Archives for category: For-Profit

The United States never allowed for-profit “public schools” until the charter industry emerged. Now they are spreading.

Jim Hall, a retired principal in Arizona, has formed Arizonans for Charter School Accoubtability to expose their sleazy deals and to show how children and taxpayers are cheated.

Jim Hall is a hero of public education, helping to save a democratic institution from profiteers.

He gathered information about two of the state’s many for-profit charters are using tax dollars to make big profits, while public schools are suffering continual cutbacks. It was shared in the mainstream media.

CBS 5 in Phoenix reported:

PHOENIX (CBS5) – A Valley charter school watchdog is criticizing large charter management chains for directing more dollars away from the classroom than most traditional public schools.

“These schools are made to make a profit,” said Jim Hall, the founder of Arizonans for Charter School Accountability and retired longtime Valley school principal.

“Someone needs to find out how they’re spending their money, and there needs to be transparency,” Hall said.

CBS 5 Investigates examined budget data and IRS tax filings for dozens of charter schools. Among the findings:

Some charter management chains spend as little as 40 percent of their budgets in the classroom, directing as much as 60 percent of their budgets to administrative expenses, plant operations and debt payments for facilities. Traditional school districts spent an average of 54 percent of their budgeted dollars in the classroom during the 2013-14 school years, according the Arizona Auditor General’s Office. The comparison may not be “apples to apples” because charters pay real estate costs out of their operating budgets while traditional school districts do not.

Some nonprofit chains outsource daily operations to for-profit charter management companies. Two examples in Arizona include the Leona Group and Imagine Schools.

Over 100 international organizations signed a statement critical of privatization of education in Kenya and Uganda. They specifically criticized the World Bank for endorsing a for-profit chain of schools called Bridge International Academies. According to the statement released today, “BIA is backed by Bill Gates, Mark Zuckerberg, Pierre Omidiyar, and multinational publishing company Pearson, among others. It operates in Kenya and Uganda, with plans to invest in Nigeria, India and other countries. It now has close to 120,000 pupils enrolled in more than 400 schools.” The endorsers of the statement believe these countries need free public education with qualified teachers, not for-profit schools with untrained teachers.

The press release, with links, reads as follows:

Over 100 organisations around the world express deep concerns about the World Bank support for privatisation in education

Press release – 14 May 2015
(Nairobi, Kampala, Washington DC, Brussels)

Today, more than one hundred national and international organisations across the world released a joint open statement addressed to the president of the World Bank, Jim Kim. The statement expresses their deep concerns about the World Bank’s expressed support for the development of a multinational chain of low-fee profit-making private primary schools targeting poor families in Kenya and Uganda, Bridge International Academies (BIA). It comes as a response to a recent speech of the president of the World Bank, Jim Kim, who praised BIA as a means to alleviate poverty.

With signatories including community-based, national, and international organisations, as well as networks and trade unions representing thousands of organisations and millions of individuals in five continents, the statement reflects a growing global movement questioning policies in support for private education in developing countries, including from the World Bank. The statement was written and signed by 30 organisations in Uganda and Kenya, which are the countries primarily affected by the World Bank policy, and received the additional support of 116 organisations.

BIA uses highly standardised teaching methods, untrained low-paid teachers, and aggressive marketing strategies to target poor households, building on their aspiration to a better life to sell them its services.

According to a resident of Mathare, one of the oldest informal settlements in Nairobi, where BIA operates:

“Bridge, they come here, but they don’t understand how things work. They don’t work with other schools, with the community. They just come from door to door to sell their product.”

Nevertheless, the World Bank has invested 10 million dollars in BIA, while on the other hand it has no active or planned investments in either Kenya or Uganda’s public basic education systems.

In his speech delivered earlier in April, Jim Kim claimed that that “average scores for reading and math have risen high above their public school peers” in Bridge International Academies. Yet, the source of the data quoted by Jim Kim has not been disclosed by the World Bank, and it appears to have been taken directly from a study conducted by BIA itself.

The World Bank president further stated that “the cost per student at Bridge Academies is just $6 dollars a month”. This suggestion that $6 is an acceptable amount of money for poor households to pay reveals a profound lack of understanding of the reality of the lives of the poorest. Kenyan and Ugandan organisations have calculated that for half of the population in Kenya and Uganda, spending $6 per month per child to send three primary school age children to a Bridge Academy would cost at least a quarter of their monthly income – whereas these families are already struggling to be able to provide three meals a day to their children.

