After a tumultuous reception, the Biden administration’s regulations for the federal Charter Schools Program (CSP) were finalized in July. Although the administration backpedaled partway on issues related to community demand and racial integration, its final rules cracked down on so-called “for-profit charters,” in line with the president’s campaign promises. Soon, we’ll learn whether any charters that contract with for-profit management companies received CSP start-up grants, and/or whether states that allow for-profit charters were penalized as a result.
Technically, “for-profit” charter schools are non-profit organizations that contract out some or all of their operations or services to a for-profit firm—meaning the schools themselves are not for-profit.
If that explanation strikes you as technocratic, you’re not alone. Most people fail to make a distinction between whether a school is providing a service directly via its own regular staff or is obtaining it via another entity. One result of that failure to read the fine print is that charter critics and enemies run into few challenges when they erroneously refer to “for-profit schools.”
Such disdain certainly oozes through the dense requirements that CSP applicants must henceforth meet if they choose to work with for-profit management organizations. For starters, they must ensure that goods and services purchased from such an organization are of fair market value, that the school’s governing board is making key programmatic decisions, that members of said board are not selected by the management organization, that the management contract is severable, and on and on.
We’re all for reasonable safeguards to guard against rotten apples in the charter barrel. But note the crucial missing link: The federal regs appear oblivious to whether the functions performed by a for-profit organization have anything to do with school quality. Heavy on inputs, they ignore how for-profit management companies might serve to benefit (or harm) charter students academically. They also fail to make some vital distinctions within the variegated world of schools that work with outside providers.
Fordham’s latest study, For-Profit Charter Schools: An Evaluation of Their Spending and Outcomes, sheds much light on these key points. Using recent data from Ohio, Professor Stéphane Lavertu and Assistant Professor Long Tran of The Ohio State University dig into what is meant by “for-profit” charter schools, how they spend resources differently from other charters, and how they compare in effectiveness to other charters (and to traditional public schools) in academic and nonacademic outcomes.
They find that charter schools can be sorted into three categories: those that mostly manage their own operations (23 percent), those that outsource goods/services to non-profit organizations (26 percent), and those that outsource goods/services to for-profit organizations (51 percent). The latter typically send more of their operating funds to their (for-profit) management organizations than do charter schools with non-profit management organizations.
Further, the roughly half of (Ohio) charter schools that outsource to for-profit management organizations can be further subdivided into those that contract for personnel services (three-fourths) and those that choose to hire their own staff (one-fourth). Because staffing is the largest item in any school budget, the first group sends the bulk of its operating funds to their management organizations. Yet they also spend more in the classroom and less on administration than their counterparts that work with non-profit organizations—even as they also drive heightened rates of chronic absenteeism among the charter sector.
Finally, the study largely replicates what Dr. Lavertu found in an earlier analysis of Ohio charter schools: So-called for-profit and non-profit charter schools both outperform traditional public schools, although non-profits also outperform for-profit charters, particularly in mathematics.
Based on these results, we recommend that policymakers not treat “for-profit charters” as a monolith. Specifically, charters that contract with for-profit organizations for staffing generally perform worse, and those that contract for fewer services perform better, so we should avoid regulating charter schools based on the tax status of their management organizations—and instead focus on their results.
After all, some of those results are quite good—including results of schools with management companies that run core academic functions—and such firms bring much needed capital to the sector. Policymakers should focus on schools’ academic progress with students. On their results, not on our ideology.
That means they should strive for targeted regulations, not inputs-based laundry lists or poor attempts to quantify the involvement of management organizations according to how much of a school’s budget they manage.
We’d argue that these are the wrong types of criteria by which to disqualify participation in a federal program, much less to gauge a successful school. Instead of fretting about the cost of the contract, how much it comprises of the school’s overall funding, and the duration of involvement (among numerous other things), how about taking into consideration the management organization’s track record of success with the service(s) that it provides?
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Applicants to the federal Charter Schools Program were barely given a month to complete their applications after the final regulations were issued. It’s hard to grasp how any school leaders could finish such a daunting task in so little time. But, like it or not, charter schools are used to having to prove themselves. Grants are to be announced within days. We’ll be looking to see which state entities, developers, and charter management organizations make the cut—and whether any high-quality for-profit schools are in the mix. Stay tuned!
Since the end of World War II, the world’s population has not only gotten vastly bigger; it has also become vastly more educated. In nearly every country, the total number of years that citizens have attended school has grown faster than the population itself, and the number of college degrees conferred has grown even faster. Although population growth is now slowing almost everywhere (and depopulation is an emerging reality for some countries), the overall pace of educational expansion will remain much faster than natural population growth as far into the future as a demographer’s eye can see.
Education is a crucial component of human capital and, by extension, of national might. A better-educated citizenry means a more productive economy and thus greater military potential. But because the educational explosion of the last seventy years has been uneven—some countries have made greater strides than others, and the pace of progress has varied over time—this dramatic transformation hasn’t just increased the overall size of the global economy. It has also shifted the distribution of economic potential among countries, including great powers.
Comparatively speaking, Western nations, including the United States, have been the biggest losers in this great reshuffling of educational and economic heft, as we detail in a recent report for the American Enterprise Institute. During the Cold War, the United States was the uncontested education superpower; Americans enjoyed the world’s highest levels of educational attainment and, thanks to that and our large population, accounted for far more of the world’s highly educated workforce than any other country. But that epoch is now history. An increasing number of countries are overtaking the United States in educational attainment, when measured by mean years of schooling, and it will soon cede to China its first-place ranking in the raw number of college-educated workers. Sometime in the next two decades, India may also surpass the United States in total numbers of working-age men and women with higher education. Of course, quality of education matters—and the quality of U.S. higher education far exceeds China’s and India’s today, and likely for decades to come. But it is self-deluding happy talk to insist there is no geostrategic significance to America’s steadily declining share of the world’s college graduates.
The long-term educational rise and ultimate ascendance of China and India in higher education head counts should not come as a surprise. Nor should the United States’s long-term relative decline. Indeed, the only way that the United States might have maintained its early postwar educational edge into the twenty-first century would have been as a consequence of catastrophe: global failure to develop, worldwide mortality setbacks, or both.
What should surprise—and dismay—American observers is the remarkably poor educational performance that hastened the United States’s relative deterioration. Growth in the mean years of schooling for Americans in their late twenties is barely a third of what it was in the early postwar era, and growth in the cohort of working-age college graduates has sharply slowed when compared with the early postwar period. Amazingly, college graduation rates for American men in their late twenties flatlined from the mid 1970s to the early years of the twenty-first century—an alarming peacetime performance somehow overlooked by academics and policymakers alike.
This broad educational slowdown has not occurred because Americans are so overeducated that they have hit an attainment ceiling. To the contrary, a growing roster of East Asian and European societies have surpassed the United States in either mean years of schooling or rates of postsecondary training for workers aged twenty-five to thirty-four. Australia, Ireland, South Korea, and Switzerland, among others, have done so, but their small population size has prevented them from challenging the absolute educational dominance of the big five—China, India, Japan, Russia, and the United States. In other words, the U.S. can do better. And although it may not be able to prevent China and India from surpassing its highly educated workforce, it can postpone the date at which this happens—possibly by decades.
The erosion of the United States’s educational edge will eventually weaken the country’s global reach. With a less educated workforce than it could or should have, the United States will have less economic, political, and military heft with which to defend its interests and uphold the economic and security architecture that has defined the postwar order. Eventually, Pax Americana will come under pressure. It is not hard to imagine a progressively less peaceable and more economically insecure international environment in which the United States has much less influence as a result of its stagnating pool of high-skilled labor.
Fortunately, the United States still has good options for coping with loss of educational hegemony. But they all require Washington to take initiative—something it seems unaccustomed to lately. Through more active and imaginative diplomacy, the United States could seek to forge new coalitions or alliances that would add human resource ballast to the liberal order. This might entail patient cultivation of new security partnerships with some of tomorrow’s major centers of highly educated labor: India, Indonesia, Vietnam—maybe even Iran. Other intriguing possibilities include a closer integration of Canada, Mexico, and the United States, which might bring North America’s strategic potential more in line with its tremendous demographic and economic potential.
