For-Profit Charter Schools: An Evaluation of Their Spending and Outcomes

After a tumultuous reception, the Biden administration’s regulations for the federal Charter Schools Program (CSP) were finalized in July. Although the Administration backpedaled partway on issues related to community demand and racial integration, its final rules cracked down on so-called “for-profit charters,” in line with the president’s campaign promises. Soon, we’ll learn whether any charters that contract with for-profit management companies received CSP start-up grants, and/or whether states that allow for-profit charters were penalized as a result.

Technically, “for-profit charter schools” are non-profit organizations that contract out some or all of their operations or services to a for-profit organization—meaning the schools themselves are not for-profit. It’s also very common for all public schools—both traditional and charter—to use for-profit vendors for a variety of services, from transportation and building maintenance to food service and student tutoring.

This study, conducted by Stéphane Lavertu and Long Tran, uses administrative data from Ohio to explore whether a charter school’s use of for-profit organizations impacts school quality. Specifically, it asks:

1. What makes a charter school “for-profit” vs. “nonprofit”?

2. How do for-profit and nonprofit charter schools spend resources differently?

3. How does the effectiveness of “for-profit” charters compare to the effectiveness of traditional public schools and “nonprofit” charters, in terms of academic and nonacademic outcomes?