Bombshell Report: $100 Million in Taxpayer $$ Wasted or Stolen by Deregulated Charter Industry

Diane Ravitch, May 5, 2014

A new report reveals massive waste, fraud, and corruption in the charter industry, where private corporations control public funds with minimal oversight or accountability.



Kyle Serrette:, 202-304-8027
Sabrina Stevens:, 720-295-0238

A new report released today reveals that fraudulent charter operators in 15 states are responsible for losing, misusing or wasting over $100 million in taxpayer money.

“Charter School Vulnerabilities to Waste, Fraud And Abuse,” authored by the Center for Popular Democracy and Integrity in Education, echoes a warning from the U.S. Department of Education’s Office of the Inspector General. The report draws upon news reports, criminal complaints and more to detail how, in just 15 of the 42 states that have charter schools, charter operators have used school funds illegally to buy personal luxuries for themselves, support their other businesses, and more.

The report also includes recommendations for policymakers on how they can address the problem of rampant fraud, waste and abuse in the charter school industry. Both organizations recommend pausing charter expansion until these problems are addressed.

“We expected to find a fair amount of fraud when we began this project, but we did not expect to find over $100 million in taxpayer dollars lost. That’s just in 15 states. And that figure fails to capture the real harm to children. Clearly, we should hit the pause button on charter expansion until there is a better oversight system in place to protect our children and our communities,” said Kyle Serrette, the Director of Education Justice at the Center for Popular Democracy.”

“Our school system exists to serve students and enrich communities,” added Sabrina Stevens, Executive Director of Integrity in Education. “School funding is too scarce as it is; we can hardly afford to waste the resources we do have on people who would prioritize exotic vacations over school supplies or food for children. We also can’t continue to rely on the media or isolated whistleblowers to identify these problems. We need to have rules in place that can systematically weed out incompetent or unscrupulous charter operators before they pose a risk to students and taxpayers.”

“The report can be found at and


School officials raise concerns of new state graduation requirements

By Ginger Dunbar, Daily Local News, 04/24/14

DOWNINGTOWN – During a briefing Thursday concerning the new state Keystone Exam regulations, a panelist of superintendents, state legislators and others shared their concerns, including costs to schools, time away from classrooms and parents’ lack of awareness of the graduation requirement.

The panelist members, from Chester, Montgomery and Delaware counties, focused on the new requirements of all students to pass the Keystone Exams in Algebra I, Biology and Language Arts in order to graduate from high school. This requirement, which was implemented in March, will affect the class of 2017, students who are currently in ninth grade.

The panelist discussed how additional preparation time for students who failed the Keystone Exams will take more class time away from students who need to retest in order to graduate. Students can take the exams an unlimited number of times in order to pass.

West Chester Area School District Superintendent James Scanlon said he doesn’t believe that parents understand how this could affect students. He said students may be pulled out of their elective courses to have more time to prepare for retaking an exam.

Max Kneis, a senior at Henderson High School, said it’s stressful, even scary, for students to get their SAT scores back. He said by tying the Keystone Exams to graduation requirements, it’s “pushing that test anxiety even sooner.”

As an example, he said that he would not have the same opportunity he is seeking next year at the University of Pittsburgh, if he failed the exams. He said freshmen in high school may not understand the seriousness that the exams could affect their graduation.

School District of Haverford Township Superintendent William Keilbaugh showed visuals of how many school days were dedicated to the Keystone exams, from preparation to testing time. In the 2011-12 academic year, the Delaware County district used 45 days for the exams. In 2012-13, he said the school had 106 days, or roughly 24 percent of the school year, used in connection with the exams.

“Is it rational?” he asked repeatedly as he added that “time is instruction.”…

read more at Daily Local News

Tennessee Legislature Rolls Back Test-Based Teacher Evaluation Law

Diane Ravitch, 4/24/14

In a stunning reversal,the Tennessee Legislature overwhelmingly repealed a law to evaluate teachers by test scores, and the law was swiftly signed by Governor Haslam. On a day when Arne Duncan withdrew Washington State’s failure to enact test-based teacher valuation system, this is a remarkable turn of events.

Joey Garrison of The Tennessean reports:

“Gov. Bill Haslam has signed into law a bill that will prevent student growth on tests from being used to revoke or not renew a teacher’s license — undoing a controversial education policy his administration had advanced just last summer.