Meanwhile, the United States could attempt to reverse its ominous educational slowdown. Stagnation in educational attainment is impeding economic growth and likely robbing the United States of trillions of dollars in output each year—a price that will only rise if the United States doesn’t shift course. Part of the problem is that Americans do not want to buy a lot of what U.S. educators want to sell, and it is hard to blame them. The quality of public primary and secondary schooling is woefully uneven, and a high school diploma does not always come with marketable skills. Higher education is increasingly bureaucratized, ideological, and expensive. If Americans treated education as if their future depended on it, they would look for far-reaching overhauls, not marginal changes, and they would look beyond teachers unions and university administrators for better ideas. Revitalizing the country’s human resources—not just educational attainment, but health, workforce participation, and even family—will increasingly be strategic imperatives for the United States.
The coming demographic and educational changes are predictable. But they are not entirely inevitable, and they are unfolding slowly. The United States has time to adapt and address its educational shortcomings before it is too late. To avoid squandering its educational edge and putting its position of global primacy at risk, however, Washington must acknowledge that education is no longer just a domestic policy issue, but a national security issue on which the very future of the United States depends.
Editor’s note: This essay was adapted from a longer essay in Foreign Affairs.
Weeks away from the midterms, education apparatchiks in the nation’s most populous state are ramping up the election mischief by playing politics with what are expected to be dismal results from assessments taken by students last spring. Earlier this month, as reported in EdSource, the California Department of Education (CDE) announced its intent to delay release of test score data from the 2021–22 school year until after November 8. Following media pressure, this week the agency walked back that decision. The original plan would have allowed Governor Gavin Newsom and other elected officials—notably including State Superintendent of Public Instruction Tony Thurmond, who is up for re-election and had the ultimate say on the delay—to duck scrutiny for their role in exacerbating pandemic-related setbacks. CDE’s reversal means that will no longer be the case.
California school districts have already had access to their own test results for over a month, but CDE’s initial refusal to release statewide numbers—a thinly-veiled part of Thurmond’s re-election strategy—and then its melting under the public spotlight, were just the latest in a long line of head-shaking moves. While EdSource should be commended for keeping CDE semi-honest, this wouldn’t be the first time California has engaged in testing tomfoolery. In the spring of 2021, only 24 percent of eligible students took the state exams, after a confusing back-and-forth with the feds that resulted in the assessments being made optional. Regardless of whether nefarious intent was involved this time around, the mixed messages created another round of terrible optics for an agency that has become known forterribleoptics.
CDE had attributed its original delay plan to the state board of education and its decision to combine the release of test scores with other metrics (e.g., student attendance, suspension rates, chronic absenteeism) in the California School Dashboard. By releasing all of the performance information simultaneously, the public, according to CDE, would have been less likely to be “misled” by the data. This was risible. There’s no reason why the state cannot publish the test scores separately and as part of the dashboard data, which is what CDE eventually announced it would do—as it has consistently done in the past. Combining everything into the fog machine that is the dashboard would in reality have provided less transparency to the public. This wasn’t a policy argument aimed at illuminating student performance; it was a political argument intended to obscure it.
The political games played with standardized testing in California have been compounded by the federal government, which has spent the last couple of years talking out of both sides of its mouth on ESSA’s assessment and accountability requirements. Even as the Biden administration says states must follow the law, it continues to signal its reluctance to enforce it. That’s the message conveyed in a “Dear Colleague” letter released earlier this month by U.S. Secretary of Education Miguel Cardona. His letter underscores the need to avoid using assessment results “punitively” to chastise teachers on evaluations or to prevent students from graduating or being promoted to the next grade. CDE’s mandarins clearly got the message, taking it a step further to include politicians as another group worthy of being held harmless. The state might have gotten away with it, too, if it hadn’t been for some tenacious and intrepid reporting.
The impulse to obfuscate or gainsay the adverse effects of school closures—California was last in the nation with regard to providing in-person instruction—is spreading to other states. Michigan, for instance, tried to put a positive spin on their subpar results. On the other side of the country, little data can be found so far on how students in New York have fared. Like California, the Empire State has shown a lack of regard for annual testing. Both states have chalked up delays in part to lengthy and complicated quality control processes, but the bureaucratic foot-dragging—months after these exams were administered and with students already assigned to new teachers in new classrooms—evinces an unseriousness among state leaders when it comes to helping students get back on track.
The bad behavior on testing is one of several examples of how some state leaders buckled under the pressure of the events of the past two years, particularly in prioritizing the agendas of adults over those of students. This is all the more relevant heading into an election where voters say education is a top issue. Reforms should include reworking data and reporting systems so that they don’t end up mirroring California’s accountability smokescreen, and timing the release of test scores and state report cards far ahead of election campaigns.
On an encouraging note, there’s a safeguard against this sort of nonsense. Findings from the NAEP long-term trend assessment have already provided an alarming indication of how students were affected by poor decisions made during the pandemic. A state-by-state accounting of academic performance is coming at the end of next month (i.e., before the election, for which the National Assessment Governing Board deserves much credit) in the form of “main NAEP.” Unlike the state assessment results gradually rolling out this fall, NAEP provides state-to-state comparisons and will be an especially important check on state testing data—regardless of the Golden State’s measurement histrionics.
Looking past the shenanigans, a huge question continues to center on the long-term prospects for educational equity and excellence in an era when support for state assessments is waning among key constituencies. There has been an enormous amount of table pounding about standardized tests. Love them or hate them, even the most ardent skeptics of testing have inadvertently used this data to support their arguments. It’s one thing to rebuke California’s elected leaders for their ham-fisted failure to hide the ball on testing to avoid embarrassment, but what sort of funny business will they come up with when there’s no longer any ball to hide?
Do today’s conservatives have an education-reform agenda worth paying attention to? Anything coherent? Anything beyond school choice and lots of it? Anything other than “fie on CRT and let’s not say gay, at least not in grade school.”
Two efforts to answer those questions have popped up on my screen and desk in the past ten days. Neither quite does the job.
The first is only marginally constructive. It’s House Minority Leader Kevin McCarthy’s new “Commitment to America” manifesto, carefully timed to land before the mid-term elections, meant to outline a roadmap that a post-election GOP majority in the House would follow, and spanning a swath of policy assertions under four familiar headings—safety, freedom, prosperity, and government accountability.
The “future built on freedom” heading incorporates education, as well as health and “big tech,” but as many commentators havenoted, it’s mighty thin on specifics. Its “plan to put student futures first” rests on four pillars: “Advance the Parents’ Bill of Rights; Recover lost learning from school closures; Expand parental choice so more than a million more students can receive the education their parents know is best; [and] Defend fairness by ensuring that only women can compete in women’s sports.” But only the first of those has any detail at all, namely five broad categories in which parents should have “rights.” All are reasonable as far as they go, but they’re mighty nebulous. What, exactly, is safeguarding “parents’ right to be heard?”
In sum, there’s nothing I find objectionable in the education portion of the manifesto, but nothing concrete, either, certainly nothing actionable. It boils down to a set of convictions.
Full stop.
Now let’s go to what might be called the opposite problem, the far-more-constructive 156-page volume newly published by my friends at the American Enterprise Institute titled Sketching a New Conservative Education Agenda.
Here the problem—if that’s what it is—is the efflorescence of ideas, sometimes nebulous, often concrete, covering a staggering array of issues and topics—and periodically colliding with each other. These take the form of forty shortish (two to three pages each) proposals from individual (and pairs of) members of AEI’s loose-knit “conservative education reform network.”
The volume most definitely demonstrates, as editors Max Eden and Hayley Sanon write in their conclusion, that conservatives suffer from no shortage of ideas when it comes to education—in this case mainly K–12, but with college issues (such as free speech) also represented. I’ve got a piece in there myself (about civics), as do Mike Petrilli and several others with current orpreviousFordham connections.
It’s a grand buffet, actually, including both familiar ideas (easing teacher certification) and a host of novel ones, a few of them (e.g., “public-private microschooling” and “hybrid homeschooling”) arising from the ashes of Covid-induced school shutdowns.
The buffet table is loosely organized into three sections, dubbed “educational innovations,” “civic and philanthropic leadership,” and “policy ideas,” and so long as you’re not looking for a prix fixe meal with a chef-determined menu, you can graze happily here, filling your plate with interesting ideas, some almost mainstream, others downright exotic.
The collection as a whole indeed attests (as Rick Hess writes in its introduction) to “AEI’s fierce commitment to the competition of ideas,” and it most definitely displays the creativity and fertility of the right half of the ed-wonk world.
