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Is There a Growing Political Backlash to For-Profit Charter Schools?

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Ohio's Democratic nominee for governor is calling for a ban on for-profit companies running charter schools in a race that has been heavily influenced by the costly failure of the state's largest online charter school. While Richard Cordray is calling for an outright ban, the Republican nominee, Mike DeWine, has also proposed more accountability for online schools, although he has stopped short of advocating for a prohibition on for-profit charter operators.

The Electronic Classroom of Tomorrow, which at its peak enrolled some 15,000 students statewide, shuttered midyear when the state demanded the school repay it for overbilling Ohio by $80 million in a dispute over student attendance numbers. The state's attorney general is now suing ECOT's founder as well as the companies he launched to run the school.

But Ohio isn't the only state where for-profit charters are under increasing political pressure. Lawmakers in California recently passed a bill prohibiting for-profit companies from running schools. Gov. Jerry Brown, a Democrat, signed the bill earlier this month—a rare piece of legislation that had the backing of both the teachers' unions and the state's charter school association.

The current push in California was galvanized by an investigation by The Mercury News in San Jose which found dismal academic performance and fudged attendance records in schools run by K12 Inc., the nation's largest for-profit management company of online K-12 schools.

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"I think there have been efforts in states over the years to regulate more closely management organizations, both non- and for-profit," said Todd Ziebarth, the senior vice president for state advocacy at the National Alliance for Public Charter Schools. "I do think the pushback on for-profits ... is felt more, and I think we have seen more action on it."

Are Charter Schools Non-Profit? EdWeek Explains

Generally speaking, for-profit charter management groups are not a popular idea among Democratic charter supporters, a split in the charter sector that at the very least has been highlighted by Betsy DeVos' ascendency to education secretary. Democrats for Education Reform, a political advocacy group that supports charter schools, opposes for-profit operators.

Although there are bills filed almost every year to bar for-profit management groups, it's rare for states to retroactively ban them like California has. There has been more of a trend, said Ziebarth, of states limiting for-profit operators at the onset.

Maine, Mississippi, and Washington have all passed charter school enabling legislation since 2010 that prohibits, either outright or in part, for-profit companies from running schools.

In addition to those three states and California, another three have some kind of ban on companies running charter schools, according to the National Alliance of Public Charter Schools: New York, Tennessee, and Rhode Island. Arguably New Mexico could be on that list. (More on that in a second).

But does banning for-profit charter management companies work as policymakers intend?

A spokesman for K12 Inc. told EdSource, an online education news site, that the company doesn't believe it will have to change how it does business to comply with the new law—the schools are already independently run by their boards.

This issue has also arisen recently in New Mexico. State law prohibits companies from making staffing decisions or running schools outright, but they can still contract with schools to provide services such as curriculum. But, a 2017 legislative report raised concerns over whether the companies that run the New Mexico's three online charter schools play too large of a role in operating the schools.

The report concluded that "overfunding and open-ended contracts allow virtual charter schools to send large amounts of money to for-profit companies with limited transparency."

Ziebarth said these bans could also turn into a game of whack-a-mole.

"There is a danger that the problems we see in the charter sector, we might clean it up, but we might just push this problem over into the districts," he said.

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