School Choice Movement Exhibits Momentum Amid Pandemic (July 2)

School choice legislation gained significant traction across the nation during the pandemic, as public schools were forced to shut down and transition to online learning with little preparation, according to an article published by the Pew Research Center: 14 states have enacted laws making it “easier for parents to transfer their students out of public schools,” and at least 12 state legislatures have debated school choice measures. In March, West Virginia passed the nation’s broadest nonpublic school voucher program, shifting $22 million to $24 million away from public schools annually and requiring an additional $103 million a year in funding, reported The West Virginia Gazette.

Arkansas, Iowa, Kansas, Montana, Oklahoma, and South Dakota all created or expanded tax-credit scholarships this year, which make donations that fund private school scholarships tax-deductible. Arkansas, Florida, Georgia, Indiana, and Maryland expanded existing voucher programs this session as well, according to Pew. Indiana, Kentucky, and Missouri all created new educational savings account (ESA) programs this year, with Kentucky’s program overriding a veto from Democratic Governor Andy Beshear. In mid-June, a non-profit representing 168 of Kentucky’s 172 public schools filed suit with the state as a last-ditch effort to block the legislation.

School choice measures proliferating in state legislatures this year represent a shift from earlier programs, reported Pew. The center specifically noted the popularity of ESAs nationwide since 2011, which “are broader than vouchers and grant money to parents for a wide range of educational expenses, funded by public dollars or tax-deductible donations.” Previously, state funded vouchers were used to pay for “limited groups of high-needs students to attend private schools on state-funded scholarships.” ESAs allow states to provide vouchers to a broader set of families who can apply them to a broader range of expenses, diverting more funds away from public schools than ever before.

By design, these voucher programs “divert students and money away from public schools and toward private and religious schools,” continued Pew, and “in some cases,” they divert students and funds to “schools that discriminate based on religion and sexual orientation, or that teach alternate views on subjects such as American slavery and evolution.”

To highlight the reality of tax dollars supporting discriminatory private schools, Pew cited a 2020 investigation by The Orlando Sentinel that “found that more than 150 private schools in Florida’s voucher program denied admission to LGBTQ students or the children of LGBTQ parents.”

To date, according to Pew, 29 states—plus Puerto Rico and Washington, D.C.—have one or more voucher, ESA, or tax-credit scholarship program, and voucher-like proposals have passed at least one legislative chamber in Iowa, Montana, and New Hampshire. Last week, New Hampshire’s legislature proposed a two-year budget that includes a sweeping school voucher plan, a reduction in the statewide education property tax, and a $25 million cut in public school funding, according to a report by Reaching Higher New Hampshire (RHNH), a non-profit education policy center and advocacy group. Now, reported Pew, school choice advocates are gearing up to protect this years’ gains and to build upon them in the next legislative session.

- Andrew Thomas

Supreme Court to Hear Maine Religious School Tuition Case (July 5)

The U.S. Supreme Court decided to hear arguments in Carson v. Makin, which challenges a Maine Department of Education policy that bars families from using public tuition dollars for religious schools while allowing families to use the money for public or nonsectarian private schools, reported U.S. News & World Report.

The policy in question “allows families who live in towns that don’t have public school to receive public tuition dollars to send their children to the public or private school of their choosing,” according to the Associated Press. The program excludes religious schools “because the education they provide is not equivalent to” public education, Maine Attorney General Aaron Frey told the AP.

The plaintiffs –a coalition of parents represented by the Institute for Justice, a non-profit libertarian public interest law firm –claim that the policy violates the First Amendment right to freedom of religion by discriminating against religious schools. The appeal was approved by the Supreme Court in a 6-3 vote after all lower courts had ruled in favor of the state.

Carson v. Makin rides on the coattails of recent Supreme Court decisions related to religious schools in Missouri and Montana that “opened the door for more challenges to rules about religious schools and public funding,” the AP reported. In Montana, the Supreme Court ruled by a 5-4 vote that “states have to give religious schools the same access to public money that other private schools benefit from,” continued the AP.

