The Biden administration recently disappointed both supporters and critics of charter schools by proposing to neither cut nor raise federal funding in fiscal 2022 for a program to expand and build new charter schools.

Charters — which are publicly funded but privately operated — enjoyed bipartisan support for years, but a growing number of Democrats have pulled back from the movement, citing the fiscal impact on school districts, lack of transparency about operations and repeated scandals in the sector. While running for president, Joe Biden promised to ban for-profit charter schools and support efforts to bring more accountability to charters.

The Biden administration proposed spending $440 million on the Charter Schools Program, the same as in fiscal 2021. Charter supporters had hoped for at least $500 million — while critics wanted to see a big drop in funding. Biden chose to give neither a victory in this regard.

The Federal Charter School Program has invested almost $4 billion in charter schools since it began giving grants in 1995.

The Network for Public Education, a nonprofit advocacy group that opposes charter schools and the privatization of public education, has published several reports in recent years on waste and fraud by schools that received program grants.

Here is a new piece from the executive director of that group investigating this question: Is the federal charter schools program financing white-flight academies? She is Carol Burris, a former prizewinning principal in New York who has long chronicled school reform, charter schools and the privatization movement on this blog. NPE communications director Darcie Cimarusti assisted with the research.

By Carol Burris

North Carolina’s private Hobgood Academy opened its doors in September of 1970. For decades, the overwhelmingly White private school, located near a public school whose students are overwhelmingly Black (90 percent), served as a haven for White families willing to pay tuition rather than send their children to an integrated public school.

However, the privilege of segregation came with a cost — $5,000 a year in tuition that parents decided taxpayers should assume. As North Carolina teacher Justin Parmenter explains here, the academy’s parents created a Google site called “Let’s Charter Hobgood” to band together and convert the private academy to a charter school. In what looks like an attempt to allay any fears that the charter might be forced to integrate, the following was posted: “No current law forces any diversity whether it be by age, sex, race, creed.” After three attempts, parents pulled it off, and Hobgood Academy became a charter school.

How North Carolina’s charter schools are used to resist integration is well documented, as more predominantly White charter schools pop up in integrated or majority-minority school districts. For example, a 2017 study — by researchers Helen F. Ladd, John B. Holbein and Charles T. Clotfelter of Duke University — found the state’s charter schools “increasingly serving the interests of relatively able White students in racially imbalanced schools” with the number of students in predominantly White charter schools nearly doubling as the number of minority students concentrated in charters that were more than 90 percent minority.

It is no surprise that one year after Hobgood’s conversion to a charter, this overwhelming White school’s demographics still looked nothing like the local public school. Yet the school was generously rewarded with a half-million-dollar U.S. Department of Education Charter Schools Program (CSP) grant.

Is the federal charter schools program financing white-flight academies?

In 2018, the federal Charter Schools Program awarded a grant of $26.6 million to North Carolina to support “high-quality schools focused on meeting the needs of educationally disadvantaged students.”

Thirty of the 42 charter schools that to date have received CSP grants via the North Carolina Department of Education have reported demographic information. Of those schools, more than one-third (11) have significant overrepresentation of White students or a significant underrepresentation of Black students compared with the population of the public school district in which they are located.

In addition to Hobgood, here are four examples of other schools that got the money:

The Community Public Charter is located on the grounds of its landlord, the Community Pentecostal Center. The school was started by the Rev. Eddie McGinnis, who serves as senior pastor. Disregarding the country’s constitutional separation of church and state, the website of the Pentecostal Center lists the charter school as one of its ministries, providing a link for students to enroll.

During 2019, the year in which the school was awarded its Charter School Program grant of $250,000, 95 percent of the school’s students were White, compared with its integrated public school district, Gaston, where only 53 percent of the students are White.

The Community School of Davidson, like Hobgood, was formerly a secular private school run in a Baptist church. Now a charter school, it received a $700,000 CSP grant to expand. The year it received its grant, 84 percent of its students were White compared with 27 percent of the students in its public school district, Charlotte-Mecklenburg.

