Accountability Charter Schools Education Industry Funding Privatization

California Charter Schools Collect Millions Intended for Small Businesses

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The Network for Public Education has been tracking the charter schools that collected from the federal Paycheck Protectiin Program intended to help small businesses struggling to survive. The charter schools have not had any budget cuts, have lost no money, have not been struggling to pay employees, but their lobbyists get them included as eligible for the PPP funding, although public schools are not eligible.

The San Francisco Chronicle published a story about some of the charters in California that have applied for and received PPP money. You will not be surprised to see V that the Michelle Rhee-Kevin Johnson charter chain in Sacramento is among them.


WASHINGTON — Charter schools in the Bay Area received tens of millions of dollars from a federal coronavirus relief program intended for small businesses, money they say is necessary to stay afloat amid the pandemic.

The schools are alternatives to traditional public schools and are exempt from many state regulations related to class size, curriculum and teacher tenure, yet still receive state funding. Some of the Bay Area charters that got federal bailout money are also backed by Silicon Valley billionaires, and the board chairman of one school conceded that taking the aid could be an “optics issue.”

It’s the latest instance of the federal Paycheck Protection Program coming under scrutiny for giving money to businesses that fit the letter of the law, but which don’t fit the traditional notion of a small business. Among aid recipients were Shake Shack, the owner of Ruth’s Chris Steak House and the Los Angeles Lakers basketball team, all of which gave back the money after it was reported that they were beneficiaries.

But some Bay Area charters say they are well within the spirit of the program. Many teach students from low-income or lesser-served communities, and they say they will accept any resource that keeps their teachers paid and schools open amid uncertainty about state education budgets.

The federal aid is in the form of low-interest loans that recipients don’t have to repay if they meet certain requirements, including keeping all their employees on the payroll. During the initial window for loan applications in May, Bay Area charter schools received funds from the program in amounts ranging from a few hundred thousand to several million dollars.

How we reported the story.

The Chronicle was approached by Parents United for Public Schools and In the Public Interest, which oppose charter schools and the privatization of education, with research they had done on schools that had received aid under the federal Paycheck Protection Program. The Chronicle then independently verified the information and conducted further research, including contacting policy makers.

The Chronicle was able to review charter boards’ meeting videos, audio recordings, minutes, documents and agendas to identify loan amounts and recipients. The Chronicle then contacted high-dollar recipients and schools named in the story to verify the information and to give them an opportunity to share their perspective on taking the low-interest federal loans.

Fourteen charter schools or chains in Oakland combined to receive roughly $20 million from the program. They included Education for Change, which runs six schools in the city and received $5.25 million, and Lighthouse Community Public Schools, which has two campuses and got $2.3 million.

Eight charter schools or chains in Santa Clara County combined to receive roughly $20 million. All but one received at least $1.5 million. Summit Public Schools, which has three schools in the county and a total of eight in the Bay Area, received $6.8 million.

At least two schools in San Francisco received loans. San Francisco Creative Arts Charter School got nearly $600,000. Envision Education’s City Arts and Tech High School also received a loan, but says the money will go to its consulting business — not the school that is supported by public funds. It did not divulge the amount it received.

And the St. Hope charter schools in Sacramento, whose board is chaired by school choice advocate Michelle Rhee and which was founded by her husband, former Sacramento Mayor Kevin Johnson, received more than $1.5 million.

Some of the loans were first publicized by Parents United for Public Schools and In the Public Interest, which oppose charter schools and the privatization of education. The Chronicle independently verified their research and conducted its own.

Traditional public schools are not eligible for the Paycheck Protection Program, and state-funded charter schools’ access to the loans raises questions among their critics about fairness.

“Because charter schools are currently receiving full funding as public schools intended to maintain employees, while at the same time receiving funding as private entities that are also intended to maintain employees, taxpayers are left covering what appears to be the same bill twice,” the groups said in a report questioning whether Oakland schools were “double dipping” on funds.

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