The case was added to the court’s docket and will be heard when the Court’s new session begins in October.

- Andrew Thomas

Wall Street Journal Celebrates School Choice Advances (July 6)

The Wall Street Journal editorial board celebrated “a banner year for school choice” after four state budgets in the last two weeks increased funding to school choice initiatives, including tax-credit scholarships, vouchers, and charter schools. The recent developments build on a year of momentum for school choice advocates as the pandemic challenged public schools across the country.

The paper praised New Hampshire’s new Education Freedom Accounts, a voucher program available to families earning up to 300 percent of the federal poverty line that “could save the state at least $360 million over a decade.” 

Reaching Higher New Hampshire, a non-profit education policy center and advocacy group, estimated that the program will cost the state $70 million in new spending and cause local school districts to lose $15 million in funding in its first three years.

In Pennsylvania, Democratic Governor Tom Wolf approved a budget that includes a $40 million expansion of the Educational Improvement Tax Credit, bringing its cap to $175 million and providing for 13,000 additional scholarships for K-12 students seeking private education.

Ohio’s Governor Mike DeWine signed a budget last week that “packaged several school-choice provisions” together, according to the Journal. The budget increases state funding for “high-performing charter schools” and “higher scholarship values for the state’s voucher program,” and also creates a new K-12 Education Savings Accounts (ESAs), which function like debit cards allowing parents to spend funds on a range of educational services.

Arizona’s legislature passed a budget that raises the funding cap for a “special-needs tax-credit scholarship program” and allows “low-income students at struggling public schools to switch to the state’s ESA program without a waiting period,” reported the Journal. However, the editorial board criticized Arizona’s failure to expand the availability of ESAs to 600,000 more low-income students, an initiative they encouraged in a February editorial. The state’s vouchers are “used by fewer than 10,000 students in a set of narrow categories,” the board lamented in February.

In sum, the editorial board noted, the choice movement has achieved significant momentum over the pandemic year: “seven states have created new tax-credit scholarship or ESA programs this year, and more than a dozen have expanded programs.”

- Andrew Thomas

Record Number of Students in North Carolina Turn to Home Schools, Private Schools (July 7)

State figures released last week revealed that North Carolina’s home-school population grew by record numbers last year and that “enrollment in private schools rose by the largest number in 24 years during the coronavirus pandemic,” according to The Raleigh News & Observer.

During the 2020-21 school year, the share of home-school students rose by 20.6 percent and the state’s private schools saw a 3.3 percent increase in enrollment. Meanwhile, public schools saw a 5 percent drop in enrollment.

While North Carolina’s home-school population had been rising steadily before the pandemic, the state saw a 30,727 jump last school year, according the News & Observer. “A record 19,924 home schools opened last school year,” representing “a 103 percent increase over the prior year,” the paper continued. North Carolina’s increase in home-schooled students seems to be following a national trend. The News & Observer cited a report by the AP that showed that “home schooling had doubled between the start of the pandemic and last fall.”

The pandemic also brought on the “largest single-year increase in [private school] enrollment since 1997,” adding 3,282 new students. The record boost in enrollment was paired with a record number opening of private schools in North Carolina, with 32 additional schools bringing the total to 783, according to the News & Observer. Charter schools grew by nearly 9,000 students last school year, as well.

The rise in home-school and private school enrollment reflects the frustration parents experienced when public schools shut down last spring and resorted to remote learning, following COVID-19 precautions. Many private schools opened their doors to students before public schools could do so and attracted parents who were fed up with distance-learning. As a result, the percentage of students attending traditional public schools fell from 81 to 76 percent, representing a 70,000-student drop. The biggest drop in public school enrollment was in kindergarten, reported the News & Observer, “where some families have opted to wait a year before enrolling their children.”

