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Biden administration proposes tougher rules for charter school grants

Charlotte Herman, 13, at Monte del Sol Charter School in Santa Fe, N.M. (Cedar Attanasio/AP)
4 min

Charter schools looking for federal start-up grants would face stricter requirements under new rules proposed by the Biden administration.

As a presidential candidate, Joe Biden proposed eliminating federal funding to support for-profit charter schools, and the proposed new rules go a long way to fulfilling that vow.

At the same time, the spending bill that cleared Congress this month keeps overall funding for the charter school program level at $440 million, as Biden requested in his budget. Grants are typically about $500,000 per school, and they have benefited about half of the existing charter schools.

The result is a middle position of sorts, reflecting Biden’s ambivalence on the subject. Biden, like many centrist Democrats, was once a supporter of charter schools, but he shifted his rhetoric on the matter as they fell from favor with the party’s liberal wing. Teacher unions, which hold significant sway in the party, are among the movement’s fiercest critics.

Charter schools are publicly funded but privately run enterprises. They were meant to serve as laboratories of innovation as well as provide alternatives for families unhappy with their local public schools. They were once seen as a popular middle ground in the school-choice debate. But Democrats have soured on them, and Republicans have focused their efforts on private school choice, such as taxpayer-funded vouchers and scholarships for children to attend parochial and private schools.

The National Alliance for Public Charter Schools was unhappy with several provisions of the proposal. “It’s unclear why the department and the administration are trying to limit charter school opportunities,” said spokeswoman Jennifer Diaz.

Democrats abandon charter schools as ‘reform’ agenda falls from favor

The biggest proposed change would affect the for-profit management companies that often run charter schools. To qualify for grants, charter schools must, by law, be run by nonprofit groups. Many, however, outsource the operation to for-profit companies, and those arrangements have been eligible for the federal start-up money.

That would change. Nonprofits could outsource particular tasks — such as payroll, for instance — to for-profit companies. But arrangements in which for-profit companies run the entire operation under contracts known as “sweeps” would be ineligible for the start-up grants. The proposal specifically bars arrangements under which a for-profit management company “exercises full or substantial administrative control over the charter school … or over programmatic decisions.”

Michael Petrilli, president of the conservative Thomas B. Fordham Institute and a supporter of charter schools, said some new limits on for-profit arrangements are welcome. He decried, for instance, situations where the nonprofit board cannot fire the management company because the entire school would collapse. But he said the rules could wind up so sweeping as to pull in more arm’s-length arrangements that work well.

“It looks like an aggressive attempt to keep schools managed by for-profit companies from receiving these funds,” he said.

Carol Burris, a longtime charter school critic who is executive director of the Network for Public Education, welcomed the change as overdue but predicted limited impact.

“The for-profit operators who are creating these schools don’t need this money to open up schools. They’ll continue to open schools. They just won’t get (federal) grants to do it.”

About 10 percent of approximately 7,500 charter schools are fully managed by for-profit companies, according to the National Alliance for Public Charter Schools. It was not clear how many of them use these “sweeps” contracts.

The proposed requirements also would toughen rules for nonprofit operators to qualify for the program.

Applicants must submit a community impact analysis demonstrating there is “sufficient demand” for the new school and that the project would meet the needs of students and families in the community. They would also have to detail how the applicant would create racially and socioeconomically diverse student and staff populations, though if this is not possible given the community demographics, applications could still be funded.

To show “unmet demand,” applicants are asked to cite data about any over-enrolled existing public schools.

That will be difficult for many applicants, Petrilli predicted, because enrollments are dropping all over the country.

“The language in here about the community impact and this notion we shouldn’t start charter schools in areas with steady or declining enrollment is a brutal attack on charters. It would stop the charter movement in its tracks,” he said.

Burris noted that the proposal does not say it will refuse to fund charters in areas with falling enrollment, just that it will be considered.

“And doesn’t that make sense from the standpoint of the taxpayer?” she asked. “Wouldn’t you rather see a charter school in an area where it’s needed? For the first time, the department is requiring the applicant to talk about the impact the new charter school will have on the community.”

The notice of proposed requirements and selection criteria for the Charter Schools Program grants was published last week. The proposal is open for public comment until April 14.