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Why Do Hedge Funds Investors Love Charter Schools?

State Education Board Wants to Open Eight New Charter Schools

EDUCATION AGENDA - HOW COMMITTED IS the Connecticut State Board of Education to Making ALL of CT's Public Schools the BEST Schools Possible?  The State Board of Education is asking the state for $11 million to fund eight new charter schools to open over the next two school years.  Currently there are 21 state approved and funded charters operating in CT.  These do not include private charters.

Some Cold Facts: The state is facing a $1.4 billion deficit for the fiscal year that begins 7/1/14.  (Read: Jacqueline Rabe Thomas | November 7, 2014, CT Mirror)

  • There are still 1, 285 new seats that are not yet funded, and need to be phased in at three new charters that opened in 2014. 
  • Of course, parents should have the best choices possible, but why are we setting up a two-tier public school system? 
  • Who is responsible for seeing to it that CT's public schools operate optimally?
  • What will become of the hundreds of public schools (some of which are already strapped for 21st Century resources)? Who will ensure that they serve students more effectively?

Allan B. Taylor, chairman of the 13-member state panel, said expanding school choice for students makes sense.  Mr. Taylor might be missing the forest because he is too focused on the trees.

Charter Schools proponents point to the student waiting list for charters.  Of course, there is a waiting list.  Charters are being sold as the ideal alternatives to public schools and they are free.  So parents believe their children are getting a private school education at no cost to themselves.  We understand that; every parent wants a superb education for his/her child. A larger question might be - Why do Hedge Funds Investors Love Charter Schools? We refer you to an article in the Washington Post dated June 4, 2014.  The link is at the end of this blog.  There are many other such articles and information buried in financial reports. We also understand that investors are looking for good returns, but at what costs and to whom? That is the part of the discussion charter proponents are not willing to have, or even to put on the table of information for discussion at any point.

Let's be open, transparent, and equitable.  As educators, our larger concerns are for all students. We want to see excellent public schools throughout CT.  Our poorest and most vulnerable students need to attend excellent schools (as do all of CT's children).  We want schools that will give them the best and most positive foundation for life ahead.

"The state gives charter schools $11,000 for each student they enroll." That is an enormous incentive to create demand.  Charter schools cherry pick the least costly students to educate.

“I am sort of outraged that they approved additional charters. Did they also vote on a resolution to fully fund our public schools? No, I don’t think so,” Sen. Beth Bye, D-West Hartford, told the Mirror in April."

We are pleased to know that someone in Hartford is looking out for the state's number one responsibility in education - adequately funding our traditional public schools.

It was most interesting that commissioner Pryor announced in August that if governor Malloy won re-election he would be leaving.  Does that mean if Foley won he would have stayed?  Quite interesting! Mr. Pryor is doing all he can to lay a solid foundation for more charters in the state.  At what costs and to whom? Where are the advocates for those students who will never get into a charter? Where are the advocates for the students that charters dismiss because their performance brings down the charters' standard scores?

Read more about what is going on-- at the State Board of Education --in the CT Mirror.

In June 2014 the Washington Post ran an interesting article titled:

Why hedge funds love charter schools - an interesting article indeed.

One of the features of corporate school reform is the interest that Wall Street has shown in supporting charter schools. Why?  No doubt hedge fund managers would say they want to support education and help young people have educational choices. But here’s another part of the answer, written by Alan Singer,  a social studies educator in the Department of Teaching, Literacy and Leadership at Hofstra University in Long Island, New York, and the editor of Social Science Docket (a joint publication of the New York and New Jersey Councils for Social Studies). He taught at a number of secondary schools in New York City, including Franklin K. Lane High School and Edward R. Murrow High School. He is also the author of several books.  This appeared on his Huffington Post blog.

By Alan Singer

Obscure laws can have a very big impact on social policy, including obscure changes in the United States federal tax code. The 2001 Consolidated Appropriations Act, passed by Congress and signed into law by President  Clinton, included provisions from the Community Renewal Tax Relief Act of 2000. The law provided tax incentives for seven years to businesses that locate and hire residents in economically depressed urban and rural areas. The tax credits were reauthorized for 2008-2009, 2010-2011, and 2012-2013.

As a result of this change to the tax code, banks and equity funds that invest in charter schools in underserved areas can take advantage of a very generous tax credit. They are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend out. According to one analyst, the credit allows them to double the money they invested in seven years. Another interesting side note is that foreign investors who put a minimum of $500,000 in charter school companies are eligible to purchase immigration visas for themselves and family members under a federal program called EB-5.

The tax credit may also explain why Facebook CEO Mark Zuckerberg partnered with the former mayor of Newark, New Jersey, to promote charter schools; donated a half a million dollars worth of stock to organizations that distribute charter school funding; and opened his own foundation, Start-up: Education, to build new charter schools.

OneWorld Progressive Institute, Inc., is a small group of committed volunteers who produce community information and education television programs on health literacy, education and civic engagement.  We also find good information and post informative blogs about issues we believe shine light and are beneficial to many in our communities.  Learn more about us at our web site:  and visit our web education section at:

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