For many families, the switch to private schooling may have been a temporary one that revealed their frustration with COVID-19 protocols. However, North Carolina’s Department of Public Instruction (DPI), according to the News & Observer, projects that “school districts will recover most of the students they lost during the pandemic.” In fact, the budget recently approved by the state senate prevents the DPI from stripping state funding from public school districts whose enrollment “comes under projections” this fall, and “includes a bigger than normal reserve to give to districts whose enrollment is above projections.”

- Andrew Thomas

Pennsylvania Boosts Funding to Public Education and Tax-Credit Scholarships (July 8)

Pennsylvania Democratic Governor Tom Wolf last week signed the state’s annual budget, which provides historic funding increases for public and private education.

The budget provides for a $416 million increase in funding for public education, the largest single-year increase in state history, according to the Governor’s Office. However, the budget also provides an additional $40 million for the state’s Educational Improvement Tax Credit (EITC) program, increasing the program’s cap to $175 million and funding an estimated 13,000 additional scholarships for students seeking a private education, reported The Pittsburgh Post-Gazette.

State Republicans, however, were not satisfied with the $40 million infusion. Senate Education Committee Chairman Scott Martin, a Republican from Lancaster, drafted a proposal that would elevate the cap for the EITC program from $185 million to $300 million. The bill would also raise the cap of another tax-credit scholarship program, the Opportunity Scholarship Tax Credit, from $55 million to $100 million and provide for subsequent increases of up to 25 percent each year for both credits, depending upon demand.

Democrats on the Education Committee joined the state’s largest teacher’s union in expressing opposition to the proposal, noting that the programs “could surpass $8.5 billion over the next 15 years” and that the proposed bill does not provide any transparency measures for charter schools, according to the Post-Gazette. Meanwhile, The Wall Street Journal praised the expansion of the tax-credit scholarships in an editorial last week summarizing the growth of school choice in four states.

- Andrew Thomas

New Hampshire Vouchers to Test Private School Capacity (July 12)

In his column for The New Hampshire Union Leader, reposted by Yahoo News, Mark Hayward questioned whether the Granite State’s private schools have the capacity to accommodate the probable influx of new students that the state’s new voucher program could bring this fall.

New Hampshire’s Republican-majority state legislature passed a budget at the end of June that established “Education Freedom Accounts” (EFAs), equivalent to vouchers, for families who earn up to 300 percent of the federal poverty threshold, according to New Hampshire Public Radio. Hayward argued that though the new program “makes a private-school education easier to afford for thousands of New Hampshire families,” the requirement that the program serve students this coming fall means that the state and schools will struggle to build the necessary administrative and instructive infrastructure.

Many private and religious schools in New Hampshire are “nearly brimming with students,” wrote Hayward, as “parents turned to the schools for in-classroom instruction during the COVID-19 pandemic.” Last school year, Manchester Diocese schools “enrolled 500 new students and had 200 on a waiting list,” most of whom “were children whose parents could not be at home” while public schools were closed. As a result, last school year was the first in 15 years that the diocese saw an enrollment increase. The largest Montessori school in the state, North End Montessori School in Manchester, “is adding eight new classrooms and looking to hire as many as 16 new faculty.”

It is unclear for how many families the switch to private schooling was temporary, but schools that saw unprecedented increases in enrollment last year are struggling to expand while “grappling with labor challenges that bedevil most New Hampshire employers.” While private schools look to extend their capacity to instruct a possible influx of students this fall, the state is struggling to build the necessary administrative infrastructure to run the EFA program.

In response to the pandemic-driven momentum for private schooling, the law requires that the EFAs be available for students this coming school year, leaving state education officials scrambling to write rules specifying how the program will work and which private company will administer it. According to Hayward, “Education Commissioner Frank Edelblut said education officials must write emergency rules and award a short-term, no-bid contract for the Children’s Scholarship Fund to run the voucher program.” The Children’s Scholarship Fund administers New Hampshire’s Education Tax Credit scholarships established in 2012 by the Opportunity Scholarship Act.

It remains to be seen whether last year’s increase in private school enrollment, which happened in conjunction with the proliferation of school-choice initiatives nationwide, will continue into this school year, or whether New Hampshire’s EFAs will cause a second spike in enrollment. Similar voucher programs, known as education savings accounts (ESAs), exist across the country and are available to 21 million students, Hayward noted, but are only used by 1.3 million.

