Feds Release Final Charter School Program Rules: Provisions Softened in Response to Comment
On Friday, July 1, 2022, the U.S. Department of Education (ED) released final rules regarding the federal Charter School Program (CSP). The final rules were modified substantially from draft rules released in March. The final rules attempted to address more than 25,000 comments from the field. These new rules will affect future competitions for State Entity (SE) grants, Charter Developer Grants, and Charter Management Organization (CMO) grants.
The provisions affecting several topics were modified — and generally softened — to address concerns raised by charter supporters and other stakeholders. CACSA did not take a position on the draft rules.
The final rules regarding for-profit Education Management Organizations (EMOs) and their oversight were not modified substantially from the draft rules. The new language clarifies previous policy that EMOs are ineligible for CSP grants. The new language also promotes transparency and adds requirements to identify and address potential conflicts of interest.
The new rules are extensive, and CACSA is analyzing the changes to understand their likely long-term impact on charter-district relations in Colorado. Those wishing to read more about the changes can access several resources from ED, including a fact sheet, as well as a full description of changes and the rationale for each change. The CSP’s director, Anna Hinton, describes the changes in a blog summarizing the Department’s perspective.
Preliminary analysis of the new rules identified the following:
- EMO Ineligibility and Oversight: ED maintained their draft language clarifying that EMOs remain ineligible for grants. The final rule strengthens requirements for the documentation of contracts, conflicts of interest, and oversight of EMOs.
- Charter-District Collaborations: ED softened their requirements for charter-district collaborations and expanded the range of potential collaborations that could qualify. Most importantly, collaborations will be addressed through invitational priorities, rather than absolute or competitive priorities. This means that charter founders and charter schools will not be penalized or competitively disadvantaged if they do not secure a district-charter collaboration. The issues that can be addressed by collaboratives were expanded to include issues like better serving students with disabilities and English learners.
- Community Impact Analyses/Needs Analysis: ED modified its original proposal, which had required that SE and CMO grantees and subgrantees conduct a community impact analysis. In the draft, these analyses focused on whether current public schools were over-enrolled as the most important evidence that a new school would not be negatively impacted by a proposed charter. The final rule changes these to “needs analysis” that may incorporate a variety of evidence that a proposed charter is needed and will be able to enroll enough students to succeed. The new rules are closer to current analysis authorizers often conduct of proposed charters to determine that there is sufficient interest and likely enrollment to make the school viable.
- Supporting Diverse Charter Schools: ED softened requirements around support for diverse charter schools in response to concerns from the field. The final rules clarify that the support of diverse charter schools should not and is not intended to create any obstacles to charter schools serving communities that are racially or ethnically homogenous, schools with programs designed to serve traditionally under-served populations, or other unique schools. ED maintained the requirements to analyze the demographics of proposed schools to examine applicant’s plans and likely ability to attract and serve all students in the community, as well as analysis of whether a proposed school would undermine desegregation efforts.
Grant competitions for the SE and Charter Developer programs were also announced today. These competitions incorporate the changes to the rules announced today. Colorado has a current SE grant and will not be participating in the current competition. Colorado charter founders are not eligible for Developer Grants while the state has a current SE grant. Most of the new regulations will affect future recipients of SE and Developer grants and do not automatically apply to previous grantees, meaning that subgrants that the Colorado Department of Education provides to new and replicating charter schools in Colorado are not necessarily subject to the new rules.