Moreover, the real total cost of sending one child to a Bridge school may in fact be between $9 and $13 a month, and up to $20 when including school meals. Based on these figures, sending three children to BIA would represent 68% (in Kenya) to 75% (in Uganda) of the monthly income of half the population in these countries.

Salima Namusobya, the Director of the Initiative for Socio-Economic Rights, a Ugandan organisation that also signed the joint statement, said:

“If the World Bank is genuine about fulfilling its mission to provide every child with the chance to have a high-quality primary education regardless of their family’s income, they should be campaigning for a no-fee system in particular contexts like that of Uganda.
The speech from Jim Kim came shortly after members of civil society from several countries, including Uganda, met with senior education officials of the World Bank specifically to discuss its support for fee-charging, private primary schools, and funding for BIA in particular.

It also comes at a time where there is an unprecedented increase in financing of private education across the world, especially in Africa, often with the support of foreign investors. These investments have attracted equally growing criticism, including in a recent report highlighting how the UK government, via its Department for International Development (DfID), supports privatising education and health services. DfID is also an investor in Bridge International Academies.
The organisations’ statement calls on the World Bank in particular to stop promoting and cease investing in Bridge International Academies and other fee-charging, private providers of basic education, and instead to support the free, public, quality education which the laws applicable in Kenya, Uganda, and other countries require.

Notes

BIA is backed by Bill Gates, Mark Zuckerberg, Pierre Omidiya, and multinational publishing company Pearson, among others. It operates in Kenya and Uganda, with plans to invest in Nigeria, India and other countries. It now has close to 120,000 pupils enrolled in more than 400 schools.

Documents

* The statement can be found on http://bit.ly/statementWBprivatisation

* The letter accompanying the statement sent to Jim Kim, and which sums up the arguments made in the statement, can be found on http://bit.ly/letterWBprivatisation

* For more information on privatisation in education and projects currently being run, check http://bit.ly/privatisationproject.

* Follow the hashtag #EducationBeforeProfit on social media

Contacts

David Edwards, Education International Deputy General Secretary, via email: David.Edwards@ei-ie.org or mobile: 0032 473 84 73 61

Education International
Internationale de l’Éducation
Internacional de la Educación

Communications,
Head Office|5 bd du Roi Albert II|1210 Brussels |Belgium
Tel.:+32 2 224
06 11 | Fax: +32 2 224 06 06 | http://www.ei-ie.org

The industry that has been the most effective in buying protection in D.C, for its predatory practices is the for-profit college industry. It has hired the top lobbyist in both parties. It makes generous campaign contributions. It collects billions from taxpayers to underwrite its behavior. All of this money is used to enrich the industry leaders. Need I add that these institutions are known for predatory practices and for supplying a lousy education.

This article, written by David Halperin and published in The Nation, lays bare the power of this industry and how well it has used its resources to avoid scrutiny of it. The article appeared nearly one year ago.

Now Halperin has published a new article, predicting the end of the predatory colleges. He cites the bankruptcy of mega-chain Corinthian Colleges as a hopeful sign. He thinks that Washington is ready to take them on. Count me cynical. I will believe it when it happens.

Historians and teacher John Thompson wonders whether Arne Duncan and other reformers will ever be held for the failed reforms of the past 14 years?

“To try to protect every patient, doctors order screening tests. Accountability systems exist to ensure the quality of those systems and their proper usage. It would make no sense to punish doctors and technicians for the results that their tests produce (although some healthcare reformers sound like they want to do so). Accountability systems also monitor the professionalism and practice of the healthcare providers who use them. Doctors, however, would not submit to the type of output-driven accountability regimes that are being imposed on teachers.”

When will reformers admit that test-and-punish policies have failed?

When will they be accountable?

Our blog poet writes a poem for Pearson:

Pearson cares deeply…

about what’s in their pocketses

“Stopping by schools on a doughy evening’ (with apologies to Robert Frost)

Whose schools these are I think I know
Their houses are in the village though
They will not see the Pearson test
And see their schools farmed out for dough

The classroom teacher thinks I jest
Reform without an expert guest
Between the test and Common Core
And iPads, VAMs and all the rest

She spots her pink slip on the door
And curses her value-added score
The only other sounds the sweep
Of janitor broom on hallway floor

The pockets are lovely, dark and deep
And I have promi$e$ to keep
And million$ to make before I sleep
And million$ to make before I sleep

Paul Thomas of South Carolina calls out the charter industry for its spiraling frauds, hoaxes, profits, and resegregation.

At the end of his post, he includes a list of readings:

“It’s Charter Scam Week again—time for the annual corporate Charter School Week P.R. campaign. Time to point out how that charter advocacy has revealed itself in the following ways:

“Charter advocacy cannot be about improving student achievement since charter schools consistently have a range of outcomes similar to public schools.