Sometime, however, we would surely benefit from an updated and coherent ed-reform platform that conservatives might gather on. It can’t be as ephemeral as what Kevin McCarthy produced the other day. But neither, in the end, can it be forty separate ideas, however fine many of them are.
For years, millions of U.S. students have taken the NWEA MAP Growth assessment. Data from these computer-adaptive assessments—which cover math, reading, language usage, and science—can help teachers determine which students need remediation or other supports and in which topic areas. This has been particularly important in the wake of Covid education disruptions beginning in spring 2020, which sent achievement levels plummeting; the need for supports to remediate that epic learning losscontinues today. A new analysis, conducted by the organizations involved in its implementation, looks at an ambitious effort to boost MAP achievement.
Starting in 2018, NWEA teamed up with online education provider Khan Academy to develop a tool to help increase student achievement on MAP Growth’s mathematics assessments. Called MAP Accelerator, it uses previous achievement data to create supplemental content customized for each student. It is geared toward helping students build skills up to mastery level using a combination of video instruction and intensive practice lessons with detailed performance feedback, gradually moving students on to higher and harder content.
MAP Accelerator was rolled out to NWEA-participating schools in fall 2020, coincidentally just when evidence of Covid-related learning loss was beginning to surface. Ninety-nine districts participated. Analysts reviewed data from more than 181,000 students in grades three through eight who utilized the tool in 2020–21. There was a roughly even split between males and females; 34 percent were White, 12 percent were Black, 5 percent were Asian, and a noteworthy 35 percent were Hispanic. The authors make clear that this is not a nationally-representative sample and wasn’t intended to be, as the MAP Accelerator is marketed as a support for traditionally-underserved students. Fifty-two percent of students in the study sample attended schools where the majority of students are eligible for free or reduced-price lunch.
The analysts use a quasi-experimental, pre-test post-test design. Random assignment was not possible, so analysts instead broke students into four groups: no usage, less than fifteen minutes of usage per week, fifteen to thirty minutes of usage per week, and more than thirty minutes of usage per week. They utilize “judicious” statistical controls to help mitigate confounding variables and look at outcomes of other non-math MAP Growth assessments to attempt to identify and control for selection bias.
Only 5 percent of students used MAP Accelerator at the recommended dosage of thirty or more minutes per week. Most students (45 percent) fell into the less than fifteen minutes per week category. A whopping 41 percent did not use the tool at all. Students in the highest-usage group spent, on average, about three twenty-minute sessions per week over twenty-four weeks. While all groups showed growth in test scores from fall 2020 to spring 2021 (based on whatever their pandemic-impacted starting point was), the highest-usage group registered growth that was 0.26 standard deviations higher on average than similar students who used the platform for less than fifteen minutes per week. This general trend was consistently observed regardless of student race and ethnicity, gender, and school eligibility for free or reduced-price lunch.
While there was little evidence of self-selection bias, some evidence of other confounding variables was detected. Adjusting for these pointed to a large and statistically significant boost in math achievement based directly on the amount of accelerator usage (e.g., practice on geometry led directly to an increase in achievement on the geometry assessment). Impacts were significantly lower for students hailing from districts with greater than 20 percent English language learners. The analysts note that findings for poverty level and English learner status were at the school level rather than at the student level, rendering them less accurate.
We must be careful not to read more into these data than is here. First and foremost, this is not a randomized control trial. But equally important, would even the non-causal outcomes observed have looked the same in a normal school year? All of the students involved had been impacted by the pivot to remote learning in spring 2020, and most had seen their math achievement plummet as a result. We have no data on which students in this study had returned to in-person learning by the fall or spring, nor which students had access to broadband internet and connected devices.
All we can safely conclude is that concentrated practice with the MAP Accelerator appeared to increase achievement on MAP math assessments beyond what would have been expected without their use. But this is good enough news for now. Heaven knows we’re very clear about the problem; we need more data on possible solutions, and this one looks very promising so far.
Adding work requirements to federal aid programs helped cut child poverty by 59 percent since 1993. —American Enterprise Institute
Cheverus High Schools becomes the first religious school to participate in Maine’s tuition assistance program after the Supreme Court’s decision in Carson v. Makin earlier this year. —Washington Post
Louisiana State Superintendent of Education Cade Brumley proposes that summer school be mandatory for all K–4 students who are not yet reading at grade level. —NOLA.com
The universal expansion of the Arizona Empowerment Scholarship Account program makes the state a nationwide leader in school choice, but opponents threaten to roll back recent victories. —Christian Science Monitor
A college tuition assistance program in Kalamazoo, Michigan, is one of many social interventions that show positive effects for girls but not for boys. —National Affairs
Refugees from Ukraine are enrolling in Polish schools, where “schools and citizens are stretching resources to help them adjust.” —Wall Street Journal
A new study suggests that students taught by Black and White graduates of historically Black colleges and universities achieve higher scores in math. —The Hechinger Report
“K-12 issues and candidates shaping the midterms.” —Education Week
Since 2015, College Credit Plus (CCP) has offered academically eligible Ohio students in grades 7–12 the opportunity to earn postsecondary credit by taking college courses for free before graduating from high school. State law mandates the participation of all public schools and public colleges and universities, but dozens of private schools and private higher education institutions across the state also participate.
CCP is a state-run, state-funded program that is jointly managed by the Ohio Department of Education (ODE) and the Ohio Department of Higher Education (ODHE). As such, it is subject to audit by the Ohio Auditor of State, and a performance audit was conducted in 2021. The recently published audit is worth a read in its entirety, as it offers an in-depth look at the program and proposes ten recommendations to improve participation and performance. But for those interested in a bird’s-eye view, here’s a look at the good, the bad, and the ugly.
The good: Overall participation, student impacts, and tuition savings are positive
CCP was established to address low student participation in Ohio’s original dual-enrollment program, the Postsecondary Enrollment Options Program (PSEOP), and so far, it’s done exactly that. The number of students participating in CCP, as well as the number of credits that have been attempted and earned, has grown every academic year with the exception of 2020–21, during the pandemic. Even then, over 76,000 students participated and earned roughly 650,000 credit hours. Compared to the final year of PSEOP (2014–15), when students earned approximately 190,000 credit hours, that’s an increase of roughly 240 percent. The majority of CCP participants (91 percent) were in high school, and nearly 70 percent of all courses were taken through a community college. Ohio now has one of the highest rates of dual enrollment in the country, and approximately 35 percent of graduating seniors leave high school with some college credit thanks to CCP.
CCP is still relatively new, which makes measuring long-term student impacts difficult. Nevertheless, the audit found some positive trends. As of 2021, nearly 8,000 associate degrees and certificates had been awarded to CCP students while they were still in high school. CCP participants earn on average approximately fourteen college credits (which is equivalent to one semester of college), and most earn at least six. Students who participate in CCP are more likely to enroll in higher education after high school—approximately 68 to 78 percent did so, compared to only 53 percent of non-participants in 2016 and 2017—and college dropout rates among CCP participants were significantly lower than those of non-participants in the classes of 2016 and 2017. There is, of course, some “selection bias” in these comparisons, as students have to meet academic readiness benchmarks before they can participate in CCP, but these are still positive signs of the program’s impact.
And then there’s the money. According to the most recent annual report, Ohio students and families have saved more than $833 million in tuition costs since CCP was established, with nearly $160 million saved during the 2020–21 school year alone. The average participant (who, don’t forget, earns approximately fourteen credit hours) saves roughly $4,400 in tuition, fee, and textbook costs.
One persistent criticism of CCP is that highlighting all this savings is misleading; critics have pointed out that if participants end up spending four years at college anyway, taking the same number of courses as non-participants, they don’t actually save any money in the long run. But the audit refutes that assumption. After reviewing the total number of credits students had earned at the time of graduation or program completion, the audit team found that CCP students who earned associate and bachelor’s degrees in 2021 graduated with roughly the same number of credit hours as their peers who did not participate in CCP, despite entering college with already-earned credits. This means the program actually does save students money, as it allows them to take (and pay for) fewer courses while pursuing a degree. It’s also worth noting that money isn’t the only thing that’s saved; time is also a factor. Fewer required courses mean students have more flexibility to meet family obligations, work a part-time job, explore work-based learning opportunities like internships, or graduate early.
The bad: A lack of oversight could be impacting participation
One of the most troubling takeaways from the audit came via interviews with ODE and ODHE, which revealed that because “there is no formal compliance or oversight function for CCP” established in law, the agencies “are not required to, and have chosen not to, take the initiative necessary to follow through with compliance-related activities.” This lack of program-level oversight means that no one is actively working to ensure that participating schools are complying with program requirements—and as a result, a lot of schools aren’t.
