Biden administration pushes new restrictions on charter-school access to federal grants

A computer screen shows the long title of new proposed charter-school grant rules. Links to petition for rules.

On March 10, the U.S. Senate overwhelmingly passed a spending bill that includes a proposal for stricter requirements for federal grants used for charter-school expansion.

One such change would affect the for-profit management companies that often run charter schools. By law, charter schools seeking federal grants must be run by nonprofits. Still, a common practice with charters is outsourcing such operations to nonprofits, which are eligible for funds. The new rules would significantly limit what services charters can contract with for-profit entities and still qualify for grants.

In Texas, state law does not require a local public hearing of how a new charter school will impact a given neighborhood’s public schools before it’s opened for enrollment—although districts can submit projected impacts to TEA about their budgets. To make matters worse, taxpayers aren’t notified about how additional local taxes will be spent in “recapture” funding due to charter school saturation. The new federal rules would require charters seeking grants to provide a detailed analysis of how creating a new campus would affect surrounding public schools—including an assessment showing there is “sufficient demand” for the new campus, such as data on overenrolled schools. It’s unclear how much these impact analyses will have on approving or denying grant applications.

Charter schools have a long track record of administrative misconduct, taxpayer money wasted, and big business foundations fueling their expansion efforts. In its report on millions of federal dollars wasted on now-defunct charter schools, the Network for Public Education found that several hundred million dollars were wasted—including millions of dollars for Texas charter schools. For example,  in 2014, Prime Prep Academy in Dallas faced multiple lawsuits and investigations relating to conflicts of interest, violations of the National School Lunch Program, and failures to carry out employee criminal background checks. This charter—like many others—received a grant from the Texas Education Agency to the tune of $600,000 that came from federal start-up funds. 

State Board of Education Member Ruban Cortez has long questioned the enrollment and project goals of new charter applications. Keeping these factors in mind, the 2018 approval of three new charter schools would deal  $42 million in losses to local public schools over five years, with the figure jumping to $164 million in a ten years if a charter enrolls at full capacity.  

Texas AFT welcomes the stricter rules changes that at least will buffer the ongoing waste of taxpayer dollars to fund privatization efforts in education. However, note that the amount allocated for charter grants remained the same as the previous spending levels at $440 million. The proposed rules are open for public comment through April 13. 

Texas AFT strongly encourages the administration to continue promoting pro-public education policy and demand further accountability from charter schools. The charter-school lobby will be working hard to try and kill these changes. You can add your voice supporting the proposals by signing a Network for Public Education petition.