Charter School Lobby Agitates to Prevent the U.S. Department of Education from Improving Regulation of the Federal Charter Schools Program

The U.S. Department of Education has proposed new rules to tighten up the awarding of grants through its own Charter Schools Program. Seems like a good thing, right? So why did the Department’s proposed new rules lead to a big protest rally of charter school supporters from around the country in front of the White House last week?

The NY Times‘ Erica Green explains the proposed rules: “The proposal would add requirements to the application process for grants from the federal Charter Schools Program, which has doled out billions of dollars over nearly 30 years to help open new charter schools or expand existing ones. It sets tighter restrictions on the schools’ relationships with for-profit entities and encourages more collaboration between charters and the districts they operate in. The most controversial part of the plan would require grant applicants to prove demand and community support for their schools, examine the effect they would have on neighboring district-run schools, and demonstrate that they would not exacerbate segregation.”

The proposed rules would not affect the state laws that establish charter schools and the rules under which charter schools operate in 45 states. The new rules would be limited to establishing that federal grants could no longer be awarded to charter schools operated by for-profit Charter Management Organizations, and that to qualify for a federal grant, a charter authorizer would have to show there is a need for the new school.  This is the sort of sensible regulation that ought to have been part of the program when it was established back in 1994.

During the Clinton administration and through the Bush and Obama administrations, charter schools were popular among neoliberal Democrats who saw publicly funded but privately operated charter schools as kind of a nice compromise with the more visceral school privatization advocates like Betsy DeVos.  Now a lot of Democrats, including the Biden administration, have become more aware of poor regulation of charter schools by states and the federal government, graft and corruption in the misuse and sometimes theft of public funds, and the reality that despite their promises, charter schools on the whole have not surpassed public schools in helping students achieve academically.

As Green reports, some of the Democrats who have always been and continue to be strong supporters of charter schools are angry: “The rally came on the heels of several high-profile denouncements of the proposed rules, including opinion pieces by Michael Bloomberg…. and Gov. Jared Polis of Colorado….  Senators Dianne Feinstein of California, Cory Booker of New Jersey and Michael Bennet of Colorado joined Republicans in asking the department to revise them.”  But an increasing number of Democrats see the need for better oversight.

Green quotes Carol Burris, the executive director of the Network for Public Education as a prime supporter of the new rules and Nina Rees, the president and chief executive of the National Alliance for Public Charter Schools as a leading opponent of more stringent regulation of the federal Charter Schools Program.  It is important to be very clear about what these organizations are.

Rees’ organization, the National Alliance for Public Charter Schools is the primary mouthpiece for the charter school sector. It has a 32 person staff and is well funded by philanthropists, charter school authorizers, and operators of charter schools. When the National Alliance for Public Charter Schools sponsors a rally at the White House, the organization can afford to fly in charter school parents from around the country to speak for their schools. But the testimony of satisfied parents passionately defending their experience with particular charter schools is not the whole story.

The Network for Public Education (NPE)—a national, volunteer, good government, public school advocacy organization—has been a primary critic of waste and fraud in the charter school sector’s spending of tax dollars, especially by the for-profit Charter Management Organizations. NPE has also condemned the damage to public school districts by rapid charter school growth. Its members have supported a tiny, four-person, mostly part time staff conducting research about what is really happening in the charter school sector.

Despite that federal law has previously prohibited grants to for-profit charter schools, in a 2021 report, Chartered for Profit, the Network for Public Education exposed that too many nonprofits have been turning over virtually all of their state and federal dollars to a for-profit management company without any oversight of the use of the money: “Despite strict regulations against the disbursement of funds from the federal Charter Schools Program to charter schools operated by for-profit entities, we identified over 440 charter schools operated for profit that received grants totaling approximately $158 million between 2006 and 2017, including Charter Schools Program grants to schools managed with for-profit sweeps contracts.”