The audit found that there are “significant levels of non-compliance with program requirements among school districts.” For example, although state law requires districts to initiate CCP communication starting in sixth grade, surveys conducted as part of the audit revealed that almost half of districts—43 percent—didn’t start communication until high school. Their failure to follow the law is likely impacting participation, as districts that reported beginning their communication efforts prior to high school had a 14 percent higher CCP hours per student value. The audit found similar non-compliance issues regarding digital information access. Districts are required by law to promote the program on their website, but approximately 37 percent reported that they didn’t. Those that did had an 8 percent higher CCP hours per student value.
It’s worrisome that districts’ failure to communicate could be preventing some kids from accessing CCP and its benefits. But it’s even more troubling that feedback from program participants suggests that some districts may be actively discouraging students from participating. Consider the following examples:
ODHE provides schools with standard templates for program applications and forms, but the audit discovered that it’s “common” for districts to edit these templates before using them. For example, the department’s annual notice form is intended to provide families with concise and accurate information about CCP. But the audit team found that approximately 80 percent of the documents they reviewed were different from the template, and more than half were missing at least one element.
State law allows students to enroll in CCP in one of two ways: They can use state funds to cover costs (which is the default), or they can opt to self-pay. Audit findings indicate that some districts “added guidance” regarding these options to their intent to participate forms, and that because they “did not clearly indicate” which option was the default, families might have assumed there was a substantial cost associated with the program. Multiple districts added information about how students would be charged if they failed a course—again creating the opportunity for misinterpretation—while others used “online dropdown setups” that provided a plethora of options rather than a simple yes or no regarding a student’s intent.
Interviews with colleges and universities indicate that it’s possible that some schools are actively encouraging Advanced Placement (AP) courses over CCP, perhaps because CCP courses are funded via a deduction to districts’ state aid and AP courses are not. Such a practice is particularly worrisome in districts where the number and variety of AP courses is much smaller than what would be available through CCP.
The upshot? In the absence of strong and consistent oversight by the agencies responsible for overseeing this program, students and families all over the state could be losing out on the potential benefits of dual enrollment.
The ugly: Traditionally underserved groups are missing out on CCP’s benefits
Dual-enrollment programs can play a crucial role in closing educational equity gaps, as they give students the opportunity to access higher-level coursework and earn college credit for free. Unfortunately, traditionally underserved students—especially low-income and minority students—participate in CCP at a lower rate than their peers. For example, although Black students made up 17 percent of the overall high school population during the 2020–21 school year, only 5.5 percent of high schoolers participating in CCP were Black; Hispanic students made up 6.7 percent of the high school population, but only accounted for 1.5 percent of CCP participants. Participation gaps for low-income students are even worse. In 2021, nearly half of Ohio students met the criteria for being considered economically disadvantaged, but those students made up only 17 percent of CCP participants.
The audit identifies several factors that could be contributing to these gaps:
Eligibility requirements. The Ohio Administrative Code contains rules regarding academic eligibility requirements students must meet to participate in CCP. These requirements were established to ensure that students are ready for the rigor of college work—an important check, as grades for CCP courses show up on a student’s high school and college transcript.
But having such requirements in place can also create participation gaps. State testing data indicate a significant achievement gap between low-income and minority students and their more affluent White peers, so it isn’t surprising that a program with achievement-based eligibility requirements would have participation gaps. But acknowledging why those gaps exist doesn’t make them acceptable. It’s still the responsibility of schools to close achievement gaps (an admittedly tall order), and education policy should be focused on creating opportunities for all students.
Fortunately, the state is attempting to thread this needle with “Innovative Programs,” which are designed to “exclusively address the needs of underrepresented student subgroups.” To participate, school districts and colleges or universities must apply to ODE and ODHE for an eligibility waiver. The audit identified a few examples of specific initiatives—most notably at Marion Technical College and the University of Cincinnati—but most of the colleges and universities interviewed stated that they have no initiatives specifically focused on increasing CCP participation for minority or economically disadvantaged students.
A lack of student support services. Services like transportation, meal programs, and counseling are offered to students free of charge by their secondary schools. But for the most part, these services are unavailable when students attend CCP courses on a college campus, and their absence can negatively impact participation. For example, if students don’t have reliable transportation, or if there isn’t a college campus within a reasonable traveling distance of their home or school, the number of college courses available may be much smaller. Students who have to choose between eating lunch for free at their high school or attending a CCP course on a college campus will likely (and rightfully) choose the free meal. And the limited number of school counselors in many districts—Ohio’s average student to counselor ratio is 409:1, which is much higher than the recommended ratio of 250:1—can often be a problem, as counselors are the primary coordinators of CCP in many districts.
The digital divide. It should come as no surprise that the pandemic impacted CCP delivery methods. During the 2020–21 school year, participation in online courses shot upward and accounted for nearly 41 percent of CCP enrollments, compared to only 22 percent in 2019–20. For students with affordable and easy access to internet and internet-enabled devices, the ability to enroll in online CCP courses was likely a blessing. But for students who don’t have access to reliable broadband service or devices, online courses weren’t an option. Even with in-person classes resuming, students who lack internet access or devices at home could still be missing out on opportunities that would fit better with their schedules or would make a broader array of courses available.
Unfortunately, as the section regarding a lack of state oversight indicates, these aren’t the only barriers faced by low-income and minority kids. These populations of students would benefit the most from CCP courses, and yet they seem to be the least likely to have access to the program. Addressing the obstacles outlined above (and ensuring that schools are adequately preparing students for college-level work) would likely go a long way.
***
Overall, there’s plenty to celebrate in this audit. That includes the audit itself, which shines a welcome light on plenty of aspects of CCP that either weren’t included in the state’s annual report or were mentioned only in passing. But there’s also a lot to be concerned about. The lack of oversight is troubling. State policymakers would be wise to use the upcoming budget to add provisions to state statute that require ODE and ODHE to hold schools accountable for following the law. As for the participation gaps for low-income and minority students, the state’s attempts to address the issue are a good start, but both state leaders and those at districts, colleges, and universities can and should do more—and the best place to start would be tackling achievement and readiness gaps starting as early as possible.
Aaron’s piece is bolstered by a raft of poor test score data included on school and district report cards, released earlier this month. Also included in those report cards: data on chronic absenteeism. Overall, the Dispatch reports, the numbers are high and highly problematic. When you get down to specifics of which students are impacted and where, the data get even worse. Lots of official voices weigh in here on the problem, its causes, and some possible solutions. Unfortunately, it does not seem that folks are singing from the same hymnal just yet. (Columbus Dispatch, 9/27/22)
After a tumultuous reception, the Biden administration’s regulations for the federal Charter Schools Program (CSP) were finalized in July. Although the Administration backpedaled partway on issues related to community demand and racial integration, its final rules cracked down on so-called “for-profit charters,” in line with the president’s campaign promises. Soon, we’ll learn whether any charters that contract with for-profit management companies received CSP start-up grants, and/or whether states that allow for-profit charters were penalized as a result.
Technically, “for-profit charter schools” are non-profit organizations that contract out some or all of their operations or services to a for-profit organization—meaning the schools themselves are not for-profit. It’s also very common for all public schools—both traditional and charter—to use for-profit vendors for a variety of services, from transportation and building maintenance to food service and student tutoring.
This study, conducted by Stéphane Lavertu and Long Tran, uses administrative data from Ohio to explore whether a charter school’s use of for-profit organizations impacts school quality. Specifically, it asks:
1. What makes a charter school “for-profit” vs. “nonprofit”?
2. How do for-profit and nonprofit charter schools spend resources differently?
3. How does the effectiveness of “for-profit” charters compare to the effectiveness of traditional public schools and “nonprofit” charters, in terms of academic and nonacademic outcomes?
To read the full report and its implications for educational leaders and policymakers, scroll down or download the PDF (which also includes the appendices).
Foreword
By Amber M. Northern and Michael J. Petrilli
After a tumultuous and mostly hostile reception, the Biden administration’s regulations for the federal Charter Schools Program (CSP)—which provides start-up and expansion grants—were finalized in July. Although the Administration backpedaled partway on issues related to community demand and racial integration, its final rules maintained its war against for-profit charters, in line with the president’s campaign promises.
