School Choice & Charters

Biden Administration Tightens Rules on Charter School Funding Program

By Libby Stanford — July 01, 2022 7 min read
Students in Monica Farren’s 6th grade English class read outside during a poetry exercise at Albert Einstein Academy Charter Middle School in San Diego.
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Incoming charter schools will have to gather community input and prove they aren’t managed by a for-profit company to receive federal funding under the Biden administration’s finalized Charter School Program rules.

The U.S. Department of Education’s final notice on the new regulations published July 1 is the latest development in the controversy surrounding charter school rules. Since the proposed rules were published for public comment in March, charter school advocates—including a group of 18 congressional Republican lawmakers, Colorado Gov. Jared Polis, and the National Alliance for Public Charter Schools—have spoken out against them, arguing they place unnecessary obstacles in the way of new charter schools. The final rules ultimately eased some of the charter school advocates’ concerns and continued to draw support from those who’d like to see government regulation of charter schools.

The proposed rules received over 25,000 comments from the public, Anna Hinton, director of the department’s Charter School Program, said in a blog post. “We are all working toward the same goal of ensuring students from all ages, backgrounds, and communities have access to high-quality education, including through high-quality public schools,” Hinton said.

The rules place tighter restrictions on the Charter School Program, a federal grant that funds charter schools in their first three years of operation. The upcoming grant process will provide $77 million in funds for charter schools, Hinton said.

Charter schools can still open and operate without the funding through the program, and not every charter school relies on it. From 2006 to 2017, the Education Department awarded grants to about 3,100 schools through the program, according to the office of elementary and secondary education. Around 7,700 charter schools were operating in 2021, according to the alliance for public charter schools.

Administration’s policy goals

The administration’s goal in issuing the new rules is to prevent private companies from using federal dollars to open charter schools and to curb premature closures. Fifteen percent of the charter schools that receive funding from the program either never open or close before the three-year grant period is over, department officials have told Education Week.

In an effort to prevent premature closures, the new rules place a heavy emphasis on public engagement. Schools applying for funding would have to complete a “needs analysis” to demonstrate the need for a new school in the area.

The initial proposed rules stated that charter school applicants could point to overenrollment in public schools as an indicator of need in their analysis. That worried charter school advocates who felt that charter schools are still needed in communities where overcrowding isn’t happening.

“The [Charter School Program] has always supported the creation of additional high-quality educational options for children in all communities that need them, not just in districts with overcrowded schools; this must continue,” the National Alliance for Public Charter Schools wrote in an April 18 letter in response to the proposed regulations.

The final rules provide a more flexible set of options for proving that a charter school is needed. Charter school applicants are able to demonstrate need by providing data on access to high-quality schools in the community, submitting information on waiting lists for existing charter schools, proving interest in a specialized instructional approach, or furnishing a copy of the needs analysis conducted as a part of the charter school application submitted to a charter school authorizer.

Assuring no interference in desegregation efforts

In the analysis, charter school applicants must also demonstrate that the new school wouldn’t negatively affect school desegregation efforts in the community. Applicants would have to describe steps they would take to avoid increasing racial or socioeconomic isolation in the public schools that would lose students to the charter school. Applicants that are already located in a racially or socioeconomically isolated community will still be considered for the funding as long as they aren’t creating an environment that further segregates based on race and socioeconomic status.

“The Department recognizes that there are many districts that serve almost entirely students of color or students from low-income backgrounds, including Tribal communities, which in some instances may be due, in part, to redlining,” Hinton said in the blog post. “High-quality charter schools that increase educational opportunities in these already homogeneous and isolated communities, or for underserved students, were always intended to be—and are—eligible for funding under the final priorities, requirements, definitions, and selection criteria, and will not be at a competitive disadvantage for funding.”

Collaboration with traditional schools not required

The final rules also remove language that indicated charter school applicants would be required to partner or collaborate with a traditional public school. The initial proposed rules included the language as an effort to foster positive relationships between charter schools and their communities, allow for networking, and encourage innovative solutions to community issues.

But charter school advocates, like the charter school alliance, worried the rules would give public schools the power to prevent a charter school from opening by not partnering with them. The final rules state that partnerships with public schools are strongly encouraged but not required.

“These collaborations can bring more resources to charter schools and the students they serve, better meet the needs of English-learners and students with disabilities, and create professional learning communities for educators,” Hinton said. “However, we acknowledge that these types of collaborations may not be available in every district.”

Implications for the for-profit sector

The new rules also take aim at for-profit charter organizations. Since his campaign in 2020, President Joe Biden has admonished charter schools that operate under for-profit companies, stating on the campaign trail that he’s “not a fan of charter schools.” Between September 2020 and February 2021, the Network for Public Education, an organization dedicated to rooting out corruption in charter schools, identified 1,100 charter schools with contracts with for-profit companies.

Charter school applicants will have to prove they are not under the control of a for-profit company and divulge if they have or plan to contract with a for-profit education management organization. If schools do plan to contract with a for-profit organization, they’re required to include all of the details of their contract in their application, including the amount of federal money that would go toward the services under the contract, any conflicts of interest, and information on the governing board members of the for-profit organization.

Reaching a middle ground

The final rules managed to appease vocal advocates on both sides of the fight over charter school funding. Carol Burris, executive director of the Network for Public Education, said she’s optimistic the rules will lead to fewer for-profit charter schools and premature school closures.

“My guess is that is going to mean that at the end of the day few, if any, charter schools run by for-profit organizations are going to be applying for these grants,” she said. “That doesn’t mean that these organizations are going to disappear, they’re not. A lot of them have plenty of money to start charter schools, but at least it won’t be coming from federal funds.”

The final rules are “less harmful than the original proposal,” Nina Rees, president and CEO of the alliance for public charter schools, said in a July 1 statement.

“It is clear our collective voices were heard and some of the most troubling aspects of the proposed rules that relate to community impact analysis, diverse charter schools, and the burdensome nature of the application process itself are improved,” Rees said.

However, Rees believes the Education Department is placing a strain on charter school applicants with its timing for the grant funding process. The application for grant funding opened Tuesday and applicants have until Aug. 5 to apply. The 30-day window is too short of a time period for incoming charter schools to adjust to the new rules, she said.

The department tried to address the short timeframe by streamlining its process to allow schools seeking federal grant money to use application materials they may have already submitted to charter school authorizers, Hinton said in her blog post. The department is also committed to providing technical assistance to charter school applicants, she said.


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