In an earlier report, Asleep at the Wheel, the Network for Public Education found that the U.S. Department of Education has not been a responsible steward of taxpayer dollars in its management of the Charter Schools Program. “Based on what we found, we believe it is likely that one billion dollars of federal ‘seed money’ has been wasted on charters that never opened or shut their doors. We were equally dismayed to find that many of the Charter Schools Program-funded charter schools that survived did not fulfill their stated mission, especially in regard to enrolling proportionate numbers of disadvantaged youth. As public dollars are pulled from public schools and a more disadvantaged student body is left behind, the students who attend their neighborhood schools have fewer resources and greater challenges.”

Research from the Network for Public Education has been replicated by other researchers. In a report for In the Public Interest, economist Gordon Lafer showed how charter schools in just one school district, Oakland, California, suck $57.3 million every year out of the public schools that serve the majority of Oakland’s children and adolescents.  Amazingly, in a series of biennial reports, the U.S. Department of Education’s own Office of Inspector General has condemned the Department’s Office for Innovation and Improvement for poor oversight of the Charter Schools Program.  And in 2021, Wagma Mommandi and Kevin Welner, the director of the National Education Policy Center, published a book, School’s Choice: How Charter Schools Control Access and Shape Enrollment, showing all the ways charter school operators select their students and leave behind in public schools the students who are most likely to need additional expensive additional services—including disabled students and English language learners.

I live in Ohio, where the charter school sector has been out of control for over two decades. When the U.S. Department of Education published its proposed new rules and asked for public comment, I was moved by the comment submitted on behalf of Policy Matters Ohio by Piet Van Lier, who strongly endorses the proposed rule that would ban federal grants to nonprofit charter schools managed by for-profit management companies: “More than 10 years ago Policy Matters began tracking abuses by for-profit management companies operating schools in Ohio. We documented abuses by Imagine Schools, which had a poor record of performance in our state and a business model driven by elaborate school real estate transactions, high management and operations fees paid by nonprofit schools to the corporation, overlapping business relationships, low spending on classroom instruction, and tight control of school finances and business relationships.”

Van Lier continues: “Our subsequent research found additional problematic practices by management corporations including: hand-picking board members of charter schools that are by law responsible for school operations; preventing schools from hiring their own independent attorneys, accountants, and auditors; binding schools to them contractually and financially, making it impossible to seek new management; controlling school revenue from public sources; claiming ownership of school equipment purchased with public funds; and loaning money to schools well above market rates. We also documented the practice of management corporations pretending to comply with Ohio law mandating school closure for poor academic performance by simply changing the names of schools and re-opening them in the same location with largely the same staff. These practices continue today.”

Policy Matters also endorses the need for charter school startups to conduct an impact study and demonstrate the need for the new school: “Examples abound… of charter schools opening simply because they have access to a building and want the public funding that will flow to the school, even if they cannot meet enrollment targets and have no evidence that they have talked to families and other stakeholders in the community about what kinds of schools are needed. Requiring schools and operators to demonstrate community need and interest in their models is simply good policy and will prevent the over-saturation of charter schools many urban areas already face.”

We should certainly not be surprised when the charter school lobby, represented by the National Association of Public Charter Schools, sponsors a rally to protest more stringent rules to block the flow of federal funds to charter schools.  We must also hope that staff in the U.S. Department of Education carefully read the thousands of comments thanking the Department for proposing new regulations to end the flow of federal dollars to for-profit management companies and to require charter school sponsors to consider the needs of the communities where they propose to locate new charter schools.

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Myths and Hype Fueled Charter School Expansion: Here Are 8 Essential Facts

If you value the role of public schools—locally governed, publicly owned and operated—whose mission is to serve the needs and protect the rights of every child, you can be more supportive if you know the facts about charter schools. The public schools across the United States enroll 50 million students, 90 percent.  Charter schools suck money out of state budgets and public school districts while they enroll only 6 percent of American students. We all need to be actively refuting the myths and calling politicians on their errors when they betray their ignorance about the problems posed by the privatization of public education.