“The governor’s signature, which came Tuesday, follows the Tennessee General Assembly’s overwhelming approval this month of House Bill 1375 / Senate Bill 2240, sponsored by Republicans Rep. John Forgety and Sen. Jim Tracy, which cleared the House by a unanimous 88-0 vote and the Senate by a 26-6 vote.

“That marked a major repudiation of a policy the Tennessee Board of Education in August adopted — at Education Commissioner Kevin Huffman’s recommendation — that would have linked license renewal and advancement to a teacher’s composite evaluation score as well as data collected from the Tennessee Value-Added Assessment System, which measures the learning gains of students.

“The bill to reject the policy had been pushed chiefly by the Tennessee Education Association, the state’s largest teachers’ organization, which engineered a petition drive to encourage Haslam to sign the legislation despite it passing with large bipartisan support.

“Huge, huge win for teachers,” the TEA wrote on its Twitter page, thanking both bill sponsors as well as Haslam for “treating teachers as professionals.”

“Eyeing a 2015 implementation, the state board in January had agreed to back down from using student learning gains as the sole and overriding reason to revoke a license. Composite evaluation scores, in which 35 percent is influenced by value-added data, were to centerpiece.”


Two interesting points here: one, Duncan has been hailing Tennessee as a demonstration of the “success” of Race to the Top, in which test-based evaluation of teachers is key. What happens now?

Second, state Commissioner Kevin Huffman is so unpopular that anything he supports is likely to be rejected. His enemies hope he doesn’t leave Tennessee because whatever he recommends generates opposition, even among his allies.

Student Debt

from Rebuild the Dream, 3/25/14

Today, Americans hold an all-time record $1.3 trillion in student debt. Sen. Elizabeth Warren has a smart plan to end this crisis and her solution is simple: Let Americans with federal student loans refinance to today’s low rate. If we can refinance a flashy new sports car at today’s low rates, we should be able to do the same for our student loans.

Unlike almost every other type of loan, federal student loans are set in stone even if rates change for the better. That might not constitute a crisis if college cost what it did in the seventies. But with middle class wages flat for decades, the soaring cost of education has become a mammoth debt dilemma dragging down an entire generation.

In short, we are taking money from middle class students and handing it to the worst of the one percent. Sen. Warren’s plan is to make up for lost revenue from student loan refinancing by making sure millionaires do not pay a lower tax rate than their assistants. Will you stand with Sen. Warren and show you her support?

Yes, I will stand with Sen. Elizabeth Warren and demand an end to the student debt crisis.

She is not the first to propose refinancing for federal student loans. Nor did she come up with the idea of the “Buffet Rule,” a minimum tax on millionaires that The Joint Committee on Taxation estimates would raise $47 billion over 10 years, or an average of just under $5 billion per year. President Obama first proposed the tax in 2011, naming it after the acclaimed Warren Buffet, who notes that many millionaires pay a lower tax rate than their assistants.

Sen. Warren’s step forward was combining the two. Suddenly, members of Congress worried about lost revenue no longer have an excuse. And those who oppose fair taxes now have to explain why they care more about hedge fund managers than middle-class families trying to pay for college.

We can save Americans thousands of dollars. Put money back in the pockets of families who invested in education. Create jobs from the middle class out. And do it without adding a dime to the deficit — simply by putting in place a fair tax code and then allowing people to refinance federal student loans.

Even the kid who took out a loan for a sports car instead of going to college can figure out this makes sense. Can Congress?

Want to show your support? Click here to stand with Sen. Warren and demand an end to the student debt crisis.

Thank you for all that you do.

In Solidarity,

Van Jones and The Rebuild The Dream Team

SAT, ACT Sued for Selling Student Data

By dianeravitch, March 24, 2014

A lawsuit was filed against the SAT and ACT for selling confidential data of students to colleges. Some states mandate that all students must take one of these tests, whether they are college bound or not. Students assume that their names and scores will be shared with colleges to which they apply, but it turns out that far more is disclosed about students, and it is sold, not just shared.

