Charter Schools:
Profit Destroys Education

May 23, 2005

For-profit charter schools have been a huge disaster for the children in the cities where they were imposed.

Congress passed charter schools acts in 1994 and 1997, pushing local school districts to let private enterprise take over or create schools.

The justification for this was that the competition of "market pressures" would force these schools and the public schools to perform and deliver a quality product. The track record has shown otherwise.

In Michigan, seventy-five% of charter schools are run by for-profit companies. These schools are paid with public education funds, but they are not controlled by the public. Because these schools are run by private companies, they don’t have to reveal how they have used their money, or how much profit they have made. As far as the communities are concerned, the schools are just big holes that the money gets poured into.

These companies find many ways to make their profits. The schools set up shop in abandoned theaters, storefronts, supermarkets–and often, old school buildings that the school district has closed. These buildings are often owned or leased by a management company that is owned by the for-profit charter school company. The charter school, run by the same company, gets state education money for each student–$7,000 in Michigan. The school then pays the management company hundreds of thousands of dollars per year in rent.

The educational quality in most cases is worse than in the public schools. Students at the charter schools around Detroit have scored lower than Detroit public school students on the Michigan statewide test.

How could it be otherwise? The profit taken out of these schools is money NOT spent on education. So schools have a high number of uncertified teachers; a high turnover rate, with sometimes several teachers teaching the same class in a school year; and even classes taught by a string of temporary service employees. At the ten schools run by one company, Charter School Administrative Services, 62% of teachers are uncertified. This same company received 42 million dollars from the state of Michigan last year. This is money that did NOT go to the public schools. And that’s just one company, running ten schools. There are 215 charter schools in Michigan.

A number of Detroit parents pulled their children out of the public schools out of desperation, trying to find someplace that would provide a quality education–only to move their children from one charter school to another. The parents often end up bringing their children back to the Detroit public schools.

But in the meantime, those charter schools have gotten that $7,000 per student per year. And when students move back to the Detroit public schools, the money often doesn’t move with them–the charter schools just keep the money they were paid for that year, so the public schools have to accommodate these extra students without the state aid they would normally get. This puts an even greater financial strain on the public schools.

In 1996, the Wall Street firm Lehman Brothers issued a report in which it said, "the education industry may replace health care ... as THE focus industry." That’s exactly what the charter schools are: private industry taking over public education, squeezing out all the profit they can–and leaving children with an even worse education.