We understand perfectly well that the phrase “for-profit charter schools” can conjure up images of stout old men in suits greedily raking in cash on the backs of poor families and students. We also recognize that a few charter operators are closer to that depiction than choice supporters might care to admit. Yet that image is based on a misnomer married to a misconception.
That’s because all U.S. charter schools (save for a handful in Arizona) are not only governed and regulated by public agencies, but also must operate as nonprofit organizations run by their own boards. Those boards may—and many do—choose to enter into contracts with for-profit or non-profit management organizations that provide specific services for one or more schools. They do this in the interests of quality, efficiency, and economy, much as traditional public schools obtain various administrative and academic supports from their central offices, even as many districts obtain services ranging from busing to textbooks to clinical psychology to cafeteria food from for-profit vendors. Strictly speaking, then, almost nowhere in America is there such a thing as a “for-profit charter school.” What there are are some non-profit schools that contract with for-profit management organizations for a range of goods and services.
If that explanation strikes you as technocratic, you’re not alone. Most people fail to make a distinction between whether a school is providing a service directly via its own regular staff or is obtaining it via another entity. One result of that failure to read the fine print is that charter critics and enemies run into few challenges when they erroneously refer to “for-profit schools.”
Such animosity certainly oozes through the dense requirements that CSP applicants must henceforth meet if they choose to work with for-profit management organizations. For starters, they must ensure that goods and services purchased from such an organization are of fair market value, that the school’s governing board is making key programmatic decisions, that members of said board are not selected by the management organization, that the management contract is severable, and on and on.
We’re all for reasonable safeguards to guard against rotten apples in the charter barrel. But note the crucial missing link: The federal regs appear oblivious to whether the functions performed by a for-profit organization have anything to do with school quality. Heavy on inputs, the final regs ignore how for-profit management companies might serve to benefit (or harm) charter students academically. They also fail to make some vital distinctions within the variegated world of schools that work with outside providers.
This study sheds much light on these key points. Using recent data from Ohio, Professor Stéphane Lavertu and Assistant Professor Long Tran of The Ohio State University dig into what is meant by “for-profit” charter schools, how they spend resources differently from other charters, and how they compare in effectiveness to other charters (and to traditional public schools) in academic and nonacademic outcomes.
The full report is well worth your time, but for the time-challenged, here’s the gist of what they found.
First, as explained above, Ohio has no “for-profit charters.” But the 208 charter schools included in the study can be split into three categories: those that mostly manage their own operations (47 schools, or 23 percent), those that outsource goods/services to non-profit organizations (55 or 26 percent), and those that outsource goods/services to for-profit organizations (106 or 51 percent). The lattermost typically send more of their operating funds to their (for-profit) management organizations than do charter schools with non-profit management organizations.
Further, the roughly half of charter schools that outsource to a for-profit management organization (n=106) can be further subdivided into those that contract for personnel services and those that choose to hire their own staff. Three-fourths (n=78) of the charter schools that work with external for-profit organizations contract for staff. And because staffing is the largest item in any school budget, those schools send the bulk of their operating funds to those organizations. The remaining one-fourth (n=28) hire their own staff and, consequently, send smaller checks to for-profit management organizations. This staffing distinction is important, as teachers and other staff are the heart of any school—and a charter school board that directly employs its own retains more control over the content and quality of its curricula, its pedagogy, and its personnel than one that outsources staffing.
Drs. Lavertu and Tran also find that charters that contract with for-profit entities for staffing spend more in the classroom and less on administration than their counterparts that work with non-profit organizations. That’s good. But they also drive heightened rates of chronic absenteeism among the charter sector. Not so good.
Finally, the study examines school effectiveness and largely replicates what Dr. Lavertu found in an earlier analysis of Ohio charter schools: So-called for-profit and non-profit charter schools both outperform traditional public schools, but non-profits also outperform for-profit charters, particularly in mathematics.
We draw four implications from these results.
First, readers who are automatically inclined to hate so-called for-profit charter schools should rethink their priors.
These schools tend to focus on instruction versus administration, as they spend more on classroom activities and offer more instructional hours, particularly in the middle grades. What’s more, they outperform district schools, particularly in English language arts. Meaning that if these schools went away, their students would be worse off on average if they ended up back in their district schools.
Second, as with all schools, we shouldn’t view for-profit charter schools as a monolith.
There are 106 charters in Ohio (about half of the study sample) that contract with for-profit management organizations. Seventy-eight of them turn over nearly everything, including personnel, to those organizations, while the remaining twenty-eight directly employ all or nearly all of their personnel, choosing instead to contract for specific (and less expensive) services. Since personnel is the biggest budget item in a school, charters that externally contract for it purchase services that, on average, comprise 91 percent of their total expenditures. Those charters that directly employ their own staff purchase services from their for-profit management companies that comprise on average 39 percent of their total expenditures.
That's a big difference.
It’s not a huge leap to assume that a school’s relative level of control is correlated to the portion of its budget that it outsources. Schools that outsource over 90 percent of their budgets have essentially surrendered control of key decisions, not only the hiring of their most important asset (teachers!), but largely what they teach and how, as well as decisions about learning loss, parental engagement, school discipline, the master schedule, and so on. Schools that purchase less than 40 percent of services effectively retain “majority control” over the running of the school. They continue to shape some of the fundamental educational goals and practices of the school, as well as its likelihood of succeeding academically.
Third, for-profit charter schools in Ohio that outsource nearly all services perform worse than those that outsource fewer.
It’s true that students in Ohio for-profit charter schools are more likely to be chronically absent than students in non-profit charter schools or traditional public schools. However, this result is driven entirelyby the for-profit charter schools that send nearly all of their operating funds to their for-profit management organizations, also known by detractors as “sweeps contracts.” Compared to charter schools that contract with non-profit management organizations, these contract-centric charter schools also have more students per teacher and more teacher turnover, which could manifest into weaker student-teacher relationships that depress attendance.
We can’t underscore enough the importance of differentiating among charter schools in the for-profit space. Case in point: Students enrolled in charters that hire their own staff—and are therefore less reliant on management organizations for instructional delivery—actually experience improvements in attendance rates and declines in rates of chronic absenteeism compared to their more contract-centric peers. Simply put, some so-called for-profits schools are better than others.
Fourth and finally, because of this variation, we should avoid regulating charter schools based on the tax status of their management organizations.
We understand that some people just don’t like the idea of “for-profit charters,” but the proof is in the pudding. Some of them are quite good—including those with management companies that run core academic functions—and they bring much needed capital to the sector. We need to focus on their academic progress with students, not the tax status of their primary vendor. On their results, not on our ideology.
That means that we should be for targeted regulations, not inputs-based laundry lists or poor attempts to quantify the involvement of management organizations. To wit, the final federal regs say in numerous places that the applicant must provide assurance that a management organization does not exert “full or substantive administrative control over the charter school.” They go on to say that the “use of the term ‘substantial’ is intended to put grantees and subgrantees on notice that in most cases, a management organization that exercises ‘substantial’ control over a charter school would be considered to be exercising an impermissible amount of control over the CSP project.”
Does this mean that charter schools that contract externally for staffing are on the outs, given that the bulk of their operational funding goes to their management organization for this purpose? Does outsourcing back-office support to organizations set up to handle it—as many administratively-lean community-based charters do—equate to “substantive administrative control”?
We’d argue that these are the wrong types of criteria by which to disqualify participation in a federal program, much less to gauge a successful school. Instead of fretting about the cost of the contract, how much it comprises of the school’s overall funding, and the duration of involvement (among numerous other things), how about taking into consideration the management organization’s track record of success with the service(s) that they are providing? No matter what they are contracted to help the school with, will it be completed successfully and efficiently? Outcomes, not the myriad details dancing around them, is what we should most care about.
*************
Applicants to the federal Charter Schools Program were barely given a month to complete their applications after the final regulations were issued. It’s hard to grasp how any school leaders could finish such a daunting task in so little time. But, like it or not, charter schools are used to having to prove themselves. Grants are to be announced within days. We’ll be looking to see which state entities, developers, and charter management organizations make the cut—and whether any high-quality for-profit schools are in the mix. Stay tuned!