White students comprise only 35 percent of the Forsyth County school district. A Charter School Program expansion grant awardee, the Arts Based School located in the district, has twice as large a percentage of White enrollees (71 percent). The charter school requires parents to send lunch, provide transportation and volunteer one hour a week for the school. Only 11.7 percent of the students are economically disadvantaged, compared with more than 62 percent of the district.

Socioeconomic segregation and North Carolina CSP awardees

The Arts Based School’s stratification points to another pattern: how many of the awardees dramatically underserve students who are poor. Of the 29 CSP awardees for which the percentage of economically disadvantaged students was reported on the North Carolina’s Department of Education report card website, 90 percent (26) had at least a 10-point gap between their economically disadvantaged students (students eligible for free or reduced-price lunch) and those of the district. In all but three (23), that gap exceeded 20 points. In fact, 45 percent of the awardees (13 of the 29) had gaps between the economically disadvantaged students served by the charter schools and their public school districts exceeding 40 points.

Only 5 percent of the students at Bradford Preparatory School and 11 percent of the students at Queen City STEM, both of which received a CSP expansion grant, are economically disadvantaged, compared with over 51 percent of the students attending Charlotte Mecklenburg Schools.

The Tillery Charter Academy in Montgomery County ($250,000 grant), in which Black/Latinx students are substantially underrepresented, has a 43 percent gap between its economically disadvantaged students and the school district’s. At the Community Public Charter, one of the highly segregated charter schools discussed in the section above, the gap exceeds 51 percent. In the former white-flight academy, Hobgood, the gap is more than 71 percent when compared to the poor Halifax County schools, where over 90 percent of the students are eligible for free or reduced-price lunch.

Students with disabilities

Included in the category of educationally disadvantaged students are students with disabilities. Twenty of the 28 awardee schools (71 percent) with 2020 data served a lower percentage of students with disabilities than their public school district. In 11 cases, the difference was 5 percent or greater.

The Queen City STEM School is part of TMSA, the self-designated “premier public charter school district.” Only 2.78 percent of its students had disabilities, yet it received an $800,000 grant to expand. There was a 6.99-point difference in the percentage of students with disabilities between the for-profit run Torchlight Academy and the public school district in which it is located. It is likely that its harsh no-excuses discipline code that includes corporal punishment discourages students with disabilities from enrolling.

Segregation by design?

Although each awardee has promised to increase its number of educationally disadvantaged students, the policies and practices used by many seem designed to ensure that little progress will be made.

University of Colorado Boulder Professor Kevin Welner and doctoral candidate Wagma Mommandi researched the ways that charter schools influence the makeup of their student bodies, which they describe in their upcoming book, “School’s Choice: How Charter Schools Control Access and Shape Their Enrollment.” Mommandi and Welner documented 13 different approaches — from marketing decisions to push-out discipline. “In the hands of unscrupulous operators, charter schools can become a devastating tool for exclusion and segregation,” Welner said.

Catered lunches

One of the categories identified by Mommandi and Welner was whether the school participated in the National School Lunch Program.

Ninety-five percent of all publicly funded K-12 U.S. schools, including charter schools, participate in the National School Lunch Program. Rates of reimbursement increase slightly as the proportion of eligible students increases.

Despite the near-universal participation in the program, 24 of the 35 open grantee schools do not participate in the National Lunch Program and made it clear in their application that they have no plans to apply. Instead, they claimed, their schools have their own equivalent program to provide for students in need.

We took a closer look.

Achievement Charter Academy (ACA) received a $400,000 CSP grant. It was previously a private school, operated by a mother-and-daughter team that previously ran a private school. The school stated in its application: “ACA will not participate in the National School Lunch program for reimbursement. To provide parents autonomy in food choice, ACA will purchase $50 gift cards from Food Lion. Parents who qualify for FRL can choose to receive one gift card per month per child instead of catered lunches and pack lunch daily.”