- Andrew Thomas

Missouri Launches ESAs (July 14)

Missouri Governor Mike Parson today signed HB 349, establishing an education savings account (ESA) program dubbed “Empowerment Scholarship Accounts,” The Kansas City Star reported.

The program uses scholarships funded by private donations that can be used for private school tuition, transportation, extra tutoring, and related educational expenses. According to the Associated Press, “donors to the program would get state tax credits equal to the amount they give, an indirect way to divert state tax dollars to private education.”

While a win for school choice advocates, the program comes with many caveats. Scholarships are only available to K-12 students in cities with a population of at least 30,000, which includes the state’s largest cities and many of their suburbs, according to the AP. This is because school choice legislation has traditionally struggled to gain traction among Republicans in sparsely populated rural areas where “public schools likely would be students’ only option regardless of changes in state law.”

The program is also “limited to students with disabilities on individual education plans and children from low-income families.” Tax credits will be capped at $25 million for the first year, and lawmakers “further restricted the program to kick in only if they budget at least 40% of the minimum public school transportation funding called for by law,” which they have this year, the AP reported.

Missouri students who meet these criteria could have access to scholarships through this ESA as soon as next year. In order to delay “the possible financial hit to districts,” lawmakers added a provision “that will continue to count voucher students in their home districts for funding purposes for five years after the program begins, even if those students switch schools.”

- Andrew Thomas

State Board of Regents Rejects New Charter High School for New York City (July 15)

The New York State Board of Regents this week rejected a proposal to build a new joint charter high school in New York City that would serve four K-8 charters, AMNY reported.

The proposal had been approved by the State University of New York trustees, the largest charter school authorizer in the state, but was then rejected by the Board of Regents as “an attempt to circumvent the charter cap in NYC.”

State law caps the number of charter schools in New York City at 290 and across the state at 460. While the proposed high school would exceed the city’s limit, the schools’ four operators hoped that the joint venture would be seen as an expansion of existing charters rather than an additional charter.

Teacher unions at the city and state level applauded the Board’s decision. Michael Mulgrew, the President of the city’s United Federation of Teachers, told AMNY that such attempts to circumvent the charter cap “should not only be rejected, but they should become part of the record about why we need stricter oversight of the charter sector –because charters are always trying to get more than their fair share.”

The editorial board of The New York Post lambasted the city’s charter school cap and the Board of Regents’ recent decision, citing a Post survey that found that “72 percent of New York households with incomes under $60,000 want the cap lifted.”

The decision comes a week after Eric Adams was declared the victor of the Democratic mayoral primary. The presumptive mayor has repeatedly expressed support for charter schools, though he has indicated that he favors keeping the cap, reported Chalkbeat.

- Andrew Thomas

Private School Enrollment in Pennsylvania Dropped Substantially During Pandemic (July 16)

A recent policy brief from Penn State’s Center for Education Evaluation and Policy Analysis found that “despite claims that students migrated from public to private schools to take advantage of in-person schooling … there was a decline in private school enrollment that was largely consistent with the slow and steady decline in enrollment of private schools across the last decade.”

The report challenges the popular narrative that the pandemic fueled a shift in enrollment from public to private schools.

The Center found that private school enrollment in Pennsylvania, in fact, fell 7.1 percent, more than double the public school enrollment decrease of 3.2 percent, according to the Philadelphia-based NPR and PBS affiliate WHYY. The data for private schools look better only if numbers are included for enrollment at Penn Foster, a for-profit, online private high school. With 13,000 students enrolled at Penn Foster, the decline in private school enrollment amounted to 1.5 percent. But the enrollment figures at Penn Foster could decline significantly once public schools reopen in September for in-person instruction.

