For-Profit Charter Schools Offering Students Cash, Swag to Refer Their Friends
Lyla Elkins transferred to North Nicholas High School in Cape Coral, Florida, in 2016 with hopes of sailing through its computer-based courses and graduating early. She didn’t realize the for-profit charter school would also be a source of income: a $25 gift card each time she persuaded a new student to enroll.
“I referred almost all of my friends,” said Elkins, 17, who earned three gift cards. She also won a Valentine’s Day teddy bear in a raffle for sharing one of the school’s Facebook posts.
Such incentives are rampant among for-profit operators of public alternative high schools like North Nicholas, which serves students at risk of dropping out. These schools market aggressively to attract new students, especially during weeks when the state is tallying enrollment for funding purposes. They often turn their students into promoters, dangling rewards for plugs on social media, student referrals or online reviews, a ProPublica-USA Today investigation found. Some also offer valuable perks simply for enrolling.
The schools’ reality is often less inspiring than their promotions. While they face a daunting mission of salvaging students who struggled elsewhere, they’re characterized by high absenteeism, low graduation rates, little instruction from teachers and few extracurricular activities or elective classes. Their intensive recruitment, when coupled with poor outcomes, “is wrong on so many levels,” said Samuel E. Abrams, a professor at Columbia Teachers College and author of a 2016 book on for-profit education. “It’s not addressing the pedagogical needs of these kids.”
It’s legal for schools to provide gift cards to students for referrals, and free electronic devices, such as tablets or computers, to newcomers. And students are free to express their opinions on their schools. But advertisements have less protection under the First Amendment, and some for-profit school promotions involving online posts or reviews may violate federal consumer safeguards.
According to the Federal Trade Commission, companies that use students and other groups as social media marketers should instruct them to disclose publicly that they expect to be paid. In settlements with the FTC, companies that failed to encourage such disclosures have agreed to follow the law — or face a potential penalty of up to $40,000 per transgression. Those instances didn’t involve students.
Even a series of seemingly small awards should be acknowledged to help viewers assess the credibility of an online endorsement, said Mary Engle, FTC associate director for advertising practices. “Our advice is to err on the side of disclosure,” she said.
More companies are using “micro influencers” like students for marketing, because they are inexpensive and effective at targeting consumer groups, said Bonnie Patten, executive director of the nonprofit watchdog Truth in Advertising.
“Basically, the law says if it’s an ad, consumers need to be able to clearly and conspicuously see it’s an ad,” she said. “For a group of unsophisticated teenage kids, the onus is definitely on the company to require them to disclose this material connection.”
During its “Share the Love Facebook Contest” in February, North Nicholas offered raffle prizes such as the bear Elkins won, a $50 gift card grand prize, $25 gift cards, flowers and chocolates. To enter, students needed only to “Like, Comment AND Share” a post from the charter school’s Facebook page. Charter schools are publicly funded, but independently run.
“Remember to share a post every day for more chances to win!” the school urged. It didn’t say on the post, or tell Elkins separately, that students should disclose that they hoped to be rewarded.
Angela Whitford-Narine, president of the for-profit company that runs North Nicholas, Accelerated Learning Solutions, said schools handle their own social media pages and ALS does not believe it is obligated to make disclosures in individual schools’ online posts. But, she said, the company will consult its attorneys in response to ProPublica’s inquiry.
North Nicholas’ promotion took place during a week when Florida education officials require schools to count heads to determine how much money they should receive. At least 17 states, including Florida, use this “snapshot” method to allocate public education dollars. Whitford-Narine said ALS hosts social events throughout the year — not just during count weeks.
Those weeks are busy recruitment periods for other for-profit chains too. One alternative school in St. Lucie County, Florida, managed by Acceleration Academies, used Facebook to encourage students not to “miss out on the food, fun and raffles” between Jan. 30 and Feb. 10 — a period that overlapped with the state’s enrollment count. It touted “Pizza Monday” and “Pizza Thursday,” “Taco Tuesday,” and “Wing Wednesday.”
David Sundstrom, chairman of the board for Acceleration Academies, which is based in Chicago, said in an email that such social events take place year-round and are not just a way to drum up enrollment. “Bottom line,” he wrote, “we don’t use pizza parties etc. as a mercenary means to exploit the kids we serve, or to make money.”
Another Acceleration Academy offered a pricey incentive to new students — free electronics. “As a graduation candidate at Polk Acceleration Academy, you’ll receive your own Kindle Fire HD to access your course content,” the school’s 2014 Facebook post said. Acceleration schools no longer provide Kindle Fires for newcomers, Sundstrom said, although some give away technology devices to students for achieving academic goals.
Refer-a-friend programs like the one at North Nicholas are common in the sector. “Bring a friend into Mavericks!” said one 2015 Facebook post for a Palm Springs school in the for-profit Florida charter chain. “They will get help getting their diploma and you will get a gift card.” The post promised a $5 gift card for each referral as part of the “Friends & Family Club,” as long as the recipient had acceptable attendance and no disciplinary problems.
Mavericks’ new parent company, EdisonLearning, hands out Walmart gift cards for student referrals at its “Bridgescape” schools in Illinois and Ohio. It posted pictures on Facebook this past spring of students displaying their prizes. EdisonLearning officials said the gift cards enable low-income students to buy essentials.
In some cases, schools have offered rewards to students for online reviews. In April, Invictus High School in the Cleveland suburb of Parma Heights promised students a $25 gift card for a review on Yelp, an arrangement it promoted on Facebook. Invictus, which was run by a for-profit manager until November 2016, didn’t instruct students to disclose the benefit.
Joe Palmer, the school’s principal, said it didn’t end up paying any students for reviews. This year, it’s changing its advertising strategy. “We’re moving away from any recruitment strategies that aren’t focused on driving students through word of mouth,” he said.