“Charter advocacy cannot be concerned about resegregation of schools by race and class since charter schools are significantly segregated.

“Charter advocacy is a thinly veiled attempt to introduce school choice as “parental choice” despite the U.S. public mostly being against channelling public funds into privately run schools.

“Charter advocacy is tolerating at best and perpetuating at worst schools for “other people’s children”—a system that subjects minority and high-poverty children to limited learning experiences, extensive test-prep, and authoritarian/abusive disciplinary policies.

“Charter advocacy chooses to ignore that charters eject some the most challenging students, ELL and special needs students.

“Charter advocacy also ignores that nothing about “charterness” distinguishes charter from public schools.

“Charter advocacy has committed to the (dishonest) “miracle” approach to demonizing public schools, and abandoned the original ideal of charter schools as pockets of experimentation (means and not ends) for the improvement of the public school system.

“The problem for charter advocacy is that the evidence is overwhelmingly counter to nearly every claim in favor of charter schools.”

– See more at: http://www.progressive.org/news/2015/05/188123/charter-scam-week-2015#.dpuf

For years, for-profit “colleges” have been criticized for false promises and preying on veterans, low-income students, and students of color. Congressional efforts to rein them in have been stymied by their high-priced lobbyists from both parties. They pay protection money and continue to fleece their students, many of whom Re saddled with debt and no education or job prospects.

Corinthian Colleges was one of the biggest and worst. It recently collapsed in bankruptcy, despite the US Department of Education’s bailout.

Thousands of students were left holding the bag, and they are threatening not to repay their student loans for a worthless education.

Bottom line: For-profit colleges should be prohibited or closely regulated. Instead they ate left free to rip off unausoecting students and to continue their predatory practices.

Don’t expect any change during the remaining days of this administration. Undersecretary of Education Ted Mitchell is in charge if this issue, and he is a supporter of for-profit education. When he was chosen, he was CEO of NewSchools Venture Fund, which helps build charter chains and advocates for for-profit education.

Thanks to politico.com for highlighting this shameful story.

Politicians in the Florida legislature love to regulate public schools, demanding accountability. They live to launch charters and vouchers that are deregulated, to prove that deregulation is a very good thing, except for public schools.

But now we learn that the politicians have been busy deregulating for-profit colleges while sweeping in campaign contributions from these institutions and their sponsors.

“The rules are different for for-profit colleges. Despite fraud lawsuits and government investigations involving for-profit colleges all over the country, Florida’s Legislature continues to encourage the industry’s growth while reducing quality standards and oversight. Florida’s attorney general has been less aggressive than some counterparts in pursuing the schools when they skirt laws involving the hundreds of millions they receive in state and federal money.

In one city, Homestead, a school owner gained enormous influence with the local government, working through the mayor, whose wife the owner secretly hired as a $5,000-a-month consultant. The Miami-Dade state attorney’s office looked into the connection but decided it was no crime.”

The groups with the biggest checkbook tend to set the agenda, said one critic.

Is this helping American education? Of course not. Is it helping students? Nope.

Read more here: http://www.miamiherald.com/news/local/education/article19191054.html#storylink=cpy

Ah, the Brave New World of free-market schooling! The for-profit corporation Imagine Schools just sold its campus in east Manatee, Florida, for $6.6 million. The school will continue to operate there; it has a capacity of 650, and an enrollment of 500 students.

 

The school, which has about 500 students and a capacity for 650, has roughly nine years left on a lease commitment for the two buildings involved in the sale.

 

Completed in 2009, the school at 10535 Portal Crossing occupies about three acres. The sale equated to a 10% capitalization rate based on the school’s rent, says Ian Black, whose commercial real estate brokerage firm represented both sides in the transaction.

 

“What made this transaction somewhat unusual was that Hemisphere didn’t know where Lakewood Ranch was at first, but as they conducted their due diligence and discovered that the ranch had just turned 20 years old, they began to recognize the area’s value and the value of the school, which is a beautiful facility that’s well located,” says Black, founder and president of Ian Black Real Estate.

 

The Imagine School in Lakewood Ranch is one of 17 such charter schools in Florida, and among 71 Imagine campuses nationwide. In 2013, Imagine’s parent company generated revenue of $250 million, according to marketing materials compiled for the sales effort.

 

Meanwhile, in Ohio, Imagine Schools was fined nearly $1 million by a federal judge for forcing a lucrative lease agreement on a school it operated.