According to the brief, “the majority of student enrollment loss was concentrated in the earlier grades,” including pre-kindergarten, for which the Center does not collect any data on private school enrollment. The concentrated drop in kindergarten and pre-K enrollment suggests that “many families opted to hold their children out of school for an extra year rather than navigate the ever-changing menu of in-person and online options,” reported WHYY. It remains to be seen whether families will re-enroll their students in the schools that they left and at which grade levels they will enroll them.

One exception to the across-the-board drop in enrollment was cyber charter schools, which are privately run and publicly funded. The online schools added more than 22,000 students in Pennsylvania during the pandemic, representing a 59 percent year-over-year increase, reported WHYY.

- Andrew Thomas

Indiana Virtual Charters Charged with Defrauding State of Over $150 Million (July 19)

Indiana Attorney General Todd Rokita filed suit against three virtual charter schools in an effort to recoup more than $150 million that the state says was wrongly obtained or misspent by the schools, The Indianapolis Star reported.

The State Board of Accounts conducted a special investigation that found that Indiana Virtual School, Indiana Virtual Pathways Academy, and Indiana Virtual Educational Foundation “had inappropriately received more than $68.7 million,” and that an additional $85 million was “improperly paid to 13 different vendors that were related to the schools through a common employee or family member.”

State investigators revealed that the charter schools “inflated their enrollment to defraud the state” by enrolling students who had merely requested information on the school’s Web site and by re-enrolling students who had left the schools, the paper reported. In one case, a school kept a deceased student officially enrolled for more than a year after the student’s death.

Investigators also found that from the 2016-17 school year to the 2018-19 school year, Indiana Virtual School and Indiana Virtual Pathways Academy “received more than $103 million in state funds and funneled more than $85 million to related parties.” Among them, American Pathways Academy – whose CFO, Merle Bright, is the father of the schools’ CFO, Greg Bright –received more than $32 million from the schools for which there are no invoices.

“The state calculated that American Pathways was overpaid by more than $22 million,” the Star reported, because the fees charged by the company were based on inflated enrollment figures. Merle Bright is also a signer on multiple bank accounts for the schools, and “signed more than $3 million worth of checks that the schools paid to American Pathways.”

Two other organizations with which Merle Bright is connected–Eightbit and Cyber Educational Services–were overpaid by more than $14 million and $8 million, respectively. AlphaCom, which was founded by the virtual schools’ founder Thomas Stoughton and for whom Merle Bright served as CEO and Treasurer, was overpaid by nearly $10 million, according to state investigators. More than $2 million in checks to AlphaCom were signed by the company’s founder, Stanton.

Indiana Virtual School and Indiana Virtual Pathways Academy operated in Daleville since 2011 and 2017, respectively, until Indiana Virtual Pathways’ charter was revoked over “issues with both academic performance and compliance with the state laws and regulations,” according to the Star.

- Andrew Thomas

New Hampshire Sets Interim Rules for Sweeping Voucher Program (July 21)

A month before the program’s launch on August 27, New Hampshire’s State Board of Education has approved an interim set of rules for the state’s new Education Freedom Accounts program, “bringing the Granite State a step closer to implementing one of the most sweeping school voucher-like programs in the United States,” The New Hampshire Bulletin reported.

When the state legislature established the program in a budget passed at the end of June, some questioned whether the state and private schools could build the necessary administrative and instructive infrastructure in time for a presumptive influx of students.

The program will be administered by the N.H. Children’s Scholarship Fund, which is one of two organizations overseeing the state’s existing tax-credit scholarship program. The program allocates at least $3,700, which would normally follow a child to their public school to qualifying parents to use for other educational expenses, including tuition and learning materials. Vouchers are available to families who earn up to 300 percent of the federal poverty threshold, New Hampshire Public Radio reported.

The rules, approved by the board in a unanimous vote, “sought to clarify areas the statute left vague, including how the accounts would be run and how they must be held accountable,” according to the Bulletin. They allow the N.H. Children’s Scholarship Fund to choose which educational providers qualify for vouchers. The rules dictate what the fund must report to the DOE as well as what measures it must take to root out abuse of the program, “either from families or education providers,” the Bulletin continued.

