Charter Schools Education Industry Funding Privatization

Carol Burris: The CARES 2 Act Allows Charter Schools to Double Dip

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As you probably know by now, charter schools took federal money from two different pots in the CARES Act passed last spring. They got a share of the money allocated for public schools, then had the privilege of getting more money from the Paycheck Protection Program, which was intended to save small businesses in danger of shuttering their doors.

Now there is new relief Act, which is far more generous to public schools, but still allows charter schools to count as both public schools and not-public schools.

Carol Burris did research on the new CARES Act (which she calls CARES2) and found that once again charters will be allowed to double-dip.

On December 21, Congress passed the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.

CARES 2 (which I am dubbing the Act for simplicity) includes $54.3 billion for K-12 schools, which is about four times more than the last bill. It will be allocated to states to give out as subgrants to Local Education Agencies (LEAs). LEAs are school districts as well as the majority of charter schools. Those charter schools that are not independent of a school district will receive their funding in the same manner as district schools.

According to the law firm Arnold and Porter, which has an excellent summary of the Cares 2 here,  “Like the requirements in the CARES Act, the Secretary of Education must allocate ESSERF (Elementary and Secondary School Emergency Relief Fund) funding based on the state’s share of Title I, Part A funds under ESEA, and states will allocate at least 90 percent of funds as subgrants to Title I schools.”

There is also more leeway on how funds can be used—practically, schools can use it for any activity allowed under federal law.

There is an additional pot of money ($4 billion) that the Secretary of Education will distribute. $1.3 billion can be used by the Governors for public schools and higher ed institutions that were the hardest hit by the pandemic. $2.75 billion can be distributed by governors to private schools. Congress expressly prohibits in the Act the use of any of that money to fund vouchers or tax credits for tuition. The funds must be used to keep the school going, and private schools with high-needs students get priority. 

Can private schools and charter schools dip into the SBA’s Payroll Protection Plan (PPP) funding again? 

Private schools that get money from the $2.75 billion cannot. The CARES2 specifically says they cannot double-dip.

However, there is nothing to prevent a charter school from double-dipping, that is, getting both the ESSERFand PPP2. PPP2 will allow charter schools that are first-time borrowers to apply without stipulation. Suppose the charter received PPP in the first round. In that case, they could apply again if they show a 25% decline in revenue. 

In the first round, charter schools received at least $1.5 billion dollars in PPP. Once again, public schools get the short end of the stick. 

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