The small amount doled out is substantially less than what the National Lunch Program would provide. Equally concerning is the fact that the child would bring a low-cost lunch from home even as classmates eat catered lunches.

This concern was expressed by one of the reviewers of the school’s grant application: “Will all students have an option of purchasing lunch from the MyHotLunchBox or other local vendors? If not, how will the school ensure that EDS students who qualify to receive this lunch are not easily identified by peers as receiving this service?”

The percentage of students who are economically disadvantaged at ACA is not published on the report card website. However, in its first year of operation as a charter, 77 percent of ACA’s students were White compared to 44 percent of the home district, Harnett County Schools.

A lack of a solid plan to provide an alternative lunch or breakfast to students in need was often cited in other reviews of North Carolina’s successful CSP grant proposals. A few examples are listed below.

• “The application’s lunch plan needs to include more assurances that all students will receive affordable and nutritious meals. Presently, the plan identifies an ‘intent’ rather than a clear explanation for how the meals will meet the EDS population’s needs.” The Exploris School. Economically Disadvantaged gap: 26.12 percent.
• “The applicant does not provide any additional details of how the school will offer food service to all students, nor do they outline a plan to collect free and reduced-price lunch information.” Hobgood Charter School. Economically Disadvantaged gap: 71 percent.
• “The $25,000 revenue from the current hot lunch plan may not be enough to cover the cost of providing lunch for the increased educationally disadvantaged enrollment.” Bradford Preparatory Academy. Economically Disadvantaged gap: 46 percent.

Bradford Preparatory Academy, in its application, explained that it caters lunches from Jimmy Johns and Panda Express. “All lunches remaining after 12:15 p.m. are given to students or staff without lunches that day, so they don’t go to waste.”

Lack of transportation

A second and equally important factor in attracting disadvantaged students is transportation, which is another access-shaping concern raised by Mommandi and Welner in their coming book.

Several of the North Carolina grantees are located in rural counties. Others are in White neighborhoods within integrated school districts. Without a robust transportation plan to bring disadvantaged students to the school, diversity is unlikely.

The Exploris Charter School relies on parents to provide transportation — either individually or through carpooling. Its transportation policy on its website says the following: “We have chosen to focus our resources on teacher quality and a safe facility, rather than providing transportation for students on school buses.”

In summaries of the application, reviewers noted that while the school was looking into purchasing one or two vans, they would be used for field trips, not daily transportation.

Nearly all applicants had weak plans for transportation that relied on carpooling, very limited bus service and cluster stops that would still necessitate parents driving long distances to drop children off. Comments by reviewers included:

• “The Applicant proposes to implement cluster stops to eliminate transportation barriers. Is applicant confident that families will be able to get their student(s) to the cluster stop in order to catch the bus to school?” Lake Lure Classical Academy. Economically Disadvantaged gap: 52.3 percent.
• “The applicant’s transportation plan relies primarily upon carpool to transport students to and from school. The applicant provides no data to indicate that this will be sufficient, particularly for ED students.” Cardinal Charter Academy at Wendall Falls, a Charter Schools USA school. Economically Disadvantaged gap: 13.2 percent.

Expected donations

Not included in the federal Charter School Program application was an inquiry regarding whether parents were expected to donate time or money to the school, which also presents challenges for low-income parents. Therefore, we searched awardees’ websites and handbooks to answer that question. In several cases, the answer was yes.

The Cardinal Charter Academy, run by for-profit Charter Schools USA, requires parents to volunteer a minimum of 20 hours a year for one student and 30 for two or more students. “Each family is required to complete a minimum of 20 hours (30 if you have 2+ students) each school year. If they cannot meet that requirement, the website says they can “buy out” of their obligation by providing $20 gift cards for every hour they cannot complete.

Grantee ArtSpace Charter School also requires families to “complete 20 hours of volunteer time per family each year.”

Two Rivers Charter School encourages all parents and staff to make a donation. In addition, all parents are expected to commit to a minimum of four hours per month after submitting to a background check.

