Eight senators have proposed a bill that would make it easier for money to flow from the federal grant program for charter schools.
The federal Charter Schools Program (CSP) was founded in 1994; since then the program has dispensed an estimated $4 billion taxpayer dollars to support expansion and development of charter schools, not always resulting in useful outcomes.
A 2019 study from the Network for Public Education showed around a billion dollars in CSP money had been spent on waste and fraud; a follow-up study found even more problems. A 2022 audit report from the U.S. Department of Education’s Office of Inspector General suggested that taxpayer dollars doled out by CSP were not being spent very effectively. Money was being given to operators who never actually opened a school. Nor, the audit found, was the CSP very good at tracking how the money was spent.
In 2022 the Biden administration proposed some rule changes for the CSP, and charter supporters were not happy. The rule changes finally adopted require charters to be more connected to the community in which they operate and require greater transparency, especially when it comes to ties to for-profit companies.
Charter operators have long understood how to get around the restriction that charter schools must be non-profits. It has been common practice for a non-profit charter to be operated by a for-profit charter management organization, sometimes via contract that gives the CMO near-total operational control as well as virtually all the revenue collected by the charter (known as a “sweeps contract”). The rule changes tightened that loophole.
They also put limits on the amount of grant money that could be used for planning and development, which should limit the spending of taxpayer dollars on schools that never actually open.
The charter school sector was not particularly happy about any of these changes. Now S.3072 appears aimed at loosening some of the federal grant purse strings again.
The bill is short, and features some small but significant changes and additions to the language of the part of the law governing the grants (20 U.S.C. 7221b).
S.3072 expands the allowable uses of the grant money to include “locating and accessing a facility” and “funding a revolving loan or similar mechanism for expenses.”
A big addition included in the bill is an expansion of CSP grant eligibility. The bill would authorize “pre-charter planning subgrants” of up to $100,000—grants given to a charter school developer that has not even submitted an application for their plan to be authorized.
These charter school dreams must meet two criteria. First, they must be led by someone with at least 54 months of “school-based experience” and who has “demonstrated leadership competencies and success with students.” The bill includes no requirements that such experience come from a public, private or charter school. The bill is being touted as a way to empower teachers to start their own charter schools, but it’s clear that the language of the bill allows a far broader category than “teachers” to apply for a grant. It would allow charter schools to expand by using current staff to “lead” the establishment of a new charter.
Second, the charter developer should have developed a “description of the educational needs of the community” in which they hope to operate, and some explanation of how the charter school will meet those needs. There is no requirement that the plan be developed by actual survey of the community.
The new rules would mean a bigger payday for the state entity managing the CSP grant. That state entity can be the state itself, the state’s charter board, or a “charter school support organization.” Currently they are required to pass at least 90% of the federal grant monies on to applicants; the new rules would require only 80%, thereby doubling the state entity’s cut. The current rules says they can hang onto 3% of the grant monies for administrative costs; the new rules up that to 5%. And to go with the new category of grant recipients, the bill adds that the state entity can hold onto 5% of the funding to carry out those activities.
The result would be that one out of every five taxpayer dollars used for the federal charter grant program would never actually make it to a charter. On top of that, another portion of the funding would go to charter schools that have not even applies for approval yet.
The bill’s supporters argue that this will help streamline the process of establishing a charter school, but CSP’s problem has never been an excess of red tape but rather, as shown by the NPE studies and the Department of Education audit, a lack of sufficient oversight and accountability. S.3072 doesn’t appear to be interested in addressing that issue.
The bill was introduced by U.S. Senators Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, John Cornyn (R-TX), Cory Booker (D-NJ), Tim Scott (R-SC), Michael Bennet (D-CO), Mike Braun (R-IN), Maggie Hassan (D-NH), and Brian Schatz (D-HI).
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