The word “public” is an important part of charter school messaging. They’re not privatizing public education, they tell us, they’re “public charter schools.” And yet a USA Today investigation finds that charter schools got at least $1 billion in Paycheck Protection Program loans because they are private businesses. (Disclosure: Kos Media received a Paycheck Protection Program loan.)
The PPP loans were forgivable for businesses that didn’t lay off workers after getting the money. But some businesses needed them more than others, and charter schools were not at the top of the list, since they do receive substantial public funding. USA Today found that 93% of the charter schools receiving PPP loans also got their usual public money, and the schools also were eligible for federal COVID-19 grants to support social distancing. Actual public schools were eligible for the COVID-19 grants, but not PPP.
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Some of the schools should not have been eligible for the money: 22 of the nonprofit companies that got more than $2 million in PPP loans for schools they run have more than the 500 employees that was supposed to be the cutoff for the small businesses benefiting from the program. A majority of the schools that have more than $2 million in loans forgiven did not need the money—they had money on hand.
One school company, Arizona’s Primavera, got nearly $2 million in COVID-19 grants and $2 million in PPP loans and paid millions in shareholder distributions. Its founder has raked in more than $23 million in shareholder distributions since 2017. According to Nina Rees, president of the National Alliance for Public Charter Schools (like I said, “public” is a big part of the messaging), that’s just fine.
“Two facts can coexist,” she said. “The school may have needed the PPP loan and the management company may have earned a dividend for its overall business performance. They are not the same.” Sure, they “needed” the PPP money so they could pay the private management company millions of extra dollars.
”PPP loans were a lifeline for charter schools, enabling them to pivot quickly to absorb the extra expenditures related to the pandemic such as providing laptops, Wi-Fi hotspots, and additional teacher and staff training,” Rees said. That was a lifeline public schools didn’t get, because unlike the private businesses that call themselves public charter schools, they didn’t qualify. Not only that, but USA Today’s Craig Harris reports that while the overwhelming majority of charter schools continued getting their usual public funding, they “were among the first to get the [PPP] money—ahead of mom-and-pop shops and minority-owned companies.”
Even one charter school administrator thought it was ethically problematic for charter schools that weren’t losing funding to suck up PPP money.
“At the time PPP became available, we had not suffered financially,” said the superintendent of Albert Einstein Academies. “I saw PPP as a way to help small businesses, especially those in the service sector. … There is a fiscal way to look at it, and there's a moral and ethical way to look at it.”
Charter schools are far from the only industry to abuse PPP. A good idea in the broad strokes, it was seriously abused. But the particular ways that charter schools abused the program are telling not just about PPP but about these schools that claim to be “public” when it suits them while snatching up the privileges offered to private businesses.
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