Here are eight facts to keep in mind:

1. While their promoters try to brand them as “public charter schools,” charter schools are a form of school privatization. Charter schools are private contractors whose expenses are paid with tax dollars. Their boards operate privately—very often without transparency.
2. For-profit charter schools are permitted in only two states—Arizona and Wisconsin. In the 43 other states whose laws permit charter schools, the schools must be nonprofits.
3. Nonprofit charter schools are increasingly operated—and often highly controlled—by for-profit Charter Management Organizations (CMOs).  Sometimes, in something called a sweeps contract, a nonprofit turns over 90 percent or more of its operating dollars to the for-profit management company it has hired to run the school—meaning that the for-profit essentially runs the school.  But that school is technically a nonprofit. Eighty percent of Michigan’s charter schools are operated by for-profit CMOs.
4. Charter schools are established in state law in 45 states and the District of Columbia. (West Virginia, the 45th state, just passed charter school enabling legislation in June, 2019.)  There are no federal laws that set up or regulate charter schools.
5. Across the states, charter school fraud and corruption has run rampant due to weak regulation by state legislatures.
6. Charter schools and their supporters and lobbyists have used their power to promote charter schools across the state legislatures. Groups like the National Alliance for Public Charter Schools, the American Legislative Exchange Council (ALEC), ExcelinEd (Jeb Bush’s group), and the American Federation for Children (Betsy DeVos’s group) have lobbied for charter school expansion, and deregulation. Many state legislatures have passed “model” bills which were written and distributed by ALEC’s Education Committee to members of state legislatures who are also members of ALEC.
7. No state has passed additional taxes to fund charter schools.  When states create charter schools, children who leave public schools to enroll in charters carry away state dollars and essential funding from the public school districts where the children were previously enrolled (see here and here). Public school districts are unable to compensate fully for the loss the public dollars that used to pay for public school services but have now been redirected to a privatized sector.
8. Since it was begun in 1994, the federal Charter Schools Program has served as a sort of venture capital fund with grants to states to fuel the startup and expansion of the charter school sector. More than $1 billion has been wasted on charter schools which never opened or eventually shut down.  Proponents of the program, including Education Secretary Betsy DeVos have claimed this waste of tax dollars is acceptable because the money fueled educational innovation and entrepreneurship—even if there was a high rate of failure.

Several of the Democratic candidates for President of the United States have been playing to public school supporters by opposing for-profit charter schools. For the American Prospect, Rachel M. Cohen reports that by opposing for-profit charters, several of the candidates seem to be distancing themselves from charter schools; she adds that two or three have even supported the idea, endorsed by the NAACP, of a moratorium on new charter schools until their impact has been carefully assessed. Cohen adds that candidates seem to be noticing public opinion polls that report “dwindling support among white Democratic voters” for charter schools.

Candidates ought to be calculating their positions based on the facts, however, not on shifts in political opinion.  If you know the 8 essential facts about charter schools described in this post, you will wonder:

• How can so many of the candidates be so ignorant about the relative absence of for-profit charter schools?
• Do these politicians not know that the for-profit Charter Management Organizations (CMOs), not the charter schools themselves, are sucking profits from the tax dollars allocated for the nonprofit charter schools they manage?
• How can so many candidates seem unaware of the importance of our nation’s world class system of public education and poorly informed about the ways the public schools are threatened by the expansion of charters?
• Are candidates trying to have it both ways—by being for and against charter schools at the same time?
• Why do so many of the candidates not care enough to become informed about the needs of public schools and the challenges school privatization poses for public school districts?

Maybe the level of misunderstanding or the amount of disinterest is because school privatization, like school funding, is primarily a state-by-state issue.  But there is at least one area in which the matter of charter schools ought to be of urgent interest to every member of Congress and every Democratic candidate for President: the demonstrated catastrophe of the federal Charter Schools Program.  (See fact #8.)

The following question ought to be asked at every candidates’ debate or forum or town hall or coffee with a Democratic candidate for President:

The federal government—through the federal Charter Schools Program—has been subsidizing the startup and expansion of charter schools with grants to states. But the Network for Public Education and even the Department of Education’s Office of Inspector General have criticized this program due to the utter absence of oversight. More than $1 billion has been invested through this program in schools that never opened or that ultimately shut down. Will you pledge to terminate the federal Charter Schools Program program?