Some charter schools are founded by teachers, parents, or activists who feel restricted by traditional public schools. State-authorized charters (schools not chartered by local school districts) are often established by non-profit groups, universities, and some government entities. Additionally, school districts sometimes permit corporations to manage chains of charter schools. The schools themselves are still non-profit, in the same way that public schools may be managed by a for-profit corporation. It does not change the status of the school. In the United States, though the percentage of students educated in charter schools varies by school district, only in the New Orleans Public Schools system are the majority of children educated within independent public charter schools.
Minnesota was the first state to pass a charter school law in 1991. California was second, in 1992. As of 2009, 41 states and the District of Columbia have charter school laws.
The second is that charter schools are accountable for student achievement. To date, 12.5% of the over 5000 charter schools founded in the United States have closed for reasons including academic, financial, and managerial problems, and occasionally consolidation or district interference. The rules and structure of charter schools depend on state authorizing legislation and differ from state to state. A charter school is authorized to function once it has received a charter, a statutorily defined performance contract detailing the school's mission, program, goals, students served, methods of assessment, and ways to measure success. The length of time for which charters are granted varies, but most are granted for 3–5 years. Charter schools are held accountable to their sponsor—a local school board, state education agency, university, or other entity—to produce positive academic results and adhere to the charter contract. While this accountability is one of the key arguments in favor of charters, evidence gathered by the United States Department of Education suggests that charter schools are not, in practice, held to higher standards of accountability than traditional public schools. That point can be refuted by examining the number of traditional public schools that have been closed due to students' poor performance on end-of-course/end-of-grade tests. Typically, these schools are allowed to remain open, perhaps with new leadership or restructuring, or perhaps with no change at all. Charter school proponents will assert that charter schools are not given the opportunities to restructure often and are simply closed down when students perform poorly on these assessments.
Although the U.S. Department of Education's findings agree with those of the National Education Association (NEA), their study points out the limitations of such studies and the inability to hold constant other important factors, and notes that "study design does not allow us to determine whether or not traditional public schools are more effective than charter schools."
In 2007, the annual survey produced by the Center for Education Reform, a pro-charter school group, found that 54% of charter school students qualified for free or reduced lunches. This qualification is a common proxy for determining how many low-income students a given school enrolls. The same survey found that half of all charter school students fall into categories that are classified as “at risk.”
In August 2005, a national report of charter school finance undertaken by the Thomas B. Fordam Institute, a pro-charter group, found that across 16 states and the District of Columbia—which collectively enroll 84 percent of the nation’s one million charter school students—charter schools receive about 22 percent less in per-pupil public funding than the district schools that surround them, a difference of about $1,800. For a typical charter school of 250 students, that amounts to about $450,000 per year. The study asserts that the funding gap is wider in most of twenty-seven urban school districts studied, where it amounts to $2,200 per student, and that in cities like San Diego and Atlanta, charters receive 40% less than traditional public schools. The fiscal inequity is most severe in South Carolina, California, Ohio, Georgia, Wisconsin, and Missouri. The report suggests that the primary driver of the district-charter funding gap is charter schools’ lack of access to local and capital funding.
A 2008 study that looked at charter school funding in all 40 charter states and the District of Columbia found that charter students are funded on average at 61 cents compared to every dollar for their district peers, with charter funding averaging $6,585 per pupil compared to $10,771 per pupil at conventional district public schools.
In contrast, an August 2002 article from the Education Policy Analysis Archives at Arizona State University suggested that charters in economically depressed areas may receive more funding than the traditional public schools that surround them.
Although charter schools may receive less public funding than traditional public schools, a portion of charter schools' operating costs can come from sources outside public funding (such as private funding in the form of donations). A study funded by the American Federation of Teachers, found that in DC charter schools, private funding accounted for $780 per pupil on average and, combined with a higher level of public funding in some charters (mostly due to non-district funding), resulted in considerably higher funding when compared to comparable public schools. Without federal funding, private funding, and "other income", D.C. charter schools received slightly more on average ($8,725 versus $8,676 per pupil), but that funding was more concentrated in the better funded charter schools (as seen by the median DC charter school funding of $7,940 per pupil). With federal, private, and "other income", charter school funding shot up to an average of $11,644 versus the district $10,384 per pupil. The median here showed an even more unequal distribution of the funds with a median of $10,333. Other research, using different funding data for DC schools and including funding for school facilities, finds conflicting results.
