Parents enrolled their children in a new charter school in North Carolina that offered great promise. But the charter school was deeply entangled with for-profit entities whose first priority was profit, not students. The school never opened. Parents had to scramble to find another school.

Last spring, Dulce Garcia heard about a soon-to-open school that would offer students immersion in both Spanish and Chinese. There was no other in High Point like it, and it didn’t charge tuition. It seemed like a way for Garcia, a restaurant worker, to give her children a long-term advantage. 

She decided to enroll her 6-year-old daughter, Aracely, in Triad International Studies Academy (TISA). In its first year, the school would serve preschool through second grade. She planned to enroll her 9-year-old son, Joel, when the school expanded to higher grades.

Aracely flourished at TISA. Garcia marveled that her daughter was soon counting in both Spanish and Chinese, and credited her swift academic progress and close friendships to TISA’s small class sizes. Aracely’s first-grade class had only 12 students; the entire school had only 45. “I think she does better in that type of environment,” Garcia said.

While the school’s modest enrollment seemed like a benefit to Garcia, it set off alarm bells in Raleigh. Charter schools like TISA—privately run, but publicly funded—must have 80 or more students under North Carolina law. 

Most state funding is awarded on a per-pupil basis, and real estate costs—not covered by a state allocation—can be hefty, making it difficult for even charter schools with more students to remain solvent. 

TISA seemed at risk of buckling under the financial pressure, facing an acute version of the challenges that have begun to slow growth in the once-booming charter school sector. At the same time, its management was pushing the bounds on conflicts of interest.

After learning about TISA’s low enrollment, the state Charter School Review Board summoned school leaders to their October 6 meeting. The board has the responsibility to shut down schools that fail to meet the state minimum, but broad leeway to set terms and make exceptions.

TISA’s board chair, Chaowei Zhu, fielded the state board members’ questions. He largely blamed construction delays. 

The plan to renovate a former church and install modular classrooms on the property had hit one obstacle after another, said Zhu, who is assistant dean for global initiatives at Wake Forest University’s Graduate School of Arts and Sciences. By mid-August, school leaders were on Plan C: putting all the kids in the auditorium until the renovations were finished. Two days before the start of the school year, parents arrived at an open house and found the parking lot a muddy mess. Zhu said that while he was directing traffic that rainy evening, he overheard parents saying that the school wasn’t ready. 

Zhu’s wife, Junlan Li, a veteran educator and TISA’s principal, also told the board that an incident inside the school during the open house did perhaps even more damage. A child with autism hit several other students, she said. The child’s parents had not disclosed the child’s needs, so the school was unprepared. 

TISA had projected 144 students in its first year. Roughly 90 attended the open house, but only about half that showed up on the first day. 

Zhu and Li tried several arguments to persuade the Charter School Review Board to let their school stay open. They pointed out that state law allows the board to grant exemptions from the minimum enrollment if there is a “compelling reason.” In this case, TISA’s leaders said, the reason was the school’s “unique student population”—almost a third of students had a disability or other need for specialized education. 

Zhu described aggressive marketing plans and a commitment from the school’s landlord to defer rent, which would allow them to break even with just 50 students. He requested that the board delay closing the school until next summer even if a waiver was ruled out. “If there’s any way you think we can continue, we’d love to give it a try,” Zhu said. 

Bruce Friend, the charter board’s chair, said he was skeptical that TISA could boost enrollment substantially so far into the school year. “I’m just gonna be honest with you,” said Friend, who is head of school at Pine Springs Preparatory Academy, one of North Carolina’s largest charter schools. “Your track record doesn’t suggest that that’s going to happen.” 

Friend moved to revoke the school’s charter, effective at the end of December. The board, made up largely of people with experience founding or operating charter schools, voted unanimously in support.

Garcia hadn’t considered TISA’s financial viability when she was selecting a school. She chose it for its programming and schedule. Seeing Aracely so happy, she imagined the school a staple of her family’s life for years to come. She didn’t expect to have to find another one just weeks into the school year.

Charting a New Course

North Carolina was among the first states to permit privately run, publicly funded charter schools. In its 1996 authorizing law, the General Assembly laid out its aims: to provide more choice for parents, more educational opportunities for gifted and at-risk students in particular, and new professional opportunities for educators. 

The proposition was more freedom to experiment in exchange for more accountability. Rules on how money could be spent and what lessons could be taught were looser. But if the schools failed to meet student performance standards, they could be shut down. Some level of instability was built into the system.

At first, no more than 100 charter schools were allowed across the state. Legislators removed the cap in 2011 after Republicans gained majorities in both chambers. The number of charter schools doubled over the next decade. Then growth began to slow down. After hitting a peak of 211 in 2023, the number of charter schools fell for the first time ever. But the climb resumed this year. There are now 221 charter schools across the state, including virtual academies.

