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 TimesErica 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.

Jeb Bush’s Pitiful Attempt to Defend Federal Funding of Charter Schools Managed by For-Profit Companies

It’s clear that the charter school lobby is upset about the House of Representatives’ effort in its proposed budget resolution to curtail abuses in the federal Charter Schools Program and to reduce the program’s appropriation by $40 million in the upcoming fiscal year.

Jeff Bryant explained last week: “The top lobbying group for the charter school industry is rushing to preserve millions in funds from the federal government that flow to charter operators that have turned their K-12 schools into profit-making enterprises, often in low-income communities of color. The group, the National Alliance for Public Charter Schools (NAPCS), objects to a provision in the House Appropriations Committee’s proposed 2022 education budget that closes loopholes that have long been exploited by charter school operators that profit from their schools through management contracts, real estate deals, and other business arrangements.”

The executive director of National Alliance for Public Charter Schools, Nina Rees went on C-Span to try to defend the program, and now it’s clear that the organization is calling on old allies to push Congress to cancel the House Appropriations Committee’s proposed elimination of all federal funding for charters operated for-profit by Charter Management Organizations. Bryant reminds us that Nina Rees was the deputy assistant for domestic policy for former Vice President Dick Cheney.

This week Jeb Bush, the ultimate old advocate for school privatization, came out of the woodwork with an op-ed circulated all over the country by the Tribune News Service. Bush’s piece appeared in our Sunday Cleveland Plain Dealer. Toward the end of his article, Bush gets to the point and protests the proposed House Budget Resolution: “Not only does it specifically cut $40 million in education funding (from the Charter Schools Program), but the House budget bill also includes alarming language that would prevent any federal funds from reaching any charter school ‘that contracts with a for-profit entity to operate, oversee or manage the activities of the school.'”

Bush thinks that the U.S. Department of Education ought to be allowed to make grants to charter schools whose operators are, in many cases, collecting huge profits at the expense of our tax dollars and at the expense of children whose education programming is reduced to ensure operators can make a profit. I guess he isn’t bothered by the charter management companies that have managed to negotiate sweeps contracts that gobble up more than 90 percent of the state and federal operating dollars and manage the school without transparency.

The Network for Public Education (NPE) just published a major report, Chartered for Profit, that details how all this works. Recently NPE’s executive director, Carol Burris was interviewed about the extent of the problem: “The original charter is secured by the nonprofit, which gets federal, local, and state funds, and then the nonprofit turns around and gives those funds to the for-profit company to manage the school… Now, some of these for-profits only provide a limited amount of services. But an awful lot of them, especially some of the big chains like National Heritage Academy, operate using what is known as a ‘sweeps’ contract. The reason they’re called that is the for-profit operator sweeps every penny of the public money that a charter school gets into the for-profit management company to run the school. The for-profit then either directly provides services, from management services to cafeteria services, or they contract out with another for-profit company to provide services.  Either way, the goal is to run the charter school in such a way that there’s money left over. And the more money they save by doing things like hiring unqualified teachers and refusing to teach students with special needs, the more money is left at the end of the day.”

In his recent commentary, Bush buries his defense of for-profit charter school management companies near the end of an article packed with tired, meaningless rhetoric. He begins by alleging that our system of public schools derives from an “outdated mentality”—a factory model dating from the 1890s that won’t work in the “21st century economy (which) is vastly different.” I guess he means that public schools haven’t kept up with the times, or maybe he is implying that something is wrong with what kids are learning in public schools.  When he explains that public schools serve 56.6 million students and charter schools serve 3.3 million students, one wonders why he fails to recognize that investing federal dollars to improve the nation’s public schools would be the best strategy for serving the mass of America’s students. After all, in a well known study, economist Gordon Lafer has explained 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.

Next, Bush references a litany of studies, based, he says, mostly on the National Assessment of Education Progress (NAEP).  He claims this research proves that charters are better academically. Without specific references, it is hard to know which studies he is citing, although he does name one source—from the University of Arkansas, where the Department of Education Reform is a think tank funded by the Walton Foundation.

In her recent book, Slaying Goliath, Diane Ravitch, who served for several years on the NAEP Governing Board, refutes Bush’s argument that charter schools are academically superior: “Charter schools on average get about the same results when they enroll the same demographic groups of students. Those charter schools that report outstanding test scores typically have high rates of attrition and do not enroll the most difficult to educate students, such as English language learners and students with disabilities. Charters have the freedom to write their own rules about suspensions and discipline and some have used this freedom to push out the students they don’t want, those who are discipline problems, and those who can’t meet the school’s academic demands, who then return to public schools.” (Slaying Goliath, p. 135)

Next, in an argument that would be funny if it were not so sad, Bush claims that critics of for-profit charter schools are captives of the money-grubbing teachers unions. “(U)nions fear that choice will lead to fewer students attending schools that fund their private coffers… It’s a feedback loop without a soul.”

And finally, Jeb Bush explains that, by defunding for-profit charter schools, members of the House of Representatives want to eliminate federal support for the education of “millions of students, especially our nation’s special-needs students who qualify for funding under the Individuals with Disabilities Education Act, and our students living in poverty.” Has Bush not read President Biden’s budget proposal, whose public school investments are copied in the House of Representative’s proposed budget resolution? The President and the House Appropriations Committee propose to increase funding for wraparound Full-Service Community Schools from $30 million to $443 million, double Title I funding for schools serving concentrations of poor children, and significantly increase funding for the Individuals with Disabilities Education Act.

Jeb Bush and his Foundation for Excellence in Education, now called ExcelinEd, have been advocating for charter schools and school privatization for years. To promote these very ideas, Bush and ExcelinEd spawned Chiefs for Change (which has since become an independent organization) in order to promote school privatization and corporate school accountability among state school superintendents and commissioners and local school superintendents.

