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Opinion | Michigan charters run by for-profits bring mediocrity, secrecy

When it comes to education, Michigan’s number one. Unfortunately, that’s not a good thing.

Once again, Michigan has the dubious distinction of being the state with the highest percentage of charter schools run by for-profit corporations in the nation. Eighty-one percent of Michigan’s nearly 300 charter schools contract with private management companies, often referred to as Charter Management Organizations (CMO).

Casandra Ulbrich is the former president of the State Board of Education.

What do we get in exchange?  Mediocre results and a lack of financial transparency.

As the former president of the Michigan State Board of Education, I was often told by charter choice advocates that charters report the same information as every other traditional public school. As an educational administrator and researcher, I knew from experience this was false. And in my last year in office, I led a Freedom of Information Act (FOIA) exercise that proved it.  

As the recently released report, Chartered for Profit II: Pandemic Profiteering, published by the Network for Public Education (NPE) — of which I am a board member — explains, the charter industry downplays the prevalence of charter schools being run for profit. The report explains how by using webs of related corporations, for-profit charters take ownership of school buildings and real estate, sometimes charging their own schools excessive leasing rates. Then, when the building is paid off, the property is flipped — at times to another entity they created, forcing taxpayers to re-pay off real estate that the public does not own. 

Has any of this resulted in increased student achievement? The answer is a resounding no. Nationally, charters run as for-profit graduate students at lower rates and with more adverse academic outcomes as the number of charter services managed by for-profit operators increases. That comes from a report published by the pro-charter Thomas B. Fordham Institute. Here in Michigan, student achievement relative to national averages has declined since charters were introduced.   

The vast wealth created by the industry has allowed it to influence policymakers and keep regulations lax. But taxpayers are calling for better laws that create a level field for all. That is why the recent Biden Administration regulations put the brakes on giving for-profit-run schools Charter School Programs funding. It’s time for Michigan to do the same. 

The NPE report outlines six simple policy changes that could be made to close many legal loopholes and ensure public funds end up serving students, not profiteers. In addition, at the end of 2022, the State Board of Education issued a common-sense resolution calling for increased charter school transparency in our state. The resolution calls on the Legislature to strengthen charter school laws, including: 

  • Requiring CMO contracts to include annual audited financial statement provisions
  • Requiring CMOs to produce annual audited financial statements for authorizers to account for any fees collected to oversee charters
  • Requiring all schools to post annual student recruitment costs
  • Subject CMOs to the Freedom of Information Act (FOIA) 

It’s time to ensure our most dedicated charter schools prosper and bad actors are weeded out. 

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