Introduction
Biden administration officials at the U.S. Department of Education proposed in March 2022 to make it more difficult for charter schools to open or expand, as well as to deny federal funding to so-called “for-profit charter schools.”[1] In July, the administration’s final rules and regulations relative to the Charter Schools Program (CSP) grants largely followed through on these intentions, making it hard for for-profit charter schools to access federal start-up funds. House Democrats are also working to incorporate the rules into appropriations bill language, meaning that both the executive branch and Congress are targeting these schools. And multiple states have already banned (e.g., California) or considered banning (e.g., Ohio) for-profit entities from the charter sector.
But what do we mean exactly by a “for-profit” school? After all, every U.S. charter school (save for a few in Arizona[2]) is a nonprofit entity, in that the school—which holds the charter approved by the authorizer—must be a nonprofit organization recognized by the Internal Revenue Service. That means that the school must put any profit (i.e., net income) it generates back into the organization to further its public mission, as opposed to enriching owners as in for-profit businesses. Moreover, the authorizing organizations that sponsor and oversee schools—the organizations that grant schools those charters—must be public agencies or nonprofit entities. So, by law, definition, and practice, charter schools are not “for-profits.”
Typically, when critics use the term “for-profit charter school,” they mean that a nonprofit charter school has contracted out its operations or services to a for-profit organization—not that the school itself is for-profit. What complicates matters is that it is common for all public schools—both traditional and charter—to contract with for-profit vendors for a variety of services, from transportation and building maintenance to food service and student tutoring. Vendors also supply basics such as desks, textbooks, and paper.
Should the definition of a for-profit charter school include any school that contracts for goods or services from a for-profit entity? Should distinctions be made between the types of services—managerial, instructional, or other operations—or based on the extent of goods and services provided? For instance, if the latest rules are read as cutting off federal start-up dollars to “for-profit” schools, will they inadvertently eliminate funding to some nonprofit, community-based schools, too, just because they outsource “too many” services to for-profit organizations?
The latest regulations seek to make some of these distinctions. For instance, they
“. . . require applicants to provide assurances that they will not relinquish full or substantial administrative control of their CSP grants or subgrants to a for-profit management organization and that any management contract with a for-profit management organization will contain specific provisions to mitigate the risks associated with such contracts.”
What comprises “full or substantial administrative control” may be open to interpretation, but other new requirements are not. For example, applicants are required “to conduct a needs analysis and to submit detailed information on their management contracts with for-profit entities, including nonprofit charter management organizations (CMOs) operated by or on behalf of for-profit entities.” They must also “provide assurance that they will post on their websites information regarding any management contract between the charter school and a for-profit management organization.”
What these new regulations ignore is how the particular functions that a for-profit organization performs correspond to school quality. Would restrictions on purchasing services from for-profit vendors limit or enhance high-quality public school options? Those opposed to charter schools contracting with for-profit organizations claim that, because state per-pupil funding formulas put a ceiling on revenues per pupil, a profit motive could lead for-profit charter school operators to minimize spending and, consequently, lower educational quality.
On the other hand, charter schools—which in many major cities receive, on average, 33 percent less funding per student than traditional schools—can increase per-pupil revenue by enrolling more students and realizing economies of scale, which still requires meeting the expectations of parents, authorizers, and state officials to remain open.
To date, we know very little about whether a charter school’s use of for-profit organizations affects its quality. To better understand these differences among charter schools and how these differences affect students, this report uses administrative data from Ohio to answer the following research questions:
1. What makes a charter school “for-profit” vs. “nonprofit”?
2. How do for-profit and nonprofit charter schools spend resources differently?
3. How does the effectiveness of “for-profit” charters compare to the effectiveness of traditional public schools and “nonprofit” charters in terms of standardized test scores, end-of-course exam scores, and attendance and disciplinary outcomes?
We are not able to determine how much “profit” is made by a for-profit organization hired to render services for a charter school. We have access to school-level expenditure data that schools and districts report annually, as well as charter schools’ financial forecasts. But we do not have access to the budgets or earnings reports of the for-profit organizations that are contracted to help schools. Still, the present study is by far the most systematic analysis of for-profit vs. nonprofit-operated schools that has been conducted to date.
Ohio context
Ohio is an ideal state to explore these questions. Not only is it one of only a handful of states with a sufficiently large number of charter schools that use for-profit organizations,[3] but it is also the only state in the country that makes charter school contracts with vendors publicly available, including fine-grained financial data[4] (though, as indicated above, the CSP regulations may change that). It is also atypical in the wide variety of charter school authorizers it permits, including local school districts, other public agencies, and nonprofit entities (including the Thomas B. Fordham Foundation).
Ohio is typical, however, in that its brick-and-mortar charter schools on average provide considerable educational benefits to disadvantaged student populations. It seems reasonable to assume that the results documenting the advantages and disadvantages of for-profit charter schools (relative to both nonprofit charters and traditional public schools) could apply in other contexts.
Figure 1 provides an overview of Ohio charter school governance and operations. As indicated, all Ohio charter schools are deemed both public schools—governed and regulated by public agencies—and nonprofit organizations run by their own boards. Charter schools’ governing boards may also choose to enter into a contract with for-profit or nonprofit management organizations (“operators”) that provide specific services for one or more schools (a.k.a. a charter school “network”)—much like the administrative supports and academic leadership provided to traditional schools via district central offices (see the last boxes in Figure 1). Technically, then, there is no such thing as a “for-profit charter school” in Ohio or in virtually any other state[5]—just for-profit management organizations.
Still, for the sake of consistent nomenclature, we adopt the same (albeit confusing) shorthand. We identify charter schools as “for-profit” if they contract with a management organization that the State of Ohio has identified as a for-profit corporation. “Nonprofit” charter schools, on the other hand, are those that contract with nonprofit organizations for management services or those independent community-based schools that manage their own operations.
Figure 1. State government and nonprofit organizations can oversee charter schools in Ohio, but for-profit organizations may help in running day-to-day school operations.
Background
Although politically controversial, for-profit organizations in the charter school sector have received little attention from scholars. Researchers sometimes distinguish networks of charter schools that are managed by for-profit education management organizations (EMOs) from those managed by nonprofit CMOs, but only a handful of studies have explored the educational impact, enrollment patterns, or distinctive administrative practices of the for-profit organizations operating in the charter school sector.
A few analysts have examined the impact of for-profit charter schools on academics. A recent Fordham Institute report on Ohio’s brick-and-mortar charter schools (with the same lead author as the current study) found that charter schools operated by for-profit and nonprofit management organizations both had greater student achievement gains than traditional public schools operating in the same geographic school districts.[6] CREDO’s study of CMOs included a brief comparison of the educational impact of charter schools that contracted with for-profit as opposed to nonprofit organizations to manage school operations. It found that, on average, charter schools operated by nonprofits realized greater student achievement gains in 2014–15 than those operated by for-profit organizations, although the analysis did not distinguish between brick-and-mortar and online “virtual” schools, which precludes apples-to-apples comparisons.[7] Harvard’s Susan Dynarski and colleagues examined the for-profit National Heritage Academies network and found that its students had substantially greater achievement gains in mathematics than they would have had had they attended traditional public schools, although they found no statistically significant effects in reading achievement, attendance, or disciplinary incidents.[8]
There is also evidence that for-profit charters might yield administrative innovations that improve student outcomes. Like a couple of other studies, a 2017 study of charter school operators in Florida found that charter schools overall had achievement gains comparable to traditional public schools and that those operated by for-profit EMOs had achievement gains comparable to those operated by nonprofit CMOs.[9] Importantly, though, the study revealed significant efficiency advantages for networked for-profit schools. Although these schools exhibited only modestly greater student achievement gains than nonprofit-operated schools, they spent significantly less to realize those outcomes.
Research on the delivery of public services in other sectors provides mixed results regarding the relative effectiveness of for-profit and nonprofit organizations, though a recent review of research in higher education reveals that for-profit schools had, on average, a negative impact on student outcomes.[10]
Data and Methods
The analysis compares the administrative practices (e.g., staffing and budgeting) and educational effectiveness (e.g., gains in achievement and attendance rates) of various types of charter schools in operation during the 2018–19 school year (hereafter 2019)[11]—the last prepandemic year for which student-level outcome data are available. We analyze schools serving elementary and secondary grades separately because their administration often differs in key ways.[12] We focus on differences in average outcomes between sectors: nonprofit charter, for-profit charter, and traditional public schools.[13]
Table 1. Ohio charter school counts by type (2019)
Full Sample
Non-profit– Community-based
Non-profit– Mgmt. org.
For-profit–Mgmt. org.
