Scholars Preston C. Green III, Bruce D. Baker, Joseph O. Oluwole, and Julie F. Mead published this article comparing charter schools to subprime mortgages in the University of Richmond Law Review. It appeared in 2016, but it grows more apparent by the day that its warning was prescient. The similarities are striking.

The more authorizers in a state, the less attention is paid to quality. The authorizers have a profit motive to multiply charter schools because they collect a percent of the take. The authors discuss the predatory practices used to lure students to charter schools and the inevitable fraud and embezzlement associated with lack of regulation.

My favorite example of the way that Education Management Organizations profit from charter school rentals:

With respect to fiscal stewardship, charter school boards have the responsibility to ensure that their schools spend market value for the renting of facilities.108 For-profit EMOs have sought to enhance their revenues by charging exorbitant fees for these arrangements.109

For example, the Detroit Free Press reported that the National Heritage Academies (―NHA‖) charged each of its fourteen schools more than $1 million in rent per year.110 The Free Press review of the 2012–13 audits of more than fifty other charter schools run by other for-profit EMOs revealed that only seven charter schools spent more than $500,000 in rent. By contrast, all but one of NHA‘s schools spent more than $500,000 in rent.111 The newspaper also reported that NHA collected $380 million in rent, including nearly $42 million in 2013–14, since the company began running charter schools in 1995.112

The authors may or may not know that National Heritage Academies is owned by J.C. Huizenga, a family friend of the DeVos clan, based in Grand Rapids, affiliated with ALEC and other rightwing groups, and a multimillionaire from his other business interests.

The authors describe how a “bubble” happens, how certain populations are targeted, how they clamor to get in to what appears to be a good deal, then stampede out when the bubble bursts. This may be happening now in urban African American communities. The question that is not addressed is how to restore and rebuild a stable public school system that has been destroyed by predatory charters.

This article is worth your time.