Will New California Law Banning For-Profit Charter Schools Make a Difference?

Many of the states passed charter school enabling legislation back in the 1990s, before there was any understanding of how these privately operated schools—naively imagined as innocent incubators for innovation—might take advantage of public goodwill and access to pools of tax dollars to find ways to make a profit. By now we ought to have learned a lesson.

There are a few instances of fledgling regulation—notably last week, when California Governor Jerry Brown signed a law that is supposed to ban for-profit charter management companies and for-profit “sweeps” management contracts under which for-profit management companies take over and operate charters that are formally not-for-profit.

Living in Ohio, however—where the notorious Electronic Classroom of Tomorrow stole what is now known to be well over a billion dollars over a seventeen year period while legislators and potential state regulators looked the other way as campaign contributions flowed from the school’s founder and operator—I am skeptical about any state’s capacity to develop the political will to stop the ripoff.  Strong, ethical leadership by politicians would be required.

The problem with California’s new oversight law, according to those who have studied it, is that it really only pretends to impose oversight.

The Washington Post‘s Valerie Strauss fills in some history: “California has permitted charter schools—which are publicly funded but privately operated, sometimes by for-profit companies—since 1992.  Since then, the charter sector has grown so much that the state now has the most charter schools in the country, and the most charter school students.  It is estimated that there are about 1,275 charter schools, with a collective student population of about 630,000 students in California. Nearly 35 charter schools, with some 25,000 students are run by five for-profit companies. Though the number of charter schools has grown in California, oversight has not….”

Governor Jerry Brown, the founder himself of two charter schools in Oakland, has never been a fan of regulation.  In fact in the past, he has vetoed legislation that would have increased regulation. Last week, Brown, uncharacteristically, signed a law which bans for-profit charter schools, like the state’s affiliates of online schools operated by K12, Inc. The new law also prohibits the practice of nonprofit charter boards of directors’ hiring for-profit management companies to operate their schools. Gov. Brown has received widespread praise for signing—finally—a law regulating his state’s charter school sector.

But Carol Burris, the executive director of the Network for Public Education, spent months researching and writing Charters and Consequences, a blockbuster November, 2017, expose of what she dubbed, “California charters gone wild.” I urge you to review this fascinating report about charter school operations that, you would think, ought to have been banned by law a long time ago. In her response to Jerry Brown’s recent signature of Assembly Bill 406, however, Burris regrets that California’s new law will not effectively control some of the worst practices in California’s for-profit charter sector: “Assembly Bill 406, no matter how well intended, will not shut down California’s for-profit schools anytime soon. In some ways, it may make matters worse by obscuring the reality of what many charter schools are—schools run by private corporations that receive public funding with insufficient oversight and supervision.  And whether they are for-profit or nonprofit, there will still be ample opportunity in the charter sector for profiteers to take advantage of the public treasure and trust.”

In her report last November, Burris described tiny, broke and underfunded elementary school districts that have turned themselves into charter school authorizers and subsequently chartered affiliates of the largest national chain of for-profit charters, K12 Inc. The purpose is simple: Despite that the students in the online school are not required to reside within the boundaries of their school districts, these districts have been permitted to authorize big online charter schools merely for the purpose of collecting authorizing fees to pad their own school district budgets. Now that Gov. Brown has signed the new law, Burris still worries that unscrupulous operators will continue to find ways to negotiate around the details of the regulations.

She describes the Dehesa Elementary School District and an action the district took just last week to get around the new law before it takes effect: “It (Dehesa) has one tiny elementary school of 145 students, yet the district shows a total enrollment of 8,677 students due to its authorization of nine charter schools that can pull students from anywhere in San Diego County and adjoining counties… What is most interesting to note is that three K12 Inc. University Prep online charters, including those in Dehesa… were granted their operational number by the California State Education Department on September 9, two days after Gov. Jerry Brown signed the bill banning for-profit charter schools. That is because the bill does not go into effect until July 1, 2019, giving K12 Inc. and other for-profit corporations nearly a full year during which they can work with authorizers to submit applications for new charter schools… And once they are authorized, they can’t be shut down until they are up for renewal in five years, which gives them a pass until 2024.”

At the Education Law Prof Blog, Derek Black tries to be optimistic. Considering the new California law, he concludes: “(I)t bars the most egregious and problematic behavior out there. And if this is just the first step toward more reform, we should welcome it. On the other hand, this bill leaves an enormous number of problems untouched and, if the public is left thinking those problems no longer exist, California is in a worse position now than it was before the bill.”

Reporting for California’s EdSource, John Fensterwald quotes Michael Kraft, a senior vice president for communications at K12 Inc., who doesn’t seem particularly worried that the new California law will curtail the operation of the affiliates of the nation’s biggest for-profit online charter school. Kraft explains that K12 Inc.’s relationship with its California operator, the California Virtual Academy, “has evolved over the years to the point where they (the affiliates of the California Virtual Academy) are independently run schools and the company does not believe that the bill would change how it currently delivers products and services.” Fensterwald paraphrases Kraft describing K12 Inc.’s plan to continue operating in California: “If it has to make changes to meet the requirements of the bill, then it will.”