Current laws have been characterized as either "strong" or "weak." "Strong-law" states mandate considerable autonomy from local labor-management agreements and bureaucracy, allow a significant number of charter schools to be authorized by multiple charter-granting agencies, and allocate a level of funding consistent with the statewide per pupil average. According to the Center for Education Reform, a pro-charter group, in 2008 Minnesota, the District of Columbia, Michigan, Arizona, and California had the "strongest" laws in the nation. Mississippi and Iowa are home to the nation’s "weakest" laws, according to the same ranking.
70 percent of charter schools are found in states with the "strongest" laws: Arizona, California, Colorado, Massachusetts, Michigan, Minnesota, and North Carolina.
In the aftermath of Hurricane Katrina, over half of the New Orleans schools that are re-opening are doing so as charter schools.
Minnesota wrote the first charter school law in the United States in 1991. As of 2011, Minnesota had 149 registered charter schools, with over 35,000 students attending. The first of these schools was Bluffview Montessori School, in 1992. Other schools include the City Academy (1992), the Aspen Academy(2007), and the Mainstreet School of Performing Arts(2004). Since then other states have approved the formation of charter schools. The state government of Texas approved the formation of charter schools in 1995. Early critics feared that charter schools would lure the highest performing and most gifted students from centrally-administered public schools. Instead, charter schools have tended to attract low income, minority, and low performing students. Undoubtedly the most radical experimentation with charter schools has occurred in New Orleans in the wake of Hurricane Katrina. The New Orleans Public Schools system is currently engaged in reforms aimed at decentralizing power away from the pre-Katrina school board central bureaucracy to individual school principals and charter school boards, monitoring charter school performance by granting renewable, five-year operating contracts permitting the closure of those not succeeding, and vesting choice in parents of public school students, allowing them to enroll their children in almost any school in the district. New Orleans is the only city in the nation where the majority of public school students attend charter schools.
While since 1989 there is also provision for Designated Special Character schools, thus far only two have been created. (These are not to be confused with 'state integrated' schools—mostly Catholic, and formerly private—that are "integrated" into the public school system, while retaining their proprietor—which are required to have a "special character" in their integration agreement with the Crown that would be preserved by the school's continuance.)
Prior to the 2010 General Election, there were about 200 academies (publicly funded schools with a significant degree of autonomy) in England. The Academies Act 2010 aims to vastly increase this number.
Alberta charter schools have much in common with their U.S. counterparts. there were 22 charter schools in the province, operated by 13 charter school authorities, compared with over 50 school boards, with the largest one alone having over 200 schools. The idea of charter schools initially sparked great debate and is still controversial, but has had limited impact. , Alberta remains the only Canadian province that has enabled charter schools.
The Swedish system of "free schools" was instituted in 1992. Free schools are publicly funded by school vouchers but independent in governance, and can be run by both charity groups or for-profit companies. The schools are not allowed to supplement the vouchers with tuitions or top-up fees, and pupils must be admitted on a first-come, first-served basis - entrance exams are not permitted. There are about 900 free schools in total throughout the country.
In 2009, the most authoritative study of charter schools was conducted by the Center for Research on Education Outcomes (CREDO) at Stanford University. The report is the first detailed national assessment of charter schools. It analyzed 70% of the nation's students attending charter schools and compared the academic progress of those students with that of demographically matched students in nearby public schools. The report found that 17% of charter schools reported academic gains that were significantly better than traditional public schools; 46% showed no difference from public schools; and 37% were significantly worse than their traditional public school counterparts. The authors of the report considering this a "sobering" finding about the quality of charter schools in the U.S. Charter schools showed a significantly greater variation in quality as compared with the more standardized public schools with many falling below public school performances and a few exceeding them significantly. Results vary for various demographics with Black and Hispanic children not doing as well as they would in public schools, but with children from poverty backgrounds, students learning English, and brighter students doing better; average students do poorer. While the obvious solution to the widely varying quality of charter schools would be to close those who perform below the level of public schools, this is hard to accomplish in practice as even a poor school has its supporters.