Betraying his long alliance with our former education secretary, Betsy DeVos, Bush condemns public schools because, he writes, they are a system which is not designed to serve individual students. The move to privatize public education is merely an expression today’s wave of libertarian individualism (at public expense) and consumerist, market-place thinking.

It is useful to keep in mind the warning of the late political theorist Benjamin Barber: “Privatization is a kind of reverse social contract: it dissolves the bonds that tie us together into free communities and democratic republics. It puts us back in the state of nature where we possess a natural right to get whatever we can on our own, but at the same time lose any real ability to secure that to which we have a right. Private choices rest on individual power… personal skills… and personal luck.  Public choices rest on civic rights and common responsibilities, and presume equal rights for all. Public liberty is what the power of common endeavor establishes, and hence presupposes that we have constituted ourselves as public citizens by opting into the social contract. With privatization, we are seduced back into the state of nature by the lure of private liberty and particular interest; but what we experience in the end is an environment in which the strong dominate the weak… the very dilemma which the original social contract was intended to address.” (Consumed, pp. 143-144)

Are Charter Schools Public or Private? Trying to Have It Both Ways When Federal Emergency Money Is Involved

One reads that a pandemic is likely to inspire greed as people struggle protect themselves and their loved ones.  Right now that theory seems to be confirmed by the behavior of charter school advocates, who want to have it both ways. Such advocates call their institutions “public charter schools,” but when it is convenient, the same prominent advocates insist that charter schools should qualify to benefit from federal funds appropriated for the purpose of shoring up small businesses.  Public and private all at the same time.

Nina Rees is the president and CEO of the National Alliance for Public Charter Schools. On Wednesday, she published a commentary in which she poses as a supporter of the needs of public schools and charter schools alike. She affirms the importance of the $13.5 billion in the emergency federal CARES Act, money to provide relief for publicly funded schools including traditional and charter schools: “First, the $13.5 billion in emergency K-12 funding that Congress passed will be allocated to states and distributed to Local Education Agencies (LEAs) according to the formula that guides Title I funding. Districts and schools that typically receive Title I funds should see around 80 percent more money this year. Charter schools that operate their own LEAs are assured funding. Those that are overseen by school districts will rely on their districts to provide funding. Secretary DeVos and governors should encourage districts to make these decisions solely in the interest of students, without regard to differences in school model.”

The website of Rees’ organization, the National Association for Public Charter Schools, on the other hand, promotes a strategy for charter schools as though they are private businesses and not public schools at all. The organization’s website explains how charter school operators can qualify for loans designed not for educational institutions, but instead for small businesses which have been temporarily shut down: “Some charter schools may be struggling with how to meet current expenses to maintain ongoing operations. The CARES Act, the third and most recent federal relief package, makes two low- or no-cost lending programs available through the Small Business Administration (SBA); these funds are designed to help organizations continue paying employees, utilities, rent, mortgages, and similar operational expenses. Charter schools that have a 501(c)3 status with the iRS, and for- or non-profit education management companies with fewer than 500 employees may be eligible to apply for SBA 7(a) Paycheck Protection Program or SBA Economic Injury Disaster Loans… Under the CARES Act stimulus package, it is possible to access a loan valued at up to two-and-a-half months of payroll expenses… As a result of the first COVID-19 relief bill, Economic Injury Disaster Loans is offering up to $2 million in assistance to nonprofits and for-profits to help overcome temporary loss in revenue caused by COVID-19… Click here for details and how to apply.”

For Education Week, Evie Blad reports on the ethical dilemma posed when advocates try to have it both ways by defining charter schools as private businesses and at the same time as public institutions: “The possibility has already stirred discussions in some cities. In the District of Columbia, for example, charter schools say they have racked up unexpected expenses for items like Chromebooks as they helped students quickly transition to online learning, the Washington Post reported last week. ‘We are in an ethical dilemma,’ D.C. Council member and Education Committee Chairman David Grosso told the Post.  ‘The challenge is digging deep inside of yourself and seeing where you see yourself in the pecking order of needs in our community.'”

Examining the controversy as it is unfolding in Washington, D.C., the Washington Post‘s Perry Stein explores why there seem to be serious conflicts of the public interest when the needs of charter schools are elevated over other schools by claiming access to two different streams of relief funding—the first being provided for public schools and the second for private businesses: “D.C. charter schools get most of their funding from the government, a revenue stream that continues to flow as the coronavirus grinds the District’s economy to a halt… Charter schools, which educate 47 percent of the city’s nearly 100,000 public school students, are publicly funded and privately operated. The city spends a base of about $11,000 to educate each public school student in both sectors.  Though some charter schools receive private donations, the bulk of their funding comes from the government… Under federal law, the District is required to set up a uniform formula to fund charter and traditional schools equally on the basis of enrollment. The city provides buildings to the traditional public school system and allocates additional money to each charter student so their schools can acquire and maintain their facilities. The traditional school system would not qualify for the federal small-business loans.”

The executive director of the Network for Public Education, Carol Burris condemns charter school advocates’ efforts to get whatever they can for their own education sector—privately operated and publicly funded—at the expense of public schools and at the expense of struggling small businesses which have been closed temporarily due to the pandemic: “I have great sympathy for small businesses that are devastated by COVID-19.  And I am glad that the Small Business Administration is giving these businesses low-interest loans to cushion the blow.  It is shocking, therefore, that the National Alliance for Pubic Charter Schools is actively encouraging its members to take advantage of those taxpayer funds intended for small businesses, although… (charter schools’) income has not been interrupted at all… Charters claim to be public schools—except when being a ‘business’ is to their advantage. Charters claim to be public schools when that’s where the money is. But when the money is available for small businesses, they claim to be small businesses.”