Gallup-McKinley Schools Sue Stride Over Virtual Program, Citing Fraud and Student Harm
In the wide, rugged stretches of McKinley County, New Mexico, a virtual school once promised to bridge distance and opportunity.
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In the wide, rugged stretches of McKinley County, New Mexico, a virtual school once promised to bridge distance and opportunity. That same program is now at the heart of a major legal battle. Gallup-McKinley County Schools (GMCS) has filed a lawsuit against Stride Inc., accusing the for-profit education company of fraud, inflating student counts, and neglecting core student services—allegations that officials say harmed local children. The district launched Destinations Career Academy of New Mexico in fall 2020 with Stride as its management partner, providing teachers, laptops, and online access to students across rural communities.
The program was intended to help families—especially those in remote Navajo and Zuni Nation areas—overcome distance barriers to education. However, after years of growing complaints, GMCS announced in May 2025 that it would terminate its contract with Stride, effective June 30. District officials cited “material breaches” including poor academic outcomes, unlicensed staff, and violations of state rules on student-teacher ratios and special education.
Graduation rates reportedly fell from 55.8 percent in 2022 to 27.7 percent in 2024, while math proficiency averaged just 5.6 percent. On September 10, 2025, GMCS filed a verified complaint in the Eleventh Judicial District Court, alleging Stride knowingly counted “ghost students” to collect public funding, failed to ensure teacher licensure and background checks, and ignored federally mandated special education requirements.
A whistleblower complaint also described teachers assigned to more than 200 students—far above the state’s legal limit. Stride denies wrongdoing, saying the district mismanaged the program and withheld payments. The company is pursuing its own legal actions against GMCS. Following publication of the allegations, Stride’s stock dropped nearly 12 percent on September 15, closing at $139.76 per share.
Several national law firms have since opened investor investigations into possible securities violations linked to the case. Despite GMCS ending the partnership, the Destinations Career Academy continues operating statewide under other districts, serving more than 3,000 students.
Supporters call it a vital lifeline for rural learners, but critics argue the case highlights the dangers of outsourcing public education to for-profit operators.