Even during the height of the boom, schools were regularly closing. Most years, there was at least one; some years, as many as 10. Regulators forced 38 charter schools to close between 1998 and 2024 for reasons that included insufficient enrollment, untenable finances, and poor academic performance. Over the same period, 32 other schools chose to voluntarily give up their charters—three in their first operating year. Another two dozen approved charters never materialized as schools.

While established schools continue to expand, pushing overall charter school enrollment ever higher, new schools are struggling. Every one of the seven that opened in North Carolina this school year came up short of their enrollment projections. Liberty Charter Academy, also in High Point, projected 500 students, but had only 172 enrolled as of the beginning of October. Three other new schools reported October 1 enrollment under 100.

Ashley Logue has noticed new schools facing ever-greater headwinds over the eight years she has worked in the state Office of Charter Schools. In that time, three first-year schools had their charters revoked for failing to meet the state’s minimum enrollment requirement; two were in the past two years….

She also saw other signs of escalating distress: More boards with approved charters were delaying their school’s opening by a year or more or deciding to give up their charter before the school ever opened. New schools were, on average, missing their targets by higher percentages.

National trends have been following a similar trajectory, according to a report published this summer by the National Center for Charter School Accountability that asked, “Has the charter movement reached its saturation point?” 

Logue, who is now the director of the Office of Charter Schools, said the pandemic shifted how many parents thought about school, and in subsequent years alternatives to traditional public schools multiplied. “Post COVID, parents are much more understanding of the options and also more willing to say, ‘OK, this option that my child had—whether it was a district school or something else—is not working. What are my other options?’”

The alternatives include abundant variants of homeschooling, magnet schools run by public school districts, and private schools ranging from tiny church-run operations to opulent college preparatory academies. Since 2023, the General Assembly has made a massive investment in subsidizing private school tuition—families of any income now qualify for Opportunity Scholarships, though not all private schools accept the vouchers. 

Meanwhile, birth rates in many parts of the state are declining, and high housing prices have changed where families with children live. The combined effects have been hard for schools of all stripes to predict. 

The problem is perhaps most acute for novice independent charter school operators, who are, almost by definition, optimistic. By the time their school is about to open, they have been working toward that goal for years, sometimes racking up significant debt in the process. TISA said in its application that it planned to take out a $210,000 loan with a five-year term and a 7% interest rate to fund its planning year.

Real-estate and financial constraints can have a strong influence on the enrollment projections that operators submit to Logue’s office and the Charter School Review Board. Friend, now the board’s chair, said that was his personal experience when he was preparing his application back in 2015.

He was trying to project enrollment two years out in one of the state’s fastest-growing communities, Holly Springs. “The truth of the matter is my projections were largely based on what the size of my facility was going to be, and the size of my facility was going to be largely based on how much money I could secure,” Friend said.

The board of every school that Logue has warned about low enrollment has come before the oversight board promising that they will make their numbers. “I call it unrealistic optimism,” she said. “There’s a lot of things that we’ve seen over the last couple of years that you wouldn’t want to happen to your school.”

In response, the North Carolina Association for Public Charter Schools has begun organizing new training for schools in the year-long, state-mandated planning period that follows a charter award. First-year schools will also be allowed to participate. “Having names on a list and people telling you they’re going to send their kid—that doesn’t mean much these days,” the association’s Executive Director Rhonda Dillingham said. “We’ve got to make sure that the new schools that are opening understand that and do everything in their power to market the school.”

Dillingham’s group also recently received a $53 million federal grant to help charter schools build out career development; science, technology, engineering, and math; artificial intelligence; and career and technical education programming. Some of that funding will go to new schools.

Logue has proposed several changes to the state’s oversight of charter schools to try to prevent closures that leave families scrambling for a new school for their child in the middle of the school year.

 “TISA,” she said, “was a worst-case scenario.”

High Hopes

Pressed for first-year numbers, Zhu said they had almost 100 students registered, but it was hard to know how many would show up. He estimated no-shows at 30 to 40 percent.

TISA’s plans were exuberantly bullish from the start. 

Its application for a charter describes dual-language immersion programs in four different languages by the school’s fifth year in operation. 

The school would start by serving kindergarten through second grade and add one grade per year until it was a full K-8 school. More than 900 students were expected at full enrollment.

The application named three model schools—East Point Academy in Columbia, South Carolina, and East Voyager Academy and Elbert Edwin Waddell High School, which are both in Charlotte. But only the latter offers multiple languages, and it is a magnet school within the public school district, rather than an independent charter.