Since the rules were passed on an interim basis, they did not necessitate a public hearing and will last only six months. The New Hampshire Department of Education “is finalizing a permanent set of rules that will receive a public hearing in the coming months,” reported the Bulletin.

- Andrew Thomas

Covid, School Choice, and the Limits of the American Rescue Plan (July 22)

The recent trend of linking the pandemic to the growing demand for school choice programs constituted “an extension of older patterns of systemically underfunding public education and then creating a false message about failing and underperforming public schools and using that as a justification to send public funds to private schools,” Jessica Levin, director of Public Funds Public Schools, told Education Week.

Levin maintained that the struggle of districts to deal with the pandemic resulted from years of insufficient funding and highlighted the need for increased support of public schools.

According to Education Week, "District leaders have pointed to inadequate staffing, outdated buildings, and poor ventilation systems as hurdles to in-person learning."

The Biden administration allocated $129 billion in K-12 funding in March as a part of the American Rescue Plan, with $2.75 billion earmarked for private schools enrolling a significant portion of low-income students. The one-time cash infusion is meant to help schools reopen safely and reserves at least 20 percent of the funds for “helping students recover academically from the effects of school closures and remote learning,” according to The New York Times.

However, according to the Times, the money comes with stipulations that make it impossible for schools to address the pressing issues that have arisen from systemic underfunding.

For example, the Department of Education discouraged districts from using the funds for new school construction, and included a short time frame–all funds must be used by January 2025–that makes doing so nearly impossible. Many school districts, like Bristol Virginia Public Schools, “would like to use the new money to replace decrepit buildings,” but are unable to do so because of the federal guidelines, Superintendent Keith Perrigan told the Times.

The time frame in which the money must be spent also makes it difficult for schools to create new programs “that will not burden their budgets later on,” reported the Times. As a result, many public schools that are currently facing cuts in state funding will use the stimulus money to avoid layoffs, make up for budget shortfalls, temporarily decrease class sizes, and expand tutoring programs.

While the stimulus money may help alleviate the burden on public schools in the short term, many district leaders fear that the federal relief could complicate efforts to receive more state support, the Times continued, given that Republicans in state legislatures have criticized the size of the package and doubt the schools’ ability to “use it wisely.”

- Andrew Thomas

House Democrats Target For-Profit Charter School Operators (July 23)

The House Appropriations Committee approved the fiscal year 2022 Labor, Health and Human Services, Education, and Related funding bill along party lines, which included a provision that withholds federal funds from charters operated by education management organizations (EMOs): “None of the funds made available by this Act or any other Act may be awarded to a charter school that contracts with a for-profit entity to operate, oversee or manage the activities of the school.”

While Democrats argued that the provision is intended to curb the growth of EMOs, Republicans pointed to nonprofit charters that contract with for-profit non-management services as possible victims of the legislation.

The National Alliance for Public Charter Schools –a leading national advocacy group for charter schools –condemned the provision, claiming that it would be detrimental for those charter schools that “contract with businesses to provide students with services and supplies that they need,” such as cafeteria services and special education instruction, reported The Hill.

A Democratic congressional staffer pushed back on the alliance’s characterization, telling The Hill that the provision will not deny funds to the majority of U.S. charter schools–which are nonprofit organizations–but will apply only to the 10 percent of charter schools that are run as for-profit institutions. More specifically, the legislation does not bar charter or district schools from continuing the longstanding practice of contracting with commercially operated bus companies, food service providers, or textbook publishers.

House Appropriations Committee Chair Rosa DeLaura (D-Conn.) said that the language in the provision “is clearly focused on ending the practice of charters accepting federal funds only to have the school run by a low-quality, for-profit company rife with conflicts of interest,” The Hill reported.

Last week, the Indiana Attorney General filed suit with three virtual charter schools that defrauded the state of over $150 million, funneling over $85 million to for-profit companies run by related parties, including the father of the schools’ CFO and a company founded by the schools’ own founder, The Indianapolis Star reported.

