DeLauro Introduces Legislation to Rein in For-Profit Charter Schools

"For-profit companies are disguising themselves as schools, trading in taxpayer funds for boosted profits at the expense of our children's learning," said Congresswoman DeLauro. "For-profits, unlike non-profit organizations, are responsible for maximizing profit for their owners and investors, and that creates tension between what is best for students and what is best for profiteers. The CHARTER Act would reaffirm federal law and ensure that for-profit education management organizations can no longer exploit loopholes that have given them access to funding intended for non-profit entities. Education empowers the American Dream, and every child deserves access to a quality education that puts them first- not profits for owners and investors."

"Profit should never be a driving force in public education, and charterschools should not be exploited to siphon federal funding intofor-profit schemes," said Congresswoman Suzanne Bonamici. "I'm grateful to be leading this initiative with Rep. DeLauroto keep student funding in public schools where it belongs."

"For too long, for-profit companies in Arizona and across the country have exploited loopholes to cash in on our public education system - putting profits ahead of students and operating with little accountability," said Congresswoman Adelita Grijalva. "That's unacceptable. Every dollar meant for our kids should be going into classrooms, teachers, and resources - not into corporate pockets. I'm grateful to join Congresswoman DeLauroinintroducing the CHARTER Act so that we can make clear that our children are not a business model to be profited off of."

In 2006, the United States Court of Appeals Ninth Circuit Court inArizona State Board v. United States Department of Education found that the terms ''elementary school'' and ''secondary school'' in the Elementary and Secondary Education Act (ESEA) of 1965 and the Individuals with Disabilities Education Act (IDEA) were limited to nonprofit entities, holding that for-profitcharterschoolswere ineligible for Federal funds under the ESEA and the IDEA. In response to the decision, many for-profitcharterschools reorganized as for-profit operators of nonprofit organizations, enabling them to continue to receive federal funds under the ESEA and the IDEA. Using this loophole, charterschools run by for-profit education management organizations (EMOs) or other charter school "operators" receive federal funds only to have their schools run by low-quality, for-profit companies determined to extract taxpayer dollars with no little to no public transparency.

"Congresswoman DeLauro is right." said Randi Weingarten, President, AFT: Education, Healthcare, Public Services, "Charter schools were initially intended to seed innovation like magnet and community schools. However, many charters, while receiving generous public support, ignore the responsibilities that come with it: serving all students, reporting student outcomes, engaging the community, and respecting their employees, including their right to join a union. We know this well as we represent charter school educators across the country. These problems are even worse when for-profit charter management companies get involved. The results can be devastating: haphazard school closures and district finances left in disarray, with students hurt, and educators, school districts and parents forced to clean up the mess. Congresswoman DeLauro is trying to clean this up with the Championing Honest and Responsible Transparency in Education Reform (CHARTER) Act."