Charter schools continue to be a risky investment. The Albany (NY) Times Union reports that a Wall Street credit rating agency downgraded the bonds of certain Brighter Choice schools, once considered the “holy grail” of the charter school movement.
“Wall Street sensed trouble at the Brighter Choice middle schools for boys and girls even before the state notified them last month they may be forced to close their doors after this year.
One of the largest credit rating agencies, Fitch Ratings, in December downgraded the five-year-old schools’ bond ratings, citing improved but still lagging academic performance and the fact that the schools themselves had not sought full five-year renewals of their state charters.
In its Dec. 18 briefing for investors, Fitch noted the schools’ “limited renewal prospects” based in part on “testing results below (state) expectations…..”
The threat of closure looms large not just for the roughly 450 fifth- through eighth-grade students and staff but also for the Brighter Choice Foundation, which helped found the schools and could be on the hook for the $15.1 million in bonds owed on the brand-new building.
According to Fitch, the foundation — the 15-year-old nonprofit that once supported 11 city charter schools — guaranteed the schools’ bond debt. Yet the rating agency expressed doubt that the foundation has the money to make those payments over the long term.
As Governor Andrew Cuomo seeks to expand charter schools across the state, he might pay attention to what is happening in Albany, his backyard.
Diane Ravitch's blog 
Diane, thanks for referencing my Education Next story on Brighter Choice Schools. I am not privy to the organization’s current problems, but it is always sad to see public schools in trouble because it is the students who suffer. When I reported my story, Brighter Choice was providing thousands of Albany children an enriching alternative to a faltering public school system. Thanks, –peter m.
“Public schools” operate with transparency and cannot turn children in their neighborhoods away. The public has input into the school board’s decision making and finances. Brighter Choice took essential funding away from the “faltering public school system” which if fully and equitably funded may have better met the needs of the children they serve. What is the poverty rate in that district and was this an equivalent population attending the charter schools? Were the public schools “faltering” or just starved of essential programs? Who will walk away richer from having created this charter company, and were they serving children or their own bank accounts?
The Albany Public schools were faltering for many years before Brighter Choice arrived (see the link in Diane’s intro) — and probably still are. There was no “starving” them of funds. And Yes, it is a high-poverty district; but the charter schools had the same children. I don’t know why BCC has had its credit rating downgraded, but I can tell you that these schools were serving Albany’s poor children much more effectively than the traditional public schools, and for less money, when I was reporting on them. I interviewed many many parents who were thankful to have their children out of the traditional neighborhood school. And the question of “walk[ing] away richer” is simply a red herring. But the truth of the matter is that teacher and administration union members walk away with a nice salary whether or not their students benefit. So I’m not sure where one goes with the bank account argument.
I dunno, it’s such a mess. On one hand, I’m always happy to see Wall Street eat its own. But on the other hand, considering the role the ratings agencies played in the crash of 2008, I don’t see how they can be taken seriously anyway. I always feel like I need a bath after reading stories like this. Anyway you slice it, it’s the kids, families and teachers who suffer.
“In a country this size, creating 50 or 60 really good schools barely creates a ripple,” explains Carroll. “It has a profound impact, of course, on the children educated in them, but it doesn’t challenge any of the institutional structures.”
So has Mr Carroll (or his foundation) re-examined any of their beliefs about schools since 2009, or are they still marching forth with what sounds like a plan for the whole country?
An experiment is a “procedure carried out with the goal of verifying, refuting, or establishing the validity of a hypothesis”. Was this ever an experiment or is it really a belief system?
I still await one, just one, defender of the “education reform” establishment to explain why this sort of thing is good for students and parents and communities.
After all, we’re talking heavy hitters here. Trend setters of the edupreneurial variety. Purveyors of the magic elixirs of privatization that cure all that ails education and charterite silver bullets that slay the werewolves known as public school “factories of failure” and “dropout factories.”
Silence is not an option.
No excuses.
Or does their silence mean consent?
😎
Why is this sort of thing good for students and parents and communities?
Because markets.
“The Subjunktive case”
If Wall Street calls it “junk”
That surely means “subjunktive”
Cuz, trillions have been sunk
In stuff that was defunctive
No matter what happens to corporate Charters, the reform movement to close public schools and replace them with corporate Charters will not falter unless the courts, state legislatures or the U.S. Congress stops the corporate reformers supported by billionaire oligarchs.
It has become clear that this reform movement has nothing to do with improving the quality of teaching or the education of children. If that was the goal, TFA would never have existed. TFA is another weapon being used by the corporate reformers to destroy the teachers’ unions and get rid of the public schools.
The hidden goal of this reform movement is to get rid of the democratic public schools and turn all of our children over to corporations to teach—why? I can give you about $1 trillion annual reasons why. Our children are not important to the corporate reformers and the billionaire oligarchs own them. The only thing important to people like Cuomo is money and possibly white supremacy.