The House bill also includes substantial increases in funding for public education, including a 62 percent increase for K-12 education programs, The Hill noted, as well as a $19.5 billion increase in Title I Grants to Local Educational Agencies and a $3.1 billion increase in funding for special education. The current House proposal will most likely not be the version eventually approved by Congress, as the final appropriations bill is subject to negotiations and revisions before a final vote, according to The Hill.

- Andrew Thomas

China Cracks Down on For-Profit Tutoring Companies (July 27)

The Chinese government published a broad set of reforms last week to transform for-profit education companies into nonprofits. The Ministry of Education declared that education has been “severely hijacked by capital,” according to Bloomberg, with the result being that the high cost of after-school tutoring was discouraging parents from having more than one child.

Education in China is hypercompetitive, in large part because of the gaokao, the Chinese equivalent of the SAT. In major cities, seven in ten students attend after-school tutoring, fueling a $100 billion education technology industry, according to The Wall Street Journal.

“The new rules restrict both tutoring services and the profits they generate,” reported EdSurge. “They limit online lessons to 30-minute sessions; impose a tutoring curfew of 9 p.m.; and prohibit instruction during weekends, holidays and school breaks. Companies that offer private instruction in core subjects will have to register as nonprofits and will no longer be able to raise investment capital through IPOs or advertise their programs.”

The regulations echo Beijing’s broader campaign to curb various parts of China’s technology industry, which has rattled tech giants like Alibaba and Didi Global Inc. The new rules circulated widely before being officially published, the Journal reported, and triggered rounds of selling on Friday and Monday in Hong Kong and New York. According to Business Insider, by Friday, shares in Chinese education companies had lost half of their value and continued their slide this week.

The Chinese government officially dropped its notorious one-child policy in October 2015, allowing couples to have two children. In May of this year, the government officially lifted the cap to three children. The low fertility rate in China today, according to the Journal, is viewed as a threat to productivity as well as the country’s pension system, which, like many pension systems, depends on allocations from working citizens to support retired citizens. Earlier in July, China said it would ease financial burdens and social restrictions associated with child-rearing in an effort to boost the country’s declining fertility rate. This set of reforms targeting the for-profit tutoring industry comports with this agenda.

In a series of statements, all the major education companies in China said that they would comply with the new rules and that they support the decisions of the Communist Party, according to Bloomberg.

What remains to be seen is what, if anything, the Chinese government will do to curb the growth of minban schools, described in detail in a 2019 NCSPE working paper by Yiwen Wang. These schools are privately run and charge tuition that is often beyond the budget of most families. These schools emerged in the wake of Deng Xiaoping’s transformation of the Chinese economy in the 1980s from one centrally planned to one driven by market forces. In 1994, there were 2,358 minban schools enrolling 451,000 students. By 2006, there were 16,527 minban schools enrolling 12,568,000 students. By 2019, there were 17,433 minban schools enrolling 22,163,600 students.

What also remains to be seen is what, if anything, the Chinese government will do to curb the growth of for-profit private schools operated by foreign companies such as Nord Anglia Education, with 20 schools across China; Avenues, which is opening its first K-12 school in Shenzhen this fall; and Whittle School and Studios, which operates a K-8 also in Shenzhen. The conventional perils of foreign direct investment pose a particular threat to such companies. The Chinese government could, in effect, regulate them out of existence, much as it has done, or at least aims to do, with for-profit tutoring companies.

- Andrew Thomas & Samuel E. Abrams

Charter Lobby Fights House Democratic Plan to Defund Commercially Operated Charters (July 29)

In a piece for the education newsletter Our Schools published by AlterNet, Jeff Bryant critiqued the campaign by the nation’s top charter school lobbying group to block a Democratic proposal that would stop sending federal funds to for-profit charter schools and cut funding for the troubled federal Charter Schools Program (CSP). Bryant called the campaign “misleading to say the least.”