 

Under the complex deal, Imagine Schools negotiated the pricey lease with SchoolHouse Finance and presented it to the school board of the Renaissance Academy for Math and Science for approval. Imagine Schools owns SchoolHouse Finance and directly benefited by the agreement.

 

“This clearly constituted self-dealing,” U.S. District Judge Judge Nanette K. Laughrey wrote in a blistering 29-page ruling.

 

The Columbus Dispatch added:

 

Sound familiar? The Dispatch in October reported about a North Side charter school spending more than half of the tax dollars it receives on rent in a very similar lease deal with Imagine Schools and SchoolHouse Finance. The board of the Imagine Columbus Primary Academy asked Imagine to renegotiate the lease but that has not happened.

 

Other Ohio charter-school operators use similar lease deals, and while apparently legal, supporters and opponents complained that they wasted tax dollars and lawmakers pledged to take a look.

 

In the earlier story, the Columbus Dispatch learned that an Imagine Schools charter school was paying more in rent than to staff and other costs.

 

A North Side charter school expects to spend more of the tax dollars it receives this school year on rent than on teachers and staff.

 

Imagine Columbus Primary Academy projects building-lease payments of $700,000, making rent the school’s top expense, eating up more than half its annual state revenue, according to a school financial report. The school expects to pay $614,000 on salaries and benefits this year.

 

Similar arrangements are in place for the other five Imagine Schools in Franklin County.

 

Who is charging the charter schools such high rent? A company called SchoolHouse Finance — which is a subsidiary of Imagine.

 

It gets even more complicated: SchoolHouse buys the buildings, resells them typically for two or three times the purchase price, and then leases the facility from the new owner so it can rent the space back to Imagine.

 

Five of the schools in Franklin County received a combined $20.2 million in the 2012-13 school year, according to their most recent state audits. A quarter of that money — more than $5.1 million — was spent on rent, all under long-term leases with SchoolHouse Finance.

 

A sixth school, Imagine Integrity Academy, spent 81 percent of its $440,009 in state aid on rent, according to an audit for the 2011-12 school year, the most recent available.

 

And on top of the leases, Imagine is being paid hundreds of thousands of dollars for “indirect costs” as operator of the schools, records show.
The upshot is that the complex deals are diverting hundreds of thousands of public dollars to one of the nation’s largest charter-school operators, Imagine Schools Inc., and its affiliates. Imagine operates 67 charter schools in 11 states and the District of Columbia. At least three states and Washington, D.C., are investigating Imagine for real-estate maneuvers like those in Ohio, and a fourth state, Missouri, already has shut down several Imagine schools.

 

Why aren’t these for-profit schemes illegal? Why should tax dollars enrich profiteers?

The Center for Popular Democracy released a bombshell report on the financial consequences of charter deregulation and lack of public oversight. It is called “The Tip of the Iceberg: Charter School Vulnerabilities to Waste, Fraud, and Abuse.”

 

When public money is handed over to private corporations or individuals to operate schools, there must be regular monitoring of  and audits. Absent financial monitoring, the result is predictable: waste, fraud, mismanagement, and financial abuse. Does this help education? No, it enriches people who are either in the education business for the money or incompetent to manage the finances of a school.

 

Here is the executive summary released with the report:

 

A year ago, the Center for Popular Democracy (CPD) issued a report demonstrating that charter schools in 15 states—about one-third of the states with charter schools—had experienced over $100 million in reported fraud, waste, abuse, and mismanagement. This report offers further evidence that the money we know has been misused is just the tip of the iceberg. Over the past 12 months, millions of dollars of new alleged and confirmed financial fraud, waste, abuse, and mismanagement in charter schools have come to light, bringing the new total to over $200 million.

 

Despite the tremendous ongoing investment of public dollars to charter schools, government at all levels has failed to implement systems that proactively monitor charter schools for fraud, waste, abuse, and mismanagement. While charter schools are subject to significant reporting requirements by various public offices (including federal monitors, chartering entities, county superintendents, and state controllers and auditors), very few public offices regularly monitor for fraud.

 

The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.4 billion in 2015.b 1 The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.

 

Setting up systems that detect and deter charter school fraud is critical. Investments in strong oversight systems will almost certainly offset the necessary costs. We recommend the following reforms:

 

Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers.
Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability.
Increased transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.

 

 

To read the full post: http://populardemocracy.org/sites/default/files/Charter-Schools-National-Report_rev2.pdf

 

It contains a long list of examples of charter fraud, waste, abuse, and mismanagement. And it is only the tip of the iceberg.

 

 

 

 

 

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