Charter Schools Education Industry For-Profit

Jeff Bryant: Charter Industry Lobbies Hard to Prevent Ban on Federal Funding of For-Profit Charters

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Jeff Bryant is one of the best informed writers about charter schools in the nation. He is chief correspondent for Our Schools and director of the Education Opportunity Network. He explains here why the charter industry is using misinformation to stop a Democratic proposal to ban federal funding for for-profit charter schools.

He begins:

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. NAPCS also objects to the legislation’s proposal to cut 9 percent from the federal government’s troubled Charter Schools Program (CSP).

The House budget proposal, which was passed out of the majority Democratic committee “in a party-line vote,” according to the Hill, has been praised by numerous education groups, including the National School Boards Association, the National Education Association, and the National Center for Learning Disabilities, for, among many things, more than doubling Title I funding for schools serving low-income children, providing over $3 billion more to educate students with disabilities, and increasing federal spending on K-12 education programs, Education Week reports.

The legislation mostly aligns with the President Biden administration’s proposed budget for K-12 spending, as reported by Chalkbeat in April 2021, and the provision ending federal funding of for-profit charter school operators reflects Biden’s pledge, made in his presidential campaign, to “not support any federal money for for-profit charter schools, period.”

The For-Profit Charter Problem

The specific provision regarding for-profit charters that NAPCS objects to states, “None of the funds made available by this Act or any other Act may be awarded to a charter school that contracts with a for-profit entity to operate, oversee or manage the activities of the school.”

Controversies over for-profit charter school operators are long-standing and largely unresolved

As University of South Carolina law professor Derek Black explains on his personal blog, “Most states require charter schools to be nonprofit. To make money, some of them have simply entered into contracts with separate for-profit companies that they also own. These companies do make money off students.”

A 2021 report by the Network for Public Education (NPE)—an organization co-founded by education historian Diane Ravitch that advocates for public schools—examined more than 1,000 charter schools that were contracted with for-profit management companies and found that the schools’ nonprofit boards were often mere fronts for profit-making enterprises that use the charter schools they operate to “maximize their profits through self-dealing, excessive fees, real estate transactions, and under-serving students who need the most expensive services.”

Among the practices that for-profit charter operators employ, according to the NPE report, is to establish “sweeps contracts” that “give for-profits the authority to run all school services in exchange for all or nearly all of the school’s revenue.”

The report also “identified over 440 charter schools operated for profit that received grants totaling approximately $158 million between 2006 and 2017,” from the CSP, despite “strict regulations” against awarding CSP funds to charter schools operated by for-profit entities…

NAPCS’s president and CEO Nina Rees told a CNN reporter that the legislation “could impact schools that contract out for cafeteria services, special education services, or back office staff…”

After the CNN article was published, it was updated with a quote from Connecticut Representative Rosa DeLauro, a Democrat who chairs the House committee that drafted the proposal, who called NAPCS’s petition campaign “a well-funded misinformation campaign,” and said, “The language [of the proposed legislation] is clearly focused on ending the practice of charters accepting federal funds only to have the school run by a low-quality, for-profit company rife with conflicts of interest.”

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