Last week, the House Appropriations Committee approved the fiscal year 2022 education budget, which included a provision that explicitly withholds federal funds from charter schools that contract “with a for-profit entity to operate, oversee or manage the activities of the school.” The budget also called for a 9 percent cut to the CSP, a federal program authorized under President Clinton in 1994 to help charter schools open, replicate, and expand. While the proposal is clearly aimed at ending federal funding of for-profit charter schools, the National Alliance for Public Charter Schools (NAPCS) launched what Connecticut Democratic Representative Rosa DeLauro called “a well-funded misinformation campaign” in opposition, Bryant reported.

In a petition campaign published on its website, the NACPS claimed that the new legislation would “cut off ALL federal funding” to charter schools that contract with any business, according to Bryant. These claimed were echoed by the Alliance’s president and CEO Nina Rees when she told CNN that the legislation “could impact schools that contract out for cafeteria services, special education services, or back office staff.” Rees later claimed on Twitter that House Democrats were attempting to make charter schools “do without food, plumbing, and books,” Bryant reported.

Bryant called these claims “misleading to say the least,” pointing out that they “conflate school contracts for discrete services, like textbooks and professional development, with business arrangements that lead to a private entity taking over the complete operations of a school.”

Bryant also refuted the NAPCS’s claim that the legislation threatens to cut funding for all charter schools by citing the Alliance’s own analysis finding that only 12 percent of charters qualify as “for-profit.” Bryant wrote that the Alliance’s rhetoric “is certainly an exaggeration.” A Democratic congressional staffer told The Hill that the provision does not bar charters from continuing the longstanding practice of contracting with commercial operators offering discrete services.

According to Bryant, the campaign should be understood in part as one to shield millions of dollars in funding from the CSP that wind up in the NAPCS’s war chest. Bryant cited, for example, the $2,385,960 grant from the CSP awarded to the Alliance by former Secretary of Education Betsy DeVos in 2018. Between 2015 and 2019, the NAPCS spent more than $2.6 million lobbying the federal government for charter schools, meaning, Bryant inferred, that the grant from the CSP nearly covered the cost of the group’s federal lobbying.

- Andrew Thomas

China’s Crackdown on For-Profit Tutoring Sector Critiqued as Shortsighted (July 31)

Parents and experts expressed skepticism that the Chinese government’s recently announced reforms to curb after-school tutoring will achieve the government’s goals of reducing emotional as well financial stress on families, reported The New York Times. They contend the reforms will only widen the opportunity gap between rich and poor and make education more competitive. The real solution, according to those interviewed by the Times, is to replace China’s “test-score-obsessed culture.”

Last week, as a part of larger efforts to reign in technology giants and avoid a looming demographic crisis by curbing the costs of raising children, the Chinese government published a broad set of reforms to transform for-profit education companies into nonprofits.

This is not the only step that Beijing has taken to tamp down the country’s hyper-competitive education system. According to the Times, the government has banned homework, limited livestreaming hours for online tutors, and created more slots at top universities.

While banning for-profit tutoring services is meant to alleviate the anxiety and financial burden associated with succeeding in the Chinese education system, the rules may actually create new pressures, according to the Times. Families often rely on such after-school programs for child care, and the new policies come with no guarantees of a replacement. Instead, wealthy families will likely flock to private tutors or evade the new rules by shifting to online services and “paying through foreign payment systems,” Kevin Ferrone, the academic dean at Crimson Global Academy, an online school, told the Times. This will leave those families that can’t afford private or illicit services behind.

Parents like Scott Yang, who lives in Wenzhou and has an 8-year-old son, told the Times that the ban only “makes it harder for kids of poor families to succeed.” After-school tutoring may have been expensive, but for many families it was the only way for their children to compete. In cracking down on for-profit education companies without implementing any reforms to the strict standardized-test system, the Chinese government is adding to the burden on poor families, Yang said.

According to Siqi Tu, a postdoctoral research fellow at the Max Planck Institute in Germany who focuses on wealth and education in China, the real solution is to change the criteria by which universities select students, reported the Times.

- Andrew Thomas