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Education Funding

The Fight Over Charter School Funding in Washington, Explained

By Andrew Ujifusa — July 28, 2021 6 min read
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The relationship between the Democratic Party and the charter school community has grown more complicated in recent years. But now there’s a dispute in the nation’s capital over the right answer this question: Is Congress about to exercise proper oversight and restraint when it comes to certain charters, or is it about to cause sweeping damage to charters in general?

In early July, House Democrats released their legislation for funding the U.S. Department of Education for the upcoming fiscal year. Lawmakers who wrote this fiscal 2022 bill proposed cutting the $440 million Charter School Program, which aims to help successful charter schools replicate and expand, by $40 million next year.

This proposed funding cut isn’t brand-new, even if it’s garnered more attention this year. Democrats in the House tried but failed to enact the same cut last year, and funding remained flat from last year to this. Unsurprisingly, people who support charters have criticized this year’s proposal.

But arguably, the more controversial portion of the new bill dealing with charters is a section stating that no federal funding can go to a charter school “that contracts with a for-profit entity to operate, oversee or manage the activities of the school.”

It’s what that language means that’s causing some drama. Charter supporters are making the case that the language would essentially bar all charter schools from contracting with any private entity for a wide variety of services, from meals to backroom office work. In a July 26 letter addressed to House and Senate leaders, more than 60 national, state, and local groups said that by opposing that bill language, they were defending public school students in general, not just the charter sector.

“Separating out and dividing public school students—treating their funding differently based on the type of public school they choose and then punishing students who choose to attend one type over another—sends a message that the federal government doesn’t believe all public school students are equal,” the groups said.

Rep. John Moolenaar, R-Mich., also criticized how the bill addressed charters in a House appropriations committee hearing: “As students continue to recover from the detrimental affects of the pandemic and the restrictions they’ve had on their education, this committee should not be limiting their opportunities.”

Yet Democrats who are walking point on the bill say they’re actually targeting charters run by for-profit management organizations, and reject the idea that they’re trying to enact sweeping federal budget cuts to charters through indirect statutory language. In a statement, Rep. Rosa DeLauro, D-Conn., the chairwoman of the House appropriations committee, called such rhetoric part of a “well-funded misinformation campaign” that distorts the actual, narrower purposes of the bill.

A Democratic staffer said lawmakers are open to improving the bill language, and that they aren’t “naïve enough to think that everything we write, as written, is sacrosanct.” But the staffer also argued that charter backers are trying to use the vast majority of charters as a shield to protect a small but problematic part of the sector that shouldn’t benefit from federal money.

“The intent is clear with what we’re trying to do,” the aide said.

The disagreement also touches on charters’ general political standing.

Amid the coronavirus pandemic, state lawmakers have expanded school choice this year. But they’ve mostly focused on private school choice. Some have theorized that the growth of many charter schools in big, left-leaning cities, as well as other options like education savings accounts that provide personalization that charters often can’t match, might be undermining charters’ long-term support from GOP officials, although the charter community has rejected that idea. The charter community had a relationship with the Trump administration that was complicated in certain areas.

The House is currently considering its version of the legislation. Ultimately, the House and the Senate have to hash out an agreement on the overall spending bill for the next fiscal year, which starts Sept. 30. It’s unlikely that the Senate will agree to this proposed charter language, but House Democrats could use the provision as leverage to create new restrictions on federal aid to charter schools with for-profit management groups, said Julia Martin, the policy director at Brustein and Manasevit, an education-focused law firm.

Martin said the language is vague and that interpreting it would be left up to the Education Department, but added that no one thinks that a school is using a contractor like Aramark to truly “manage” operations just because it hires the company for food and nutrition services. (Traditional public schools use private companies for services as well, of course.)

“I think it’s kind of a shot across the bow,” said Martin, whose firm represents charter schools in matters unrelated to federal grants management.

Would charters miss out on a big windfall Democrats want for public schools?

Few education policy and governance issues can trigger an argument like charter schools run by for-profit organizations. Essentially, supporters say such arrangements can and do create important educational opportunities that shouldn’t be shunned or prohibited. Critics say they’ve frequently exploited students for financial gain and aren’t held accountable like they should be.

The National Alliance for Public Charter Schools says that 12 percent of charter schools—with 18 percent of the nation’s charter school enrollment—are run by for-profit management organizations.

But the group also rejects the idea that such arrangements make a substantive difference, stating that, “Whether or not a school is operated by a non-profit or for-profit entity has no bearing on outcomes.”

In the past, Rep. Mark Pocan, D-Wis., a member of the House education subcommittee that helps draft these annual spending bills, has highlighted reports pointing to a very high rate of failure for charters funded by federal Charter School Program grants. That information comes from the Network for Public Education, a group founded by Diane Ravitch and Anthony Cody in 2013. Their research into charter schools has been hailed by charter schools’ critics but has also been the target of withering criticism from charter supporters who say the research is riddled with “avoidable errors.”

What else have House lawmakers said?

A mid-July committee report explaining various elements of their fiscal 2022 spending bill says the language in question focuses on “preventing Federal funds from being awarded to charter schools run by for-profit entities.”

Public schools in general stand to benefit significantly from the House legislation. It features a massive increase in aid to K-12 schools, including an increase of nearly $20 billion for disadvantaged students. If you set aside the controversial language in question, summaries of the legislation and the bill language dealing with funding increases don’t appear to exclude charter schools.

The Democratic staffer also said U.S. Secretary of Education Miguel Cardona, for example, would be highly unlikely to use the language in question to withhold all federal funding from all charters that contract with for-profit entities for any service.

President Joe Biden has signaled his opposition to for-profit organizations running charters. As education secretary, Cardona has not positioned himself as a particularly strident friend or foe of charters in general.

Martin noted that for-profit private schools aren’t eligible to participate in equitable services, under which school districts have to support things like tutoring and professional development to aid certain at-risk students in private schools. At the same time, she said, federal loans can be used at for-profit colleges, a controversial issue to say the least.

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