For families who are working multiple low-paying jobs to make ends meet, such expectations can drive them away.

For-profit charter operators

Only nonprofit charter schools may receive CSP grants, and the Education Department issues strict guidelines regarding those operated by for-profits. Those guidelines, however, did not discourage the North Carolina Department of Education from giving CSP grants to four charters operated for profit.

The executive director of Torchlight Academy, which received a $500,000 grant, is Donnie McQueen. His wife, Cynthia, is the principal of the school. McQueen is also the executive manager of Torchlight Academy Schools, LLC, the for-profit management company (EMO) that manages not only Torchlight Academy but another soon to be opened CSP grantee, Elaine Riddick Charter School.

McQueen operates the school with a sweeps contract — a contract by which all revenue goes to his EMO, which also owns the building. From the school’s 2017 audit: “As part of the consideration received under the agreement, TAS also provides the facility in which the school operates. The fee for these services are [sic] 100 percent of all revenues received by the school.”

From hiring his wife as principal to every aspect of the school’s day-to-day operations, McQueen’s company controls it all, including student discipline, according to the contract.

Torchlight Academy, a majority-minority school, is a no-excuse charter school that uses corporal punishment as reported by the school on page 10 of its application for the grant. Families must sign a behavioral compact that says students agree to “accepting the consequences from Torchlight Academy staff.”

Torchlight Academy’s grant application provides little in the way of strategy on how it will increase the number of educationally disadvantaged students in a school where educationally disadvantaged students are already overrepresented and where more than 1 in 4 students have been chronically absent during the past three years. Its largest budget item for the project is “professional fees and contractual services” ($510,000), all of which would be provided by the for-profit entity.

In addition to Torchlight Schools, the national for-profit chains Charter Schools USA, Charter One, and National Heritage Academies will run grantee schools. To learn more about these for-profits and their contracts, read a report by the Network for Public Education here.

Why did these charter schools receive CSP grants?

It is likely that some of North Carolina’s grantees are sincere in their desire to expand enrollment to include more disadvantaged students. But the evidence is clear from applications and school websites that many of the awardees are engaged in practices known to keep minority and disadvantaged students out.

This was not lost on some of the application reviewers. In commenting on the Exploris School’s application, one reviewer noted: “It is difficult to understand why The Exploris School will need $600K to support an average increase of only 34 ED students per year. Given the large amount of the funding request, it appears that much of it will ultimately benefit The Exploris School’s non educationally disadvantaged students.”

The above is one of many critiques of applications that questioned the goals and strategies of the applications. Yet the grant was awarded.

Each of the awards was signed by David Machado, director of the Office of Charter Schools in North Carolina. He is the administrator of the grant and the former director of Lincoln Charter School.

Machado signed off on his former school’s award of $700,000 to expand its educationally disadvantaged school population, even though “the applicant indicated that they are currently at capacity for grades K-8 at the Lincolnton and Denver campuses, and the Denver campus is also at capacity for grades 9-12.” The gap between the economically disadvantaged population of Machado’s former charter school (6.3 percent) and the district where it is located is 44 percent.

What should the Biden administration do?

It is easy to blame Betsy DeVos for giving a $26.6 million grant to a state whose charter sector has come under repeated fire for increasing segregation in an already segregated school system.

Now the Biden administration and Secretary Miguel Cardona own the grant. Indeed, they own the whole flawed Charter Schools Program. Biden’s just-released proposed budget suggests flat funding for the program despite its well-known problems.

Will the administration continue to send funds to schools that physically discipline students or make their parents pay the school with gift cards when they cannot volunteer? Will it fund the mission of a White Pentecostal Church and expand schools that snub the National Lunch Program?

The Every Student Succeeds Act, which authorizes the CSP program, allows the secretary of education to “terminate or reduce the amount of the grant” [see Section 4303] following a mandated review in year three by the department. Will Education Secretary Miguel Cardona continue to fund schools whose existence has been based on avoiding those ideals?