KY virtual school in dispute between state, lawmakers is managed by scrutinized for-profit

A for-profit, publicly traded company that agreed to a settlement in 2016 over accusations it made false claims about its business is contracted to help run a virtual school in Kentucky that’s at the heart of a struggle between state lawmakers and the state education department.

The company, Stride, has a contract with the Kentucky Virtual Academy at Cloverport Independent, a poorly performing district that’s become a target of the Kentucky Board of Education.

Stride is what’s known as an education management organization, which operates online schooling programs that function as alternatives to traditional schools nationwide.

But Cloverport’s virtual academy has come under fire from state officials for poor test scores, failing to administer state tests to enough students and failing to comply with state regulations on class sizes.

“Cloverport Independent School District, like any school district, is responsible for entering into contracts, the terms of which do not set the district up for non-compliance with state laws designed to protect and serve students,” Kentucky Education Commissioner Robbie Fletcher told the Herald-Leader in an email Wednesday.

The small district in Breckinridge County, on the Ohio River, has about 275 students enrolled in in-person classes and about 2,800 enrolled in the virtual academy founded last year and managed by Stride.

The Board of Education late last year sought a change that would cap the percentage of students in a district who could be enrolled in online programs like the Kentucky Virtual Academy. But Kentucky lawmakers blocked the board of education efforts last month, as the Administrative Regulation Review Subcommittee did not vote on the change.

Additionally, a bill has been approved by the Senate Education Committee that would prevent any such cap through 2028.

Stride’s contract, provided to the Herald-Leader by Cloverport Superintendent Keith Haynes, was signed by the district in 2023 and amended last July.

According to the contract, Cloverport keeps 3% of what it receives from the state as part of the state’s attendance-based funding formula. The other 97% goes to Stride, and it’s used to pay for teachers and operations of the virtual academy, including logistics, online curriculum, student technology and securing in-person testing locations, Haynes said.

Cloverport’s contract with Stride dictates the district can’t cap the number of students enrolled.

“Stride K12 has built a strong reputation as a trusted leader in virtual education, providing families with a reliable, high-quality online learning option that meets the diverse needs of today’s learners,” the company’s public relations manager, Cameron Bell, said Wednesday in a statement. “For the past 25 years, we have maintained an outstanding record of transparency and compliance to provide services and curriculum to public schools across the nation. We continue to focus on what matters most — empowering students with the education and resources they need to reach their full potential.

What is Stride?

Stride was founded in 2000 as K12, and it changed to its current name in 2020.

While operating under the name K12, the company agreed to a settlement in 2016 over alleged violations of California’s false claims, false advertising and unfair competition law, according to a news release from then-California Attorney General and 2024 Democratic Presidential candidate Kamala Harris.

Under the settlement, K12 had to provide about $160 million in debt relief to the non-profit schools it managed.

And a 2023 story by the news magazine Forbes outlined several lawsuits against the company and problems in the states where it operated, including claims of ineffectiveness and misleading stockholders about the company’s business practices.

Haynes defended the company in an email Wednesday, noting that more than 175 teachers at the Kentucky Virtual Academy are employed and supervised by the school district.

“Stride is a public company where transparency and compliance are required,” Haynes said. “Many issues that arose in the past were prior to the COVID-19 pandemic, when many in the education establishment were opposed to virtual learning. We have found Stride to be a strong, ethical partner.”

And, Haynes argued, students who had struggled in traditional classroom settings had found success at the virtual academy.

“We do not believe that one year of data is sufficient to make a value judgment on our virtual program, particularly given its uniqueness in the Commonwealth,” Haynes said in an email to the Herald-Leader. “We are committed to continuing to serve the families that have put their faith in our school and look forward to watching our students flourish in an environment that best fits them.”

Cloverport receives state funding for virtual academy

In the 2022-2023 school year, prior to the creation of the virtual program, Cloverport’s enrollment was 276 students. For the 2023-2024 school year, the first with a virtual academy, enrollment increased to 1,227.

The district began this school year with 2,756 students. As of Jan. 21, that number had jumped to 3,069, and Haynes said enrollment now sits around 2,800.

When students enroll in Cloverport’s virtual program, regardless of their districts of residence, Cloverport includes the student in its district average daily attendance. That average daily attendance is factored into the formula for state funding, known as Support Education Excellence in Kentucky.

Jennifer Ginn, spokesperson for the Kentucky Department of Education, said Wednesday the district received about $1.8 million in SEEK funding for the 2022-2023 school year. That number jumped to about $6.5 million last year and jumped again to about $18.8 million this year.

Kentucky’s attempt to cap virtual enrollment comes as some districts statewide have begun offering virtual-only academies and the Republican-led General Assembly has attempted to push through the use of taxpayer funds for programs other than traditional public schools.

Senate Bill 268, sponsored by Sen. Aaron Reed, R-Shelbyville, would stop the state board from capping enrollment in virtual programs, as well as stopping the board from reducing or withholding funds to a district based on its operation of a virtual program.

The bill received initial approval from a Senate committee, but on Wednesday the full Senate sent it back to the committee.

In 2023, when Kentucky Virtual Academy opened, Stride said in a news release the school would offer a flexible learning model dedicated to empowering Kentucky students through personalized, at-home learning with state-certified teachers.

Haynes, the Cloverport superintendent, said in that release: “In partnership with StrideK12, we are transforming the structure of traditional education to best fit every student and teacher we serve.”

This story was originally published March 6, 2025 at 5:00 AM.