Education for Profit: The Darker Side of Charter Schools

Charter schools offer students a chance at a better education, but they risk being exploited by for-profit companies.

While my last post on charter schools was overwhelmingly positive, it ended on the note that charter schools cannot be a panacea for educational issues because quality public education needs to be made available for all students. However, after spending a week in Detroit in March working on the issue of charter schools, I realize that my previous post reflected the charter school experience of the Northeast rather than the country as a whole. In the Northeast, charter schools are supported as innovative laboratories for educational development and reform. But other areas of the country are skeptical of charter schools, and for good reason. In Michigan, that skepticism stems from the fact that about 65 percent of charter schools in the state are run by for-profit educational management organizations (EMOs). Without proper oversight and accountability, this runs the risk of turning a system that’s meant to make a quality education available to everyone into a purely profit-driven enterprise that lacks concern for the well-being of students.

EMOs have developed over time as a result of the charter school movement. While charter school supporters often envision them as non-profits run by a single Board of Directors with an innovative idea for student achievement and curriculum, the reality is that running a charter school is hard work and often requires more dedicated support and management expertise. Successful non-profit charter schools have developed into non-profit EMOs that use similar methodologies in all of their schools – KIPP is an example. However, EMOs have also sprouted up in the for-profit sector.

How does it work? A non-profit group decides to form a charter school, submits its charter to the state, and gets approved. In Michigan, all charter school Boards of Directors are required to be registered as non-profits. Once the school receives its charter authorization from the state, the school then hires out educational services to for-profit or non-profit EMOs. EMOs can provide anything from occasional reading tutors, to administrative staff, to the full-time teaching staff and organization of a charter school.

What’s the problem? A charter school hiring a for-profit EMO is entirely legal under the laws of most states. In fact, for-profit EMOs have become prolific in Arizona, Florida, and Michigan, in particular. By contrast, in my home state of Massachusetts, there are only two charters schools run by a for-profit EMO. The issue arises when the line blurs between the non-profit charter school organization and the for-profit EMO. There is a good reason that public schools are run by state and local governments rather than for-profit businesses. As a society, we expect government programs to be tailored to serve the needs of citizens and create common standards for the betterment of all. If we blur the line between private businesses and public schools, we may wind up diverting public funds to support a company’s bottom line rather than our shared educational goals and values.

So what can be done? Charter schools have achieved most of their educational successes from the autonomy they’re given from the state and district educational bureaucracy. However, in order to ensure that public money isn’t supporting a for-profit company while the quality of education at charter schools decreases, greater accountability measures need to be put in place. Michigan’s updated charter school law, which went into effect on March 28, eliminates the cap on charter schools while adding accountability measures for the schools and the EMOs they contract with. One completely new section deals with the management agreements charter schools enter into with their EMOs, requiring annual reporting, public disclosure, and ensuring no conflicts of interest between the charter school’s non-profit board of directors and the for-profit EMO. Still, these accountability measures have yet to be implemented and tested. In order to ensure the best education for students at charter schools, all charter schools – both those who contract out to for-profit EMOs and those that do not – need to be held accountable for student achievement and closed if they are not performing well.

Charter schools are not a panacea to the achievement gap or issues in education. For-profit EMOs running charter schools add an additional complication, because public educational funding is going to support both an additional school choice option for students in failing schools and the bottom line of for-profit companies. Therefore, states must develop and enforce strong accountability measures for charter schools in order to ensure that public funds for education are being used appropriately and that students are receiving a quality education.

Amy Baral is a Roosevelt Institute | Pipeline Fellow performing legal and policy research on the Boston Public Schools, focusing on access to quality education and school choice. She is also a 1st year law student at Boston University School of Law.

 

Classroom image via Shutterstock.com.