#United States #Gallup #Stride Inc #Gallup-McKinley #Education Fraud

Allegations Against Stride, Inc.

The Gallup-McKinley County Schools (GMCS) Board of Education has taken a bold step by filing a verified complaint against Stride, Inc. (NYSE: LRN) in New Mexico’s 11th Judicial District Court. This complaint brings serious allegations to light, accusing the publicly traded education company of a range of misconduct aimed at prioritizing profits over the educational needs of students, a significant number of whom are Native American.

Lawsuit Claims

The complaint asserts that Stride, Inc. engaged in fraudulent and deceptive practices that include:

• - Inflated Enrollment Figures: Stride allegedly retained ghost students on its rolls to secure additional state funds for each enrolled student.
• - Overburdened Educators: Teachers were assigned excessively large caseloads, sometimes exceeding 200 students, violating statutory limits designed to maintain manageable workloads and effective education.
• - Non-Compliance with Legal Requirements: Ignoring safety compliance protocols such as background checks and licensure laws, Stride reportedly failed to provide federally mandated special education services.
• - Whistleblower Suppression: Employees who tried to expose these malpractices faced suppression and intimidation, preventing them from reporting the financial directives that prioritized profit over providing adequate student services.

Testimonies Supporting the Claims

Whistleblower accounts cited in the lawsuit reveal that high-ranking finance executives at Stride blatantly rejected requests for hiring additional teachers, even when aware that they would violate New Mexico statutes. Instead, these executives chose to implement further staff cuts in order to meet profit targets, showcasing a systemic disregard for educational quality.

Quote from GMCS Leadership

Chris Mortensen, the GMCS Board President, stated, "This case is about a publicly traded corporation deliberately choosing Wall Street margins over the futures of our children. Stride's financial model came at the direct expense of Native American and rural students in our district. That is unconscionable, and it is fraudulent."

Deteriorating Educational Standards

The impact of Stride's cost-cutting measures has led to alarming educational decline in the district's performance metrics. The GMCS lawsuit highlights that the graduation rate plummeted to 27.67% in 2024, down from 54% in the previous year, with consistent underperformance shown in standardized tests across all subjects. This decline, along with a widespread erosion of public trust, raises serious questions about the sustainability of for-profit educational frameworks.

Kevin Mitchell, a GMCS Board Member and member of the Navajo Nation, expressed his outrage saying, "Our district is majority Native American, and these students were treated as profit centers rather than children with a right to an education. Stride diverted taxpayer dollars to inflate its stock value while systematically denying our kids the qualified teachers and special education support they were legally entitled to receive."

The Broader Implications of the Case

The complaint seeks both compensatory and punitive damages, including restitution of taxpayer funds and triple damages under New Mexico’s Unfair Trade Practices Act. This lawsuit underscores the risks involved in using publicly traded corporations to manage education systems where profit margins can come at the expense of educational integrity and student welfare.

In conclusion, GMCS’s case against Stride, Inc. not only seeks justice for its students but also raises critical questions about the broader implications of for-profit education businesses in underserved communities. The outcomes may set crucial precedents that could shape the future of educational practices across similar districts nationwide.