On Thursday, July 25, dozens of bankers, hedge fund types and private equity investors gathered in New York to hear about the latest and greatest opportunities to collect a cut of your property taxes. Of course, the promotional material for the Capital Roundtable’s conference on “private equity investing in for-profit education companies” didn’t put it in such crass terms, but that’s what’s going on.
Charter schools are booming. “There are now more than 6,000 in the United States, up from 2,500 a decade ago, educating a record 2.3 million children,” according to Reuters.
Charters have a limited admissions policy, and the applications can be as complex as those at private schools. But the parents don’t pay tuition; support comes directly from the school district in which the charter is located. They’re also lucrative, attracting players like the specialty real estate investment trust EPR Properties. Charter schools are in the firm’s $3 billion portfolio along with retail space and movie megaplexes.
Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9% of the state’s charter schools and are collecting 38% of the state’s charter school funding increase this year. The operators of both firms donate generously to elected Republicans.
The Arizona Republic found that charters “bought a variety of goods and services from the companies of board members or administrators, including textbooks, air conditioning repairs and transportation services.” Most charters were exempt from a requirement to seek competitive bids on contracts over $5,000.
In Florida, the for-profit school industry flooded legislative candidates with $1.8 million in donations last year. “Most of the money,” reports The Miami Herald, “went to Republicans, whose support of charter schools, vouchers, online education and private colleges has put public education dollars in private-sector pockets.”
Among the big donors: the private equity firm Apollo Group, the outfit behind the for-profit University of Phoenix, which has experimented with online high schools. Apollo dropped $95,000 on Florida candidates and committees.
Lest you get the idea charter schools are a “Republican” thing, they’re also favored by big-city Democrats. This summer, 23 public schools closed for good in Philadelphia — about 10% of the total — to be replaced by charters. Charters have a history in Washington, D.C., going back to 1996.
And they were favored by Arne Duncan when he ran Chicago Public Schools. Today, he’s the U.S. secretary of education. In 2009, Duncan rolled out the Obama administration’s “Race to the Top” initiative, doling out $4.4 billion in federal money to the states — but only to those states that lifted their caps on the number of charter schools.
Too bad the kids in charter schools don’t learn any better than those in plain-vanilla public schools. Stanford University crunched test data from 26 states. About a quarter of charters delivered better reading scores, but more than half produced no improvement, and 19% had worse results. In math, 29% of the charters delivered better math scores, while 40% showed no difference, and 31% fared worse.
Unimpressive, especially when you consider charter schools can pick and choose their students — weeding out autistic kids, for example, or those whose first language isn’t English. Charter schools in the District of Columbia are expelling students for discipline problems at 28 times the rate of the district’s traditional public schools — where those “problem kids” are destined to return.
Nor does the evidence show that charters spend taxpayers’ money more efficiently. Researchers from Michigan State and the University of Utah studied charters in Michigan, finding they spent $774 more per student on administration, and $1,140 less on instruction.
About the only thing charters do well is limit the influence of teachers’ unions. And fatten their investors’ portfolios. More…