TV and radio spots, putting up billboards, trekking door-to-door with brochures - even running advertisements during movie theater trailers.

Perhaps the most aggressive campaign of the year is in St. Louis, where the troubled public school district set aside $1 million for advertising.

The district is also spending nearly $7 million this year on a loss leader: It's providing free, all-day preschool to 2,200 toddlers, in the hopes that grateful parents will come to view the district fondly and enroll their children for kindergarten and beyond, spokesman Patrick Wallace said.

This type of entrepreneurial mindset is becoming more common in education as districts struggle to make up for cuts in public funding, said Guilbert Hentschke, a professor of public school administration at the University of Southern California.

"Whether they're smarter, more alert or more desperate, I'm not sure," he said, "but you're increasingly seeing districts trying to figure out how to move in the world of business."