Why a New Mexico school district is at war with Stride, a virtual education company

Stride offered New Mexico students an option for online learning, but now Gallup-McKinley County Schools has accused the company of fraud.

GALLUP, N.M. — In 2020, as the Covid pandemic raged, the school district here thought it had found the perfect solution to help provide online schooling to its mostly Native American students when it hired a for-profit education company called Stride Inc.

Stride, a 25-year-old company also known as K12 Inc., is an industry leader in virtual education, serving over 220,000 students in 31 states last school year. It promised Gallup-McKinley County Schools (GMCS) it would provide teachers, laptops and internet hot spots for students who enrolled, in exchange for around $8,000 per pupil. The virtual school, New Mexico Destinations Career Academy, signed up roughly 1,000 students in the 2020-21 school year, a number that would quadruple over time.

Five years later, the district has ended its contract with Stride, a publicly traded corporation, and accused it of prioritizing profits at the expense of students. In interviews, court filings and government complaints, the district alleges Stride reported exaggerated student attendance counts to drive up revenue, neglected special education students and violated state law on student-teacher ratios. Graduation rates and math, reading and science scores among online students all declined, some dramatically, according to district data, while in-person rates improved or stayed the same.

In a complaint filed with the state Public Education Department in May, obtained by NBC News through a public records request, a key Stride employee alleged that top executives knew for at least two years that dozens of teachers were out of compliance with student ratio laws.

Mike Hyatt, the Gallup-McKinley superintendent, has blasted the company. “It was our students that were taken advantage of,” he said. “They’re the ones — whether they know it or not — that were harmed in this. And that just makes me sick inside that a company did this on our watch.”