Above: In mid-November, a for-sale sign stood on the property that housed TISA. Right: Parent Dulce Garcia was sad to see the school close. (Carolyn de Berry for The Assembly)

Mike Lally, the head of school at East Point, said in an interview that the prospect of running a school offering multiple languages was “scary.” “It’s difficult enough with HR and personnel to do Mandarin immersion,” he said. “I couldn’t imagine trying to manage that with multiple languages.” 

The candidate pool for language-immersion teachers is small and would be smaller still if fluency in multiple languages was required, Lally said. On top of that, there is often extra administrative work related to immigration for those teachers.

Renee Mathews, the CEO and principal of East Voyager, was the founding principal of East Point and said the two schools had very different growth trajectories. The South Carolina school grew quickly, she said, because there was little competition at the time. The Charlotte charter school, facing more competition, has grown steadily, but much more slowly. It offers Spanish in addition to Mandarin, but only introductory classes that are limited to middle schoolers.

Li worked at both East Point and East Voyager, but consulted neither Matthews nor Lally as she prepared to open TISA, they said. Neither did Zhu, who was on the committee that helped to open East Voyager. One member of East Voyager’s board of directors was on TISA’s board for a time, but he declined an interview through Mathews.

In their charter application, TISA leaders cited the success of the charter school movement in the state as one reason to think their enrollment projection was sound. “While some may view this as a concern for too much competition, TISA’s case is different,” the application said. “If approved to open, TISA will be the only public school in Greensboro offering multilanguage immersion programs in Chinese, Japanese, French, German, and/or Spanish under the same roof. … TISA’s program is unique, innovative, and difficult to replicate. Therefore, competition should not be a concern in TISA’s case.” They indicated their break-even number was 138.

After school leaders couldn’t find acceptable property in Greensboro, they shifted their sights to High Point. The former church they settled on required a special use permit, which meant school leaders had to plead their case before the city council. 

What city leaders most wanted to know during the March hearing was how many students TISA was expecting. 

“We just want to build a very small school,” Zhu told them. “Because that’s always my dream. At a small school, teachers get to know everybody, give them individualized care, and particularly help them to learn the language.”

High Point’s planning staff recommended that the special use permit restrict the school’s enrollment to 250. TISA was arguing for up to 390 students, with a plan to have students arrive on a staggered basis each day to minimize traffic.

Minutes from a TISA board meeting three days earlier indicate the school had sent out acceptance notices to 76 families. Enrollment wasn’t meeting expectations, Li told the board. She noted that another new charter school, Liberty Charter, was also opening in High Point.

‘Came Out of Nowhere’

The families with children enrolled at TISA learned about the Charter School Review Board’s vote to revoke the school’s charter the following evening, on October 7.

“Please know that our staff and leadership team are fully committed to ensuring a smooth, supportive transition for every student and family in the coming months,” Li, the principal, wrote in the email, which said the school would close at the end of December.

Garcia was shocked. To her, the information “came out of nowhere.”

She had no idea that board members were discussing a shortfall of $58 million in September or that state charter school regulators had advised against TISA’s management structure. 

A deeper look at public records tied to the school might have prompted additional questions about ethics and finances. TISA Board Chair Zhu is also a partner in LinguaVista, the for-profit company that owns the school’s property and holds its management contract. Additionally, he is president of TISA Child Care Center, a for-profit company with a contract to run the on-site preschool. 

TISA said in its 2023 charter application that it “does not foresee any existing relationships that could pose actual or perceived conflicts if the application is approved.” Zhu was identified as the board chair, and Li was identified as the likely principal candidate. It made no mention of the fact that they are married. 

North Carolina law allows charter schools to hire relatives of board members as long as the conflict is disclosed, and TISA’s board meeting minutes indicate that Li and Zhu left the room for certain discussions due to a conflict of interest. 

But the minutes and a financial journal shared with some board members in February also show Zhu had deep involvement in managing the school’s finances—including scheduling $40,000 in payments to Jun-Chao Consulting, a company registered to his wife, for “supporting in planning year” and “writing charter.” 

The board had also experienced high turnover. The only members named in the application that were still involved by late 2024 were Zhu and Hua Qin, who is described in the application as a certified public accountant. Records from the CPA oversight boards in North Carolina and South Carolina list no one by that name. (The Assembly tried to reach a Forsyth County resident by that name, but did not receive a reply.)

It’s not clear from the minutes how seriously the board considered contracting with companies unconnected to Zhu. Neither Li nor Zhu provided copies of full board packets and contracts in response to multiple requests from The Assembly. Li declined an interview; in response to detailed questions, Zhu provided a written statement that said TISA complied with all state disclosure requirements and followed the conflict-of-interest policy its board approved. Other board members either declined to speak with The Assembly or did not respond.

