@boomerang,
I can see a useful niche for credit recovery programs, but only if these are standardized programs monitored and offered on at least a state, rather than local, level and only if completion of such programs is reflective of a grade-level comprehension of the material. Obviously, that sort of monitoring and oversight and rigorous evaluation isn't going on yet, and that's where the problem is.
For students who lack only a few credits to graduate with a regular diploma, credit recovery might help to prevent drop-outs and increase graduation rate, but only if such a program has the standards and safeguards I've already mentioned, and only if the government carefully evaluates the effectiveness and educational validity of such programs when offered by for-profit private companies.
I'm much more enthusiastic about self-paced learning programs where the student can progress at their own rate, based on their mastery of the material. I think that's the best way to learn, and it might help to keep both struggling students and bright students more engaged with the material because it will always be appropriate to their level.
The whole idea of online learning opens up a lot of exciting possibilities in terms of formal education, and, on a high school level, I can see where it might even help students to acquire some of those non-cognitive abilities--like self-discipline, persistence, frustration tolerance, motivation, etc. that are important to future success, if the courses are self-paced, and if the programs are sufficiently interesting and interactive and offer enough positive feedback and "rewards" to involve students who might be disengaged in a classroom setting. It is certainly a useful adjunct to the classroom teacher and classroom experience in terms of helping to lessen the drop-out rate.
Formal credentials, like a high school diploma or GED are important as markers of a level of achievement, but we have to insure that more of the population will have achieved the literacy level, and the mastery of course material level, to justify acquiring those credentials. Just trying to increase graduation rates or "completion" rates doesn't mean much if these don't represent real levels of educational attainment. We have to find more inventive and involving and reliable ways of engaging "at risk" and disengaged students, and not just push them through the system or watch them drop out--but these methods must also offer a real first rate education and not just a certificate to boost a school system's ratings and federal funding.
I don't think I'm in favor of the in-school GED programs--I think schools should be expected to prepare students for regular diplomas, and they should focus on that job, without offering easier or less rigorous options. The GED should be retained as a "second chance" option for those who have already dropped out of school, as was the original intention.