The Register Citizen (Torrington, CT)
Charter schools receive millions in loans
WASHINGTON — As the coronavirus reshapes education, over half of Connecticut’s 22 charter schools received Paycheck Protection Program loans this spring and summer, collecting a total of at least $12.5 million to $16.5 million in federal support unavailable to traditional public schools, a review of Small Business Administration data and school board minutes shows.
The popular forgivable loans proved a source of division among charter school administrators, some of whom thought it was improper for the schools to apply for the money, while others said it was irresponsible not to.
Charter schools in Connecticut are public schools, making them eligible for state and federal dollars, including emergency coronavirus education grants, but their status as non-profits or corporations has also awarded them access to the PPP small business loan program. It’s a valuable influx as schools face new costs to educate students during a pandemic.
Bruce Ravage, founder and executive director of Park City Prep in Bridgeport, applied for
a PPP loan in July, after learning more about the program and realizing he would be “crazy” not to, he said. The school recently was approved for a loan of $441,000, he said.
“We’re a business that serves a very, very needy population of students and I want to be sure that I have the resources available to provide whatever it is going to take,” Ravage said. “There are corporations that have a lot more money than us that applied for this.”
Tim Dutton, director of Operations at the Bridge Academy in Bridgeport, said his school chose not to apply for a loan because it did not lose revenue or lay off employees during the pandemic, and they knew they would receive federal emergency funding.
“The decision on the Paycheck Protection Program was really just the ethical one. I didn’t think it was about bailing out schools,” Dutton said. “PPP would not be appropriate as it would look like ‘double dipping.’”
On May 13, the school board of Great Oaks Charter School in Bridgeport voted against applying for a PPP loan, believing the school was likely ineligible because it was still receiving a steady stream of state and federal funding, school board minutes show. Just over a month later, the school was approved for a PPP loan of $350,000 to $1 million, SBA data shows.
Nationally, more than 1300 charter schools and their nonprofit or for-profit management companies secured between $925 million and $2.2 billion through the PPP, as of early as of early July when SBA published a database of loan recipients, according to the advocacy group Network for Public Education.
The SBA database only provides a range of the amount of loans, not a precise number. Recipients of loans under $150,000 were not disclosed by the SBA, meaning more schools may have received the dollars.
State funding for public schools did not stop during the pandemic and the federal government approved more emergency relief. The
CARES Act passed by Congress in March included $13 billion in emergency funding for K-12 schools, including charters, $111 million of which was earmarked for schools in Connecticut. Congress is now debating another coronavirus relief package that is expected to contain at least $100 billion in new education dollars.
When asked about PPP loans for charter schools, House Education and Labor chairman Rep. Bobby Scott, D-Va., said his priority is simply securing funding for public schools, adding he does not want to “draw red lines all over the place.”
A member of the committee and former 2016 National Teacher of the Year, Rep. Jahana Hayes, D-5, said however she wants to “push for effective guardrails that prevent charter school waste, fraud and mismanagement.”
“Far too often, malicious actors in the charter school industry siphon much needed funds away from public education and from students in need,” Hayes said in a statement. “Public charter schools accessing both pots of relief funds amounts to double dipping and feeds into the skepticism and criticism that so many have surrounding charter schools. Applying for funds both as a school and a nonprofit drains resources from the public schools and communities that need it most, undermines student’s ability to learn, and threatens the very promise of equal education.”
Clare Crawford, senior policy adviser at the national nonprofit research group In the Public Interest, said PPP loans were intended for small businesses and non-profits that were unable to make payroll and would be forced to furlough and lay-off employees, although questions have been raised about businesses across industries that received the loans and may not have needed them.
“Early in the program in particular, lots of small businesses in particular really struggled to access they loans,” Crawford said. “Mom and pop businesses all over the country were trying to access this loan program to keep their employees on and stay afloat and frankly a very well-networked, politically positioned [charter school] industry was tapping into this same source of funds early on.”
The Connecticut Charter Schools Association encouraged the state’s charters to apply for PPP loans, said Ruben Felipe, executive director of the Association. He said it was “completely preposterous” that charter schools should not apply.
Connecticut’s charter schools educate just under 11,000 students a year, over 80 percent of whom are minorities and 70 percent come from low-income families, Felipe said.
“It’s a completely politically driven argument,” Felipe said. “I think it would be wholly irresponsible for these schools to not take advantage of a legal opportunity to apply for these funds. I think the basis of the criticism is really paternalistically prejudiced.”
Charter schools in Connecticut receive less per pupil funding than traditional public schools from the state, Felipe said.
Applying for a PPP loan would not impact charter schools’ future per pupil state grant amount, said Peter Yazbak, a spokesman for the Connecticut Department of Education.
Charter schools are eligible for federal public school money, but they don’t get the same local funding that traditional public schools do. As non-profits, charter schools also supported by donations from businesses and individuals.
Some charter schools are part of large networks, while others are individual community schools.
KIPP, a non-profit network of 256 public charter schools which educates 100,000 students across the country, has received at least 21 PPP loans for its schools and regional organizations, totaling $23.9 million to $62.4 million, SBA data shows.
The Kipp Foundation has also received billions from foundations run by billionaires over the years, according to its website. The total compensation for its chief executive officer was $498,893 in fiscal year 2018, Kipp’s tax filing shows.
A much smaller charter network, Achievement First, which operates schools in Connecticut, Rhode Island and New York, received $11.7 to $17.7 million in PPP loan money through at least 6 loans to its school systems and foundation, SBA data shows.
School board minutes show in New Haven, Achievement Firstowned Amistad Academy’s elementary, middle and high school received a loan in April of $2.7 million, 2.5 times the average monthly payroll for its 211 employees. Achievement First’s Elm City College Prep’s middle and elementary got a PPP loan for $1.24 million, school board minutes show. Achievement First schools in Bridgeport and Hartford received loans of $1.4 million and $2.36 million, respectively, school board minutes indicate.
“We applied for and received PPP loans because we are very concerned about the availability of both public and private funding for our schools,” said Achievement
First President Richard Buery Jr. “In Connecticut specifically, public charter schools are significantly underfunded compared to district schools. While we are eligible for PPP loans, we are not eligible for thousands of per-pupil dollars provided to other Connecticut public schools.”
“There are many unknowns right now with regard to future federal stimulus money—and we made this decision in recognition that there may be federal funding available for municipalities that we won’t be able to access,” he added. “We will do everything we can to secure the resources we need to deliver the excellent public school education our students are entitled to.”
Public, private and charter schools are facing increased costs during to the pandemic as they invest in new technology, increased cleaning, personal protective equipment, rearranging classrooms and other items to educate their students in-person or through distance learning. Many are looking at their budgets with concern as they plan to reopen in August or September.
Monica Maccera-Filppu, executive director of Common Ground High School, a charter school in New Haven, said the school has made significant investments in laptops for every student and creating new outdoor learning spaces with handicap ramps and commercial tents for shade. More frequent cleaning costs the school an additional $500 per week, she said.
The school will get $69,000 in emergency coronavirus federal grant money, and New Haven Ecology Project, which comprises the school, an urban farm, a summer camp and other education programs received a $808,000 PPP loan.
“Double dipping is a term that we as school administrators are really familiar with and have to be really careful about,” MacceraFilppu said. “We have enough costs that are personnel costs, as well as additional COVID-related costs, that are not being paid for by perpupil [federal funding] that it would have been irresponsible of us not to apply.”