The Lucrative Side of Charter Schools

For the past decade researchers at the National Education Policy Center which is based at CU Boulder, have tracked the growth of the private sector in the operation of charter schools. NEPC researcher Gary Miron says now there is a massive growth in the number of private businesses operating so called public schools “today we see about 45% of the nations public charter school students are enrolled in privately operated schools.”  Miron is one of the researchers in a new report commissioned by the National Education Policy Center called The Business of Charter Schooling: Understanding the Policies that Charter Operators Use for Financial Benefit.

Gary Miron says that the private companies running the public charter schools are often gaming the system, particularly in the area of real estate. The report explains how charter operators working through third-party corporations can use taxpayer dollars to purchase buildings and land.  “So in this environment we saw these for profit and non profit companies telling their boards that these are the lease agreements and the leases were often to subsidiaries or to purchase buildings that belonged to the company. It certainly wasn’t in the charter schools best interest to be beholden to these companies but it certainly isn’t in their interest either to pay two or three times above market rates for these facilities. ”

The report identifies four major policy concerns:

1. A substantial share of public expenditure intended for the delivery of direct educational services to children is being extracted inadvertently or intentionally for personal or business financial gain, creating substantial inefficiencies
2. Public assets are being unnecessarily transferred to private hands, at public expense, risking the future provision of “public” education
3. Charter school operators are growing highly endogenous, self-serving private entities built on funds derived from lucrative management fees and rent extraction which further compromise the future provision of “public” education
4. Current disclosure requirements make it unlikely that any related legal violations, ethical concerns, or merely bad policies and practices are not realized until clever investigative reporting, whistleblowers or litigation brings them to light.

Podcast: Play in new window | Download