Public schools promise a place for every child with services that meet each student’s academic needs with each year building upon the one before it. By contrast, charter schools, grounded in marketplace churn which promises to sort out the successful from the less effective charter schools, have come to represent educational instability as schools open and close—sometimes suddenly without warning in the middle of the school year. Children and their families need a stable education, but parents wooed by lavish and sometimes misleading advertising, cannot locate enough accurate information about the quality of the programs, the financial stability, and the operation of the school.

Investigating the rate of charter school closures, the Network for Public Education (NPE) has just updated its 2020, Broken Promises Report, documenting what was then an overall 50 percent failure rate among charter schools. At that time, NPE reported that within 15 years, half of all charter schools shut down. These schools either received funding but never opened or shut down due to fraud and mismanagement, financial troubles, or inadequate academics.

NPE’s new report, Doomed to Fail, confirms that things have not changed: “The instability in the sector we found in our first report still exists… more than one in four charter schools close by the five-year mark. By year 10, the failure rate jumps to nearly four in 10; five years later, almost 50 percent have closed. We now have five cohorts (Every year’s batch of new charter schools constitutes a cohort.) at the 20-year mark with an average failure rate of 55 percent.”

Eight states post charter school closure rates above 45 percent: Arizona, Florida, Georgia, Iowa, Kansas, Ohio, Virginia and Wisconsin. In Arizona, charter school “closures have displaced more than 80,000 (students) since 1998.”  “Ohio, where for-profit operators run 50 percent of all charter schools, has displaced more than 56,000 students as its schools opened and shut, with the number of closed charter schools nearly matching the number of charter schools presently open.”

In a school marketplace, some schools are expected to close when consumers are dissatisfied. Instability is said to be a feature of improving overall quality, despite that we all realize students need stability as the foundation of their education.

Why do charter schools fail? The new report documents five reasons.

• Low enrollment is the most common, shutting down 46.8 percent of the schools that have closed. