GALLUP, N.M. — In 2020, amidst the heightened challenges of the Covid pandemic, Gallup-McKinley County Schools (GMCS) believed they had found an optimal solution to facilitate online education for their predominantly Native American student population by partnering with a for-profit education entity, Stride Inc.
Stride, previously known as K12 Inc., has established itself as a prominent leader in virtual education over the last 25 years. Last school year, it catered to more than 220,000 students across 31 states. The company assured GMCS that it would supply educators, laptops, and internet hot spots for enrolled students, charging approximately $8,000 per student. During the 2020-21 school year, their virtual school, New Mexico Destinations Career Academy, initially registered about 1,000 students, a figure that eventually multiplied by four.
Now, five years later, the district has severed ties with Stride, a corporation traded publicly, accusing it of favoring profit over student welfare. According to interviews, court documents, and governmental complaints, GMCS claims Stride inflated student attendance numbers to increase revenue, disregarded students with special needs, and contravened state regulations on teacher-to-student ratios. District data revealed that online students experienced decreases, some severe, in graduation rates and scores in math, reading, and science, whereas in-person education outcomes either improved or held steady.
In a complaint submitted to the state Public Education Department in May, accessed by NBC News via a public records request, a key Stride employee claimed that senior executives were aware for over two years that numerous teachers were non-compliant with student ratio legislation.
Mike Hyatt, the superintendent of GMCS, has vocally criticized the company. “It was our students that were taken advantage of,” he stated. “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.”
Stride, now valued at $6 billion, with revenues having doubled over the past five years, is contesting these accusations. The company has filed five lawsuits against the district this year, which remain unresolved. Stride contends that GMCS breached its contractual agreement and violated legal requirements for school board open meetings, and has not compensated the company for the last school year.
Its attorney also lodged a conflict-of-interest complaint in April against Hyatt, prompting a state review of his educator’s license. Hyatt had applied for a job with Stride in December and been turned down in February. He said that there is no connection between the allegations and his rejection for the job and that the lawsuits are an attempt to distract from Stride’s problems.
A lawsuit the district filed against Stride in late August quotes the whistleblower, who said that on an April 8 Zoom call about the allegations, Peter Stewart, senior vice president of school development, said Stride should “attack first publicly.”
The state Public Education Department declined to comment on the whistleblower complaint, the allegations against Stride or the ongoing inquiry into Hyatt’s license. Stewart did not respond to a request for comment.
Stride declined to address the whistleblower complaint. In response to questions, it defended its actions. “The situation with GMCS is highly unusual, and we believe the district’s actions have left us with no choice but to seek legal resolution to protect our students, staff and contractual obligations,” it said in a statement. “Stride is committed to fair and equitable business practices with our partner districts, and we deny the allegations made by GMCS.”
