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Private and Charter Schools Got $6 Billion in Paycheck Protection Program Aid, Study Says

By Andrew Ujifusa — September 01, 2020 3 min read
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Private schools as well as charter schools have received $6 billion in federal coronavirus aid in the form of forgivable loans, according to a study by a nonprofit group.

The estimate published Tuesday by the Committee for a Responsible Federal Budget, which focuses on federal fiscal issues, notes that this Paycheck Protection Program funding is a little less than half of the roughly $13 billion in separate aid provided to states and K-12 school districts for K-12 under the CARES Act, which President Donald Trump signed into law in late March.

The Paycheck Protection Program, which provided loans to businesses and nonprofit entities that can be converted to grants, was funded by the CARES Act and a subsequent virus relief package enacted in April. Traditional public schools are not eligible to apply for PPP money.

In a piece describing its findings, the Committee for a Responsible Federal Budget notes that its analysis “includes forgivable loans to charter schools, which were eligible to participate in the program owing to their quasi-public-private structure, but it excludes many forgivable loans paid to churches and other institutions that may have schools as part of their organization. (Some portion of the $7 billon of PPP loans that went to religious institutions may have effectively gone to private schools.)”

Separate from the group’s analysis about Paycheck Protection Program loans, it’s important to note that the CARES Act says charter schools that function as local education agencies (LEAs) are also eligible to receive subgrants under the $13 billion in the law for K-12 schools, just like traditional school districts. The committee’s analysis does not say how much charters that function as LEAs received under that $13 billion pot of CARES money. (Charter schools that aren’t LEAs can receive CARES money through their districts, according to the U.S. Department of Education.)

The extent to which different types of K-12 schools have benefited from federal coronavirus relief has been the subject of much scrutiny and debate among public school officials, lobbyists, and others in the education sector.

Charter advocates have encouraged their schools to apply for the loans, which can be converted into grants if certain conditions are met, during the economic downturn caused by the pandemic. “The last recession hit charter schools pretty significantly,” said Nina Rees, the chief executive officer of the National Alliance for Public Charter Schools, told us earlier this year for a story about charter schools and PPP loans.

Many private schools, meanwhile, are under significant financial strain due the pandemic, and some have closed; supporters say they deserve relief as well. Education Week recently profiled pandemic-driven Catholic school closures.

However, the PPP loans have also created public-relations challenges in a few instances. Secretary of the Treasury Steven Mnuchin, for example, criticized wealthy private schools for seeking and receiving PPP aid several months ago, and called on them to return it to the federal government.

And charter skeptics say the PPP loans underscore how the schools straddle the line between being public and private entities in ways that traditional public schools cannot. They say charters are taking advantage of money that should instead be going to small businesses and other entities as the economy struggles.

Approximately 85 percent of students attend traditional K-12 public schools, according to recent federal data, while 9.5 percent attend private schools and 5.2 percent attend charter schools.

CARES also included $3 billion in education aid for governors to allocate to K-12 and higher education. At least a few governors have directed some of that money to private K-12 schools.

There’s a high-profile dispute over just how much of the $13 billion in CARES relief must be set aside for private school students. That fight has been taken to multiple federal courts in the last several weeks.

Overall, the group says COVID-19 relief legislation has provided $42 billion to the education sector, including K-12 and higher education. Just over half—55 percent—of that aid has gone to public schools in both K-12 and higher education.

The Committee for a Responsible Federal Budget says its mission is to be an “authoritative voice for fiscal responsibility” and a “trusted budget watchdog.” Its board members include former federal lawmakers and officials.

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