School Choice & Charters

What’s Behind the Fight Over the Biden Administration’s Stance on Charter School Funding

By Libby Stanford — June 06, 2022 8 min read
Publish Charter school parents stage a counter protest as thousands of public school teachers, administrators and supports march through the streets of Sacramento during a protest held at the California State Capitol urging state legislators to provide more funding for public schools in Sacramento, Calif., on May 22, 2019.
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The Biden administration’s push to tighten the use of federal charter school aid continues to draw heat, with the U.S. Department of Education combing through more than 26,000 public comments on rules it proposed in March.

The changes would add restrictions on schools applying for the federal Charter School Program, which provides grant money to charters in their first three years of operation.

Since its inception in 1995 through July 2019, the program awarded over $3.9 billion to fund public charter schools, according to the most-recent data from the Education Department’s office of elementary and secondary education. From 2006 to 2017, schools received an average of about $500,000 each from the grants included in the program.

The Biden administration’s intent is to put a tighter leash on the use of the federal money by private entities and prevent premature closure of charters. The administration also hopes to maximize community support and assure charters don’t interfere with school desegregation efforts.

But for some in the charter community, the proposals are an attack on the education model itself. Since they were released, charter school advocates including Colorado Gov. Jared Polis, a group of 18 Republican congressional lawmakers, and the National Alliance for Public Charter Schools, have spoken out against them.

Here are details on some of the most controversial elements, what supporters and opponents say about them, and where the process stands.

Charter school closure rates are a top administration concern

From 2006 through 2017, the Office of Elementary and Secondary Education provided grants to 3,138 schools through the program.

But 15 percent of the charter schools that receive funding through the federal program either never open or close before the three-year grant is complete, said Jessica Cardichon, a deputy assistant secretary with the U.S. Department of Education’s policy development office.

From 2014 to 2018, charter schools had a higher annual closure rate—5.4 percent—than private and traditional public schools, according to a study from the National Center for Research on Education Access and Choice, a nonprofit providing research to inform school choice policies.

Education Department officials hope the new rules will support successful charter schools that remain open long after three years, Cardichon said.

“There is a place for high-quality charter schools across all of our grant programs,” she said. “We are always looking for ways to strengthen the implementation of those programs.”

But charter school supporters feel officials shouldn’t dwell on closure rates because of three- to four-year lags in data that make it hard to determine what is happening in real time. Instead, they say, officials should focus their efforts on rewarding charter schools that are successful.

“I would steer clear of micromanagement and instead think of all the positive things charters have done and reward those behaviors,” said Nina Rees, president and CEO of the charter alliance.

Community impact as a major flashpoint

Broadly, the proposed rules would require charter school applicants to have a better understanding of how their schools would impact local public school districts and demonstrate no ties to for-profit companies.

Charter advocates are concerned that the proposed rules will discourage incoming charter schools from pursuing grants, preventing schools that don’t already have substantial outside funding from coming to fruition. Fifty percent of all charter schools rely on the program for their initial funding, Rees said.

“If the funds are this complicated to access it will dampen the sector’s interest in opening more schools,” Rees said. “A lot of charter management organizations that were potentially relying on these funds to take their schools to more neighborhoods may think twice.”

Under the proposed rules, applicants would have to complete a community impact analysis to demonstrate the need for a new school in the area.

The analysis also would require applicants to show that the new charter school wouldn’t negatively affect desegregation efforts in public school districts. Charter applicants would have to describe the steps they would take to avoid increasing racial or socioeconomic isolation in the public schools from which students would potentially be drawn to attend the charter.

While charter school advocates aren’t against efforts to desegregate schools, Rees said the community impact analysis adds an unnecessary step to the process. Often charter school authorizers, the organizations that govern charter schools, require school applicants to complete something similar to the proposed impact analysis, she said.

“The key issue here is [federal officials are] acting as if these conversations are not taking place and that somehow people were opening charter schools by not taking these things into account,” Rees said.