“Without subpoena powers, it is very difficult to figure out what is going on financially” at a charter school, particularly one with a for-profit management company, said Tom Kelley, a law professor at the University of North Carolina at Chapel Hill who has written about charter schools and nonprofit law. While there are federal and state legal doctrines intended to prevent self-dealing, investigations are rare, he said.

The second email Garcia received about TISA’s closure really shocked her. That email, sent about 24 hours after the first, retracted many of Li’s previous assurances that school would continue as normal through the end of the year. 

“Effective immediately,” there would be no more breakfast or lunch service, no transportation, and no before- or after-school care. 

Garcia attended an emergency board meeting the following evening. Parents gathered in the school cafeteria to encourage the board to appeal. 

Lisa Noda, an attorney who drove her children from Davidson County to attend TISA, went first. She told the board that her second-grade daughter, who has dyslexia, now loves to go to school and wants to read. Her younger daughter, who is in the preschool program and advanced academically, is also happy at TISA, Noda said. “Please consider appealing and allow students to finish.”October 15 was students’ last day at TISA. (Carolyn de Berry for The Assembly)

Breanne Kraft said the teachers were so patient as her daughter, who has autism, processed her father leaving the family. “She does not want to leave. It hurts her and it hurts me,” Kraft said. “We both cried.”

Cailey Oates said, “To us, TISA is more than a school, it is a community.”

When it was her turn to speak, Garcia suggested things she could personally do to try to boost enrollment. She could hand out flyers and spread the word among Spanish speakers. 

But Zhu told the parents that he did not see much of a chance to reverse the Charter School Review Board’s decision. “We told them everything, but it did not change their mind,” he said. “I am the saddest person. I sold my house to build the school.” (County records indicate the house listed on the school’s charter application is still owned by Zhu and Li.)

After a half-hour closed session, the board voted unanimously not to appeal.

The following week, the board held another meeting, voting unanimously to relinquish the charter. TISA would not keep operating through December as state regulators allowed; instead, October 15 would be students’ last day.

Left in the Lurch

Amanda Cook, a former public school teacher who served on the High Point City Council, immediately started to coordinate a meeting to help the families left in the lurch. 

“I felt like with the number of kindergarteners that they had, there were a lot of families that had never been part of the school system before, so they hadn’t been through the process,” said Cook, who has since been appointed to the state House to replace Rep. Cecil Brockman. 

On the day TISA closed, Guilford County Schools held an event at one of the district’s two Spanish-immersion schools, Kirkman Park Elementary School, to introduce parents to other local options. 

Teachers and other staff were available to translate, Cook said. The district also brought people to answer questions about transportation, enrollment, exceptional children’s services, and English language support. As of mid-November, 18 former TISA students have enrolled in district schools, a spokesperson for Guilford County Schools said. 

Garcia learned at the open house that she could send Aracely to Northwood Elementary School, where a weekly Chinese class was offered. There was also a spot for her son and room for both children in the afterschool program. She enrolled them the next day, but Garcia was still out of work for the better part of a week.

Aracely Lopez Garcia flourished at TISA, her mother said. She credited her swift academic progress and close friendships to TISA’s small class sizes. (Carolyn de Berry for The Assembly)

Noda lost much more work time getting her daughters resettled. She felt that Davidson County schools did not have the resources to do right by her daughter with autism and dyslexia, so she looked into private options. 

“My older child was out of school for a month where we were trying to find something, and she did trials at different schools that did not accept her because of the needs that she has,” Noda said.

She ultimately enrolled her older daughter at another school in High Point, The Piedmont School, which serves children with attention deficit disorder and dyslexia, and received some state funds toward the private school’s tuition. Her younger daughter now attends a private pre-K program.

Zhu and Li received a bill from the state the same day the board voted to relinquish the charter. TISA had received state funding based on its projected enrollment; charter schools that end up enrolling fewer students have to give a proportional amount of money back. TISA now owes the state $112,789. 

LinguaVista, the for-profit company that owns the school property, is facing legal action for another apparently unpaid bill. In late November, Dobbins Electric Company Inc. filed a claim of lien against the school property, asserting that it’s owed $68,351.86. 

In mid-December, after repeatedly reminding Li that the school is obliged to disclose public records, The Assembly received an email from the address tisabankruptcyperiod@tisanc.org. The email, signed “TISA Board of Trustees,” said the board was “in transition and in the process of retaining bankruptcy counsel.” No public records requests would be fulfilled in the meantime.

Carli Brosseau

carli@theassemblync.com

Carli Brosseau is a K-12 education reporter for The Assembly. She previously worked at The News & Observer, where she was an investigative reporter and a ProPublicaLocal Reporting Network fellow.