School & District Management

For-Profit Charter Schools Show Poor Academic Growth

By Arianna Prothero — June 12, 2017 3 min read
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Students in charter schools that are run by for-profit companies perform markedly worse than their peers in charters managed by nonprofit groups, according to a new study.

These findings—released during the largest annual gathering of the charter school movement—could potentially drive a wedge further into a growing rift among charter school advocates over the role of for-profit companies in the sector.

What the Study Found

The study, conducted by the Center for Research on Education Outcomes at Stanford University, or CREDO, found that, on average, students attending nonprofit-run schools had faster academic growth than those in for-profit schools that was equal to about 23 extra days of learning in math and six extra days in reading.

Students in nonprofit charters also saw faster academic growth than their peers in traditional public schools, equal to about 11 extra days of reading and math.

CREDO’s study also compared performance between students in for-profit charters and their peers in traditional public schools and found that students in for-profit charters do no better in reading, and perform worse in math.

Where all charter schools stumbled is in serving special education students. For example, in charter school networks (where a single organization holds the charter for three or more schools, according to the study), students receiving special education fell behind their peers in traditional public schools in math by the equivalent of about 86 days over the course of a year. For all other types of charters schools, the number was 108 days.

Interestingly, the few schools categorized by CREDO as “hybrids"—charter networks that hire vendors to operate their schools—saw boosts equal to an extra 51 days in math and 46 days in reading. The report notes that those effects are largely driven by schools in two states: Florida and Michigan. They also were the only type of school in which special education students demonsrated more academic growth than their counterparts in district schools.

However, hybrid schools, such as the Chicago International Charter Schools, only educate about 60,000 students out of the 5 million in charters nationally.

CREDO researchers looked at more than 5,700 charter schools in 24 states as well as in New York City and the District of Columbia. They found wide variations in charter school performance based on the state.

Big Picture: Debate Over For-Profit Charters Is Heating Up

The growth of nonprofit charter management organizations has been fueled in large part by a handful of wealthy donors—such as Eli and Edythe Broad and the heirs of Walmart founder Sam Walton, both families with billions to their names.

But the ideological flip side—which supports for-profit charter groups as well as virtual schools and private school vouchers—has its own billionaire boosters, most notably the family of U.S. Education Secretary Betsy DeVos.

This split has been most apparent in debates over virtual charter schools, the vast majority of which are run by for-profit companies.

President Donald Trump’s embrace of charters and school choice, and his selection of DeVos as education secretary, has further laid bare a divide among choice advocates over the role of for profit companies and private schools in the school choice movement. For an example of this, check out the reaction to Trump’s proposed education budget.

More About CREDO

Although CREDO has its detractors, its research is widely considered some of the most rigorous on charter school performance. CREDO uses a unique research method where it matches charter and traditional public school students based on a series of criteria that include demographics and academic performance. It then compares the academic growth of these “virtual twins”. (More on CREDO’s methodology in the full report.)

CREDO also converts its findings on academic growth and performance into days of learning lost or gained.

Taken together, CREDO’s studies have shown charter school performance to be a mixed bag, and as a result, are regularly cited by both charter supporters and opponents, depending upon the outcome of a particular study.

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A version of this news article first appeared in the Charters & Choice blog.