Brick-and-mortar charter schools
General education
210
47
55
108
Special education
30
6
22
2
Dropout prevention and recovery
60
20
7
33
Virtual charter schools
General education
5
1
0
4
Dropout prevention and recovery
9
4
5
0
Total charter school count
314
48
89
147
Note. The table presents counts of charter schools by type. It includes only those schools that operated for the entire 2018–19 school year and for which we have financial forecast data. All for-profit dropout prevention and recovery schools are stand-alone high schools (grades 9–12). Two schools without a management organization (according to ODE records) are categorized as “nonprofit management organization” because nearly all expenses were allocated to purchased services from an outside nonprofit organization.
We use Ohio’s publicly available school-level financial data and teacher-level staff data. We obtained every charter school’s financial forecast from May 2019,[14] as well as school-level expenditure data that schools and districts report annually.[15] The forecast data allow us to characterize the extent to which charters utilize the organizations from which they purchase services (both for-profit and nonprofit), whereas the school-level expenditure data enable comparisons of inputs in charter schools and traditional public schools using a consistent coding scheme. We use a number of other publicly available datasets to obtain information on school personnel and other characteristics.[16]
We also obtained from the Ohio Department of Education student-level data that provide school of attendance for each grade and year, demographic and academic characteristics (race, economic disadvantage, gender, disability status, and English-learner status), scale scores on mathematics and English language arts (ELA) exams in grades 3–8, scale scores on high school exams (Algebra, Geometry, ELA I, ELA II, and ACT/SAT), counts of reported disciplinary incidents for which the schools expelled or suspended a student, the number of instructional hours for which a student was present, and whether a student received a high school diploma. We normalize state test data for grades 3–8 such that student scores capture their distance in standard deviation units from the statewide mean in a given subject, grade, and year. We normalize high school tests by subject and year only, as students may take these tests in different grades.[17]
Statistical approach
We compare the administrative inputs and educational impacts of schools operating in the same geographic school district. Comparing nearby schools helps to take into account regional differences relative to how much it costs to educate children and variation in students’ demographic characteristics.[18] As described in Appendix A, we use models that account for such fixed differences between districts.
Comparing students who attend school in the same geographic district goes a long way toward making sure that we are comparing the educational outcomes of students who are identical except for the type of school they attend. Still, to address the issue that students who select into one school type may nonetheless differ from those who select into another school type, we follow the well-established practice of comparing student-level changes in educational outcomes between students who are nearly identical in observable characteristics but who attended different types of schools. As explained in Appendix A, we include statistical controls for students’ baseline test scores, attendance rates, rates of disciplinary reports, and various other observable characteristics (e.g., economic disadvantage).[19]
Finally, to provide the most credible assessment possible of Ohio charter schools, we focus primarily on brick-and-mortar (“site-based”) charter schools serving “general” student populations according to the Ohio Department of Education.[20]
Differences in how for-profit and nonprofit charter schools allocate resources
Summary of Results
This section examines how charter schools contract for services and spend revenues. We find that for-profit charter schools send more of their operating funds to their management organizations than do their nonprofit counterparts. Moreover, contractual data show that there are actually two types of for-profit charter schools, distinguished by whether they contract for personnel services or, instead, hire their own staff. For-profit charter schools also spend more in the classroom and less on administration than their nonprofit counterparts.
Finding 1: For-profit charter schools typically send more of their operating funds to their management organizations than do nonprofit charter schools with management organizations.
Figure 2 shows the percentage of services purchased via contract by charter school type. The average for-profit charter school spends 77 percent of its operating funds on purchased services, whereas the average charter school with a nonprofit organization managing its operations spends 55 percent of its funds on purchased services. The average community-based nonprofit charter school—which, by our definition, manages its own operations—spends 27 percent of its operating funds on purchased services, with none of these schools spending more than 50 percent.
Figure 2. For-profit charter schools spend more of their operating funds on purchased services than other charter schools.
Finding 2: Contractual data reveal two types of for-profit charter schools—those that contract for personnel services and those that hire their own staff.
A school’s key expense is instructional personnel (i.e., teacher salaries), and the data show a notable distinction in how for-profit charter schools handle these costs.[21] Figure 3 shows that two-thirds of for-profit charter schools purchase personnel services from their for-profit management organization (those schools are represented by the striped rose bars in panel C). Consequently, these schools send nearly all of their operating funds to their management organizations. The remaining one-third of for-profit charter schools hire their own staff and, consequently, send much less to their for-profit management organization.[22] This stands in contrast to nonprofit charter schools. Sixty-six for-profit charters send more than 80 percent of services from contractors, but only sixteen nonprofit schools (per striped blue bars in panel B) do likewise.
The striking distinction between schools that hire their own staff and those that contract for staff likely has some real-world consequences. Once a school relinquishes control of their most important asset—teachers—they are effectively handing over to their nonprofit or for-profit management organization the power to shape some of the fundamental educational goals and practices of their school, as well as the likelihood of succeeding academically. Schools in which teacher contracts are held by the management organization are also operating as part of a network, suggesting more standardization of teacher practices. On the other hand, a charter school that continues to hire its own staff retains more control over its educational programming even if it has outsourced multiple other services to a management organization.
Figure 3. Since personnel expenses are the bulk of a school’s budget, charters that contract for personnel have the highest levels of purchased services.
Table 2 describes the extent to which for-profit organizations are involved in educational delivery for different types of charter schools. Recall that a school may be for-profit or not based on the for-profit status of its management organization. For-profit schools are separated into those that have their own instructional staff (“for-profit – own staff”) and those that contract with their management organization for personnel services (“for-profit – contract staff”). As shown, the latter send nearly all of their budget (91 percent on average) to their management organizations, whereas the former send only 39 percent on average. Thus, the extent of involvement of for-profit firms (low, moderate, or high) is based on whether they do not contract with a for-profit management organization (low), contract with a for-profit management organization but hire their own teachers (moderate), or contract with a for-profit company for virtually everything (high).
Table 2. Charter schools vary significantly in terms of how involved their for-profit management organizations are in the delivery of educational and other services
School Types
Definition
School Count
Purchased services as percent of expenditures
(Avg/Median)
Extent to which for-profit firm involved
Nonprofit – Community-Based
Charter schools that manage their own operations.
47
27% / 27%
Low
Nonprofit – Mgmt. Org.
Charter schools that contract with a nonprofit organization to manage operations. These may be organizations that serve a single school or CMOs that serve a network of schools.
55
55 % / 38%
Low
For-profit –Mgmt. Org.
Charter schools that contract with a for-profit organization to manage operations. These may be organizations that serve a single school or EMOs that serve a network of schools.
106
77% / 94%
Moderate/High
For-profit – Own Staff
For-profit charter schools that directly employ all (or nearly all) of their personnel.
28
39% / 40%
Moderate
For-profit – Contract Staff
For-profit charter schools that contract for all (or nearly all) of their personnel.
78
91% / 96%
High
Note. Statistics are limited to brick-and-mortar charter schools serving general student populations. School counts do not exactly match those from Table 1 due to missing data on purchased services for two for-profit schools.
Finding 3: For-profit charter schools that contract with management organizations for staffing spend more in the classroom and less on administration than their nonprofit counterparts.
Table 3 shows that for-profit charter schools overall spend the same amount per pupil as nonprofit schools.[23] However, for-profit charter schools spend $581 more per pupil on classroom personnel and activities and, correspondingly, $699 less on administration. On the other hand, they have more first-year teachers (43 versus 35 percent, on average), three more students per teacher (19 versus 16, on average), and five more schools in their networks (17 versus 12, on average) than nonprofit charter schools. These latter three differences, however, are driven by the schools that send nearly all their funds to their for-profit management organizations to handle staffing and other tasks. Additionally, students in these particular charter schools experience forty-six more instructional hours annually, on average, than students in nonprofit charter schools.
Moreover, for-profit charters in general spend nearly every penny—keeping an average of just 5 percent of their operating expenditures as cash on hand to help them cope with revenue volatility (see Table A2 in Appendix A). These results paint a picture consistent with the notion that for-profit organizations seek to maximize economies of scale.[24]
Table 3. For-profit charter schools spend more in the classroom and less on administration than nonprofit charter schools that contract with nonprofit management organizations, but there are significant differences between for-profit charters that do and do not purchase personnel services from their management organization.