The proposed rules acknowledge that charter authorizers already require incoming schools to present data on academic achievement, demographics, and enrollment and retention rates of students in surrounding public schools. The community impact analysis, and the desegregation requirement within it, are meant to build upon that.

“The administration from day one has been focused on promoting racial and socioeconomic diversity,” Cardichon said.

Using excessive enrollment in existing schools as a measure of demand

One of the proposed requirements within the community impact analysis would have the applicants demonstrate sufficient demand for a charter school by indicating overenrollment in public schools. The proposal raised alarm among many in the charter community, who argue that overenrollment in public schools should not be a requirement for a charter school.

The Education Department has since clarified that overenrollment is one of a number of factors that could demonstrate need. Applicants can include other factors that show a need for the school, such as evidence of demand for specialized instructional approaches.

“Traditional public schools do the same thing before they build a new school, getting a sense of will they have sufficient students to maintain a certain level of enrollment,” Cardichon said. “The idea that we’re doing something different, we think is a misconception.”

Proposed partnerships with public schools

When the proposed rules were first released, many in the charter community were also concerned about a section that indicated charter schools would have to partner with a public school district in order to receive the funding.

The proposed rules state that applicants “must propose to collaborate with at least one traditional public school or traditional school district in an activity that would be beneficial to all partners in the collaboration and lead to increased educational opportunities and improved student outcomes.”

The idea is that charter schools and traditional public schools can benefit from a partnership with each other, sharing information on best practices and systems of support for their communities. But charter school supporters worried the rules meant that they would have to get sign-off from a public school district in order to open.

The department has since clarified that it has not yet decided whether the partnerships will be a requirement. The public comments, which the department collected through April 13, will help inform that decision.

The fight against for-profit connections

Throughout his presidential campaign and into his administration, President Joe Biden has admonished charter schools that operate under for-profit companies.

The new rules take those statements further by requiring applicants to prove they are not under the control of a for-profit company. Under the proposal, applicants would have to divulge if they have planned or already entered into a contract with a for-profit education management organization.

Schools that plan to contract with for-profit organizations have to describe all the details of that contract, including the amount of federal funds that would be used to pay for services under the contract, information on the governing board members of the organization, and any conflicts of interest.

“One of the first [policy objectives] that this president has spoken clearly about is around ensuring federal dollars do not go to for-profit charter schools,” Cardichon said.

While she acknowledges that for-profit companies cause can problems in the charter school space, Rees doesn’t believe the regulations will ultimately help bring in more well-meaning nonprofit schools. Schools that contract with for-profit entities are less likely to need the funding provided by the program, she said.

The rules “ultimately are going to hurt the very people you’re trying to help,” Rees said.

Who wants to see these new rules?

For proponents of traditional public schools who are critical of the charter sector, the proposed rules would represent a welcome change.

Much of what is included mirrors what is required of traditional public schools when they are gathering funding to open, said Carol Burris, director of the Network for Public Education, a group dedicated to promoting traditional public schools. The network has published multiple reports on charter school closures and corruption.

“[The proposed rules] will go a long way to addressing the problem that we identified in our reports, which was the problem of schools that either never opened … or schools that opened, never really get the enrollment, and wind up closing,” Burris said. “It’s hard for me to understand why there is so much resistance to that concept.”

What’s next

Cardichon could not say when the department will release the finalized rules for the program. The department is in the process of reviewing the thousands of online public comments and developing the final policies.

When the rules are finalized, Cardichon said the department will be committed to helping incoming charter schools understand the application process through webinars and meetings with applicants.

“Our goal is to fully run this program and get all of those dollars out and make sure that we have sufficient high-quality applicants,” she said.

A version of this article appeared in the June 15, 2022 edition of Education Week as What’s Behind the Fight Over the Biden Administration’s Stance on Charter School Funding

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