It appears that ACT and SAT are in the data-mining business for their own gain. A lawsuit filed this week contends that the College Board, which runs the SAT, and ACT, Inc., sell identifying information about the hundreds of thousands of teenagers who take the exams each year without the students’ consent. The test companies are “masking the sale” of personal details about the students “under the guise of ‘sharing’” the teens’ information with other agencies, the suit says. It says the companies don’t disclose to students that their personal information will be sold for profit. The companies collect data from test-takers, then sell the teenagers’ names and personal details to colleges. The universities use the information to market themselves to potential students. Across the country, more than 1.6 million students in this year’s high school graduating class — including 101,368 in Pennsylvania and 83,489 in New Jersey — took the SAT. Nearly 1.8 million graduating high school students — including 26,171 in Pennsylvania and 24,202 in New Jersey — took the ACT. The lawsuit says the companies collect details about those students — such as their names, home addresses, birth dates, phone numbers and social security numbers — and sell it at a price of 33 cents per student, per buyer, but “at no time disclosed” to test-takers that their information would be sold “to third parties for monetary gain.”

On its website, the College Board tells students it provides information to educational organizations “looking for students like you” but says the students’ scores, Social Security numbers and phone numbers aren’t given to other parties.

Last month, the College Board increased its fees for student information to 37 cents per name; the ACT now charges 38 cents per name.

See dianeravitch for links

Free Higher Education Is a Human Right

Richard Eskow, Campaign for America’s Future, March 19, 2014

Social progress is never a straightforward, linear process. Sometimes society struggles to recognize moral questions that in retrospect should have seemed obvious. Then, in a historical moment, something crystallizes. Slavery, civil rights, women’s rights, marriage equality: each of these moral challenges arose in the national conscience before becoming the subject of a fight for justice (some of which have yet to be won).

I believe the moment will come, perhaps very soon, when we as a society will ask ourselves: How can we deny a higher education to any young person in this country just because she or he can’t afford it?

The numbers show that barriers to higher education are an economic burden for both students and society. They also show that the solution – free higher education for all those who would benefit from it – is a practical goal.

But, in the end, the fundamental argument isn’t economic. It’s moral.

The College Cost Crisis

Consider the situation in which we now find ourselves:

Social mobility in the United States is at or near its lowest point in modern history. A nation which prides itself on the “only in America” myth has fallen far behind other countries in this, the primary measurement of an equal-opportunity society.

In the midst of this class ossification, higher education remains a powerful tool for social mobility….

read more at Campaign for America’s Future

Reed Hastings is wrong: A school board member’s defense

By Matt Haney, San José Mercury News, 03/14/2014 [n.b. see “Charter Schools goal: Get rid of School Boards'” on YouTube for an excerpt from Hastings’ statement]

Earlier this month, in a keynote speech before the California Charter Schools Association, Netflix CEO Reed Hastings called for the end of democratically elected school boards.

As he put it, the “fundamental problem” with school districts is that they “do not get to choose their boards,” leading to poor long-term planning and less stable governance. He then announced a goal to grow charter schools in California from 8 percent to 90 percent of all students, essentially eliminating the role of elected school boards and replacing them with privately appointed charter boards.

Hastings isn’t just doing his best impression of Frank Underwood from the Netflix show “House of Cards.” He is a billionaire former member of the California State Board of Education, and he is part of a powerful national movement to reduce the role of local school boards and rapidly grow corporate school governance.

So it is important to make something crystal clear: School boards are not an anachronistic carry-over from the years of the one-room schoolhouse. The role of school boards is inextricably linked with the very existence and purpose of public schools.

School boards exist because public schools belong to and are directly accountable to the communities they serve. That is what makes them public.

When a perspective is missing from the board, a community can elect someone to represent it. When the curriculum, budget or policies don’t reflect the values or priorities of a community, such as discipline policies that push out black and Latino students, the people can change that.

Bureaucrats or benevolent billionaires alone will never suffice. Without elected school boards, there is no accountability to the community. It doesn’t work perfectly, but that’s our collective challenge as a democracy. As Winston Churchill said, “Democracy is the worst form of government, except for all the others.”

Charter boards, often comprised of the wealthy and connected, are no guarantee of sound long-term planning and governance either. Just as there is no evidence that charter schools outperform district schools, there is no evidence that charter boards are more effective, informed or strategic than elected school boards.

In fact, poor financial management has plagued countless charter boards. Even at their best, they are structured to focus on their financial or organizational interest rather than the public interest. …

read more at San José Mercury News