Characteristic
Non-profit – Mgmt. Org. Average
(N=47)
For-Profit Difference
All For-Profits
(N=107)
For-Profit – Own Staff
(N=28)
For-Profit – Contract Staff
(N=79)
Schools in operator network
12 schools
+5*
-1
+6*
Percent of teachers in their first year
35 percent
+8*
0
+9*
Student-teacher ratio
16 students/instructor
+3*
+2*
+3*
Percent of teachers with a master’s degree
22 percent
+4
0
+4*
Classroom expenditures per student
$5,588
+581*
528
594
School age (years)
10 years
+1*
+4*
1
Annual instructional hours per student (actual)
1,004 hours
+29*
-43*
+46*
Average teacher experience (years)
5 years
+1*
+1*
0
Teacher annual pay (dollars)
$37,802
-814
-4,093*
-14
Total expenditures per student
$10,682
-79
-340
-17
Percent of expenditures on salary/benefits
55 percent
-5*
-1
-6.5*
Administrative expenditures per student (dollars)
$2,816
-699*
-1,627*
-476
Note. The table compares 2019 characteristics of charter schools serving grades 4–8 that contract with for-profit organizations compared to nearby charters in the same district that contract with nonprofit organizations. Estimates are weighted by student enrollment. Estimates starred and in bold indicate a statistically significant difference between for-profit charter schools and the nonprofit charter schools used as a baseline (p < 0.10 using a two-tailed test and clustering errors at the school level). For-profit schools are separated into those that have their own instructional staff (“for-profit – own staff”) and those that contract with their management organization for personnel services (“for-profit – contract staff”).
Comparing the results of for-profit and nonprofit charter schools
Summary of Results
In this section, we compare for-profit and nonprofit charter schools in the same district while controlling for school composition (i.e., the average baseline test scores and demographic characteristics of their students).[25] We find that nonprofit charter schools exhibit slightly higher achievement gains than their for-profit counterparts and that chronic absenteeism is especially high in the latter—particularly those that contract with their management organizations for staffing. [26]
Finding 4: Nonprofit charter schools exhibit slightly higher achievement gains than for-profit charter schools.
Figure 4 compares the impact on academic achievement of for-profit and nonprofit charter schools operating in the same geographic district, holding constant their student makeup. Figure 4 shows that annual achievement growth is slightly (0.02 standard deviations) lower among students in for-profit charter schools compared to similar students in nearby nonprofit charter schools with similar student bodies.[27] This lower growth (which is still greater than that of nearby traditional public schools) is driven by lower math achievement, particularly in for-profit schools that hire their own staff. Overall, there is no statistically significant difference in the average achievement impact of the for-profit schools that use external hiring and the nonprofit charter schools operating in the same district (though this average masks less progress in math in for-profit charters).
Figure 4. Students in for-profit charter schools experience somewhat lower achievement growth relative to same-district nonprofit charter schools.
Finding 5: The heightened rates of chronic absenteeism among for-profit charter schools are driven by those that send nearly all their funds to their management organizations for staffing costs.
Results in Figure 5 show that for-profit charter schools that contract with their management organization for staff are driving the negative attendance results in the for-profit sector. Students attending these schools experience worse attendance rates and are more likely to be chronically absent than similar students attending nonprofit charter schools[28] (students at these schools are also somewhat less likely to be reported for disciplinary action). In other words, the adverse effects on student attendance rates overall in the for-profit sector are driven entirely by the for-profit charter schools that contract externally for staffing services. In fact, students in for-profit charters that hire their own staff—and are therefore less reliant on their management organizations for instructional delivery—experience improvements in attendance rates and declines in rates of chronic absenteeism.
Figure 5. The for-profit charter schools that send most of their funds to their management organizations for staffing drive the inferior attendance outcomes.
How do for-profit charters compare to traditional public schools?
A 2020 Fordham Institute report (authored by one of this report’s authors) compared the performance of Ohio charter schools to the state’s traditional public schools.[29] That report found that both nonprofit and for-profit charter schools outperformed nearby traditional public schools (see Appendix A for additional evidence that replicated this finding). Moreover, within the charter sector, nonprofits outperformed for-profits.
Analyzing charter high schools, the results here follow those of the previous report, finding generally strong performance, although those for for-profit charter high schools are more mixed. Students in nonprofit charter high schools (particularly those attending schools with nonprofit management organizations) have greater achievement growth than traditional public-school students (Figure S1). Specifically, in grades 9–11, students in nonprofit charter schools experience achievement gains that are 0.06–0.08 standard deviations greater (as measured by the ACT, which includes both math and ELA content) than similar students attending traditional public schools (across the board, though, the charter school advantage is more pronounced in ELA). Students attending for-profit charter high schools, however, experience lower achievement growth in mathematics (0.08 standard deviations lower) than similar students in nearby traditional public schools.[30]
Figure S1. High school students in nonprofit charter schools experience greater achievement than similar students attending traditional public schools.
In contrast to the strong performance of charters on academic assessments, Figure S2 shows that nonprofit charter schools offer no statistically significant advantages in terms of the probability of ever receiving an Ohio diploma and that students attending for-profit charter high schools are six percentage points less likely to do so (a 7 percent decline from the average graduation rate of 87.5 percent in our sample). However, the figure reveals that students who attend nonprofit charter schools are significantly more likely to persist to grade 11 and just as likely (if not more) to sit for the ACT than students in traditional public schools. These results are consistent with the positive attendance estimates in other grades (see Appendix A) and confirm that the positive charter school effects on the ACT exam are not due to charter schools getting rid of low-achieving students low-achieving students.
Figure S2. Students in for-profit charter high schools are less likely to receive an Ohio diploma compared to students in nonprofit charters or traditional public schools, but comparable students in all schools are just as likely to take the ACT or SAT in eleventh grade.
Also worth mentioning: the strong performance of charter schools in Ohio may be a result of those schools providing more instructional hours (Figure S3).
Figure S3. Charter schools’ superior achievement growth in grades 4–8 corresponds to a significantly greater number of instructional hours.
Implications
The analysis suggests three takeaways.
First, banning, restricting, or limiting funding for charter schools that contract with for-profit management organizations could adversely impact the disadvantaged students that such schools primarily serve.There are clear educational benefits of for-profit charter schools. Their average impact on student achievement is substantively and statistically greater than that of traditional public schools in the same geographic school district. These results hold even if we limit the analysis to for-profit charter schools that send nearly all their operating funds to their for-profit management organization. But we also don’t know what other schools students would attend—or how effective they would be—if federal funding were denied to charter schools that use for-profit management organizations.[31]
Although not definitive, our analysis suggests some distinct advantages for charter schools managed by for-profit organizations. These schools tend to focus more on instruction versus administration, as they spend more on classroom activities and students experience more instructional hours. This pattern corresponds to economies of scale, as for-profit schools spend less on personnel, have higher student-teacher ratios, and have larger networks of schools than nonprofit schools, on average. The for-profit delivery-model—which appears to be less staff dependent—is more effective than the traditional public school system at educating low-achieving students when it comes to ELA and math content on standardized exams but perhaps less effective at promoting attendance and educational attainment.
Second, virtual charters and charter schools that contract out almost all of their services to a for-profit organization may deserve extra scrutiny. This analysis reveals that students in for-profit charter schools are more likely to be chronically absent than students in nonprofit charter schools or traditional public schools. This result is driven entirely by for-profit charter schools that send nearly all of their operating funds to their for-profit management organizations, which also have larger operator networks, more students per teacher, and more teacher turnover than nonprofit charter schools that contract with nonprofit operators.
In Appendix B, we also document the significant academic struggles of students in virtual schools—a finding that has been well documented in the literature. All virtual schools are, by definition, charter schools in Ohio, and they are also far more likely to be managed by for-profit organizations.
Third, states should continue to expand high-quality charter schools, given their strong track record. Ohio’s charter schools, on average, cost less and outperform nearby traditional public schools with respect to student achievement, attendance, and disciplinary incidents.Although there’s a perception that Ohio charter schools perform poorly compared to charter schools in other states,[32] evidence is mounting that Ohio’s charters are good choices for many families.[33] As this study and our previous study on the topic have shown, students attending brick-and-mortar charter schools experience substantial improvements in math and reading achievement, increases in attendance rates, and declines in rates of chronic absenteeism and reported disciplinary incidents. Results show that the positive average impact of charter school attendance (relative to traditional public schools in the same geographic district) is not due to a few high-performing charter schools but the fact that charters are generally delivering above average results.