A more recent synthesis of findings conducted by Vanderbilt University indicates that solid conclusions cannot be drawn from the existing studies, due to their methodological shortcomings and conflicting results, and proposes standards for future meta-analyses.
The results using statistical controls to control for demographic and baseline state test scores found a positive effect among charter schools similar to a year spent in one of Boston’s selective exam schools, with math scores, for instance, showing positive effects of 0.18 and 0.22 standard deviations for charter middle and high schools respectively compared to an effect of 0.20 and 0.16 standard deviations for exam schools. For pilot schools, the report found that in the middle school grades pilot school students modestly underperform relatives to similar students attending traditional BPS schools (-0.05 standard deviations in ELA and -0.07 in math) while showing slightly positive results in the high school grades for pilot schools (0.15 standard deviations for writing and 0.06 for math).
The results using a sub-sample of schools with random lottery results found very large positive effects in both math and ELA scores for charter schools, including 0.16 and 0.19 standard deviations in middle and high school ELA scores respectively and 0.36 and 0.17 standard deviations in middle and high school math scores respectively. Boston’s pilot schools, however, showed a concerning negative effect in middle school math and ELA and a slightly positive effect in high school.
When evaluating New Orleans’ schools against the 200 point index called the State Performance Index (SPI), 19 of the 20 highest performing non-selective schools were charter schools. Charter schools affiliated with charter management organizations such as KIPP tended to perform better than stand-alone schools. The overall percentage of schools performing below the failing mark of 60 fell from 64% in 2005 to 36% in 2009.
The threat of vouchers, wavering support for public education, and bipartisan support for charters has led some unions to start charters themselves. Several AFT chapters, such as those in Houston and Dallas, have themselves started charters. The National Education Association has allocated $1.5 million to help members start charter schools. Proponents claim that charters offer teachers a measure of empowerment, employee ownership, and governance that might be enhanced by union assistance (Nathan). Former President Bush's No Child Left Behind Act also promotes charter schools.
Over two dozen private management companies are scrambling to increase their 10 percent share of a "more hospitable and entrepreneurial market" (Stecklow 1997). Boston-based Advantage Schools Inc., a corporation specializing in for-profit schooling, has contracted to run charter schools in New Jersey, Arizona, and North Carolina. The Education Development Corporation was planning in the summer of 1997 to manage nine nonsectarian charter schools in Michigan, using cost-cutting measures employed in Christian schools.
Charter schools provide an alternative for educators, families and communities who are dissatisfied with educational quality and school district bureaucracies at noncharter schools. In early 2008, the Friedman Foundation for Educational Choice, a pro-charter organization, conducted two polls in primarily conservative states Idaho and Nevada where they asked parents about their preferences concerning education. In Idaho, only 12% of respondents said that their regular public school was their top choice for the children’s school. Most preferred private schools over other options. In 2008, Polls conducted in the conservative states Georgia and Wyoming found similar results.
The charter approach uses market principles from the private sector, including accountability and consumer choice, to offer new public sector options that remain nonsectarian and non-exclusive. Many people, such as former President Bill Clinton, see charter schools, with their emphasis on autonomy and accountability, as a workable political compromise and an alternative to vouchers. Others, such as former President George W. Bush, see charter schools as a way to improve schools without antagonizing the teachers' union. Bush made charter schools a major part of his No Child Left Behind Act. Despite these endorsements, a recent report by the AFT, has shown charter schools not faring as well as public schools on state administered standardized testing, though the report has been heavily criticized by members of conservative think tanks like William G. Howell of the Brookings Institute. Other charter school opponents have examined the competing claims and suggest that most students in charter schools perform the same or worse than their traditional public school counterparts on standardized tests.
Both charter school proponents and critics admit that individual schools of public choice have the potential to develop into successful or unsuccessful models. In a May 2009 policy report issued by Education Sector, "Food for Thought: Building a High-Quality School Choice Market", author Erin Dillon argues that market forces alone will not provide the necessary supply and demand for excellent public schools, especially in low-income, urban neighborhoods that often witness low student achievement. According to Dillon, "In order to pressure all public schools to improve and to raise student achievement overall, school choice reforms need to not just increase the supply of any schools. They need to increase the supply of good schools, and parents who know how to find them." Drawing lessons from successful food and banking enterprises located in poor, inner-city neighborhoods, the report recommends that policymakers enhance the charter school market by providing more information to consumers, forging community partnerships, allowing for more flexible school financing, and mapping the quality of the education market.
Although charter advocates recommend the schools control all per-pupil funds, charter advocates claim that their schools rarely receive as much funding as other public schools. In reality, this is not necessarily the case in the complex world of school funding. Charter schools in California were guaranteed a set amount of district funding that in some districts amounted to $800 per student per year more than traditional public schools received until a new law was passed that took effect in fall 2006. Charter advocates claim that their schools generally lack access to funding for facilities and special program funds distributed on a district basis. Sometimes private businesses and foundations, such as the Ameritech Corporation in Michigan and the Annenberg Fund in California, provide support. Congress and the President allocated $80 million to support charter-school activities in fiscal year 1998, up from $51 million in 1997. Despite the possibility of additional private and non-district funding, a government study showed that charter school may still lag behind traditional public school achievement.
Charters sometimes face opposition from local boards, state education agencies, and unions. Many educators are concerned that charter schools might siphon off badly needed funds for regular schools, as well as students. In addition, public-school advocates assert that charter schools are designed to compete with public schools in a destructive and harmful manner rather than work in harmony with them. To minimize these harmful effects, the American Federation of Teachers urges that charter schools adopt high standards, hire only certified teachers, and maintain teachers' collective-bargaining rights.
In March 2009, the Center for Education Reform released its latest data on charter school closures. At that time they found that 657 of the more than 5250 charter schools that have ever opened had closed, for reasons ranging from district consolidation to failure to attract students. The study found that "41 percent of the nation's charter closures resulted from financial deficiencies caused by either low student enrollment or inequitable funding," while 14% had closed due to poor academic performance. The report also found that the absence of achievement data "correlates directly with the weakness of a state's charter school law. For example, states like Iowa, Mississippi, Virginia and Wyoming have laws ranked either "D" or "F". Progress among these schools has not been tracked objectively or clearly." A 2005 paper found that in Connecticut, which it characterized as having been highly selective in approving charter applications, a relatively large proportion of poorly performing charter schools have closed. Under Connecticut's relatively weak charter law, only 21 charter schools have opened in all, and of those, five have closed. Of those, 3 closed for financial reasons. Charter school students in Connecticut are funded on average $4,278 less than regular public school students.
In a September 2007 public policy report, education experts Andrew Rotherham and Sara Mead of Education Sector offered a series of recommendations to improve charter school quality through increased accountability. Some of their recommendations urged policymakers to: (i) provide more public oversight of charter school authorizers, including the removal of poor-quality authorizers, (ii) improve the quality of student performance data with more longitudinal student-linked data and multiple measures of school performance, and (iii) clarify state laws related to charter school closure, especially the treatment of displaced students.
Critics have accused for-profit entities (Educational Management Organizations or EMOs) and private foundations such as the Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation, and the Walton Family Foundation of funding Charter school initiatives to undermine public education and turn education into a "Business Model" which can make a profit. According to activist Jonathan Kozol, education is seen as one of the biggest market opportunities in America or "the big enchilada".
It is as yet unclear whether charters' lackluster test results will affect the enacting of future legislation. A Pennsylvania legislator who voted to create charter schools, State Rep. Mark B. Cohen of Philadelphia, said that "Charter schools offer increased flexibility to parents and administrators, but at a cost of reduced job security to school personnel. The evidence to date shows that the higher turnover of staff undermines school performance more than it enhances it, and that the problems of urban education are far too great for enhanced managerial authority to solve in the absence of far greater resources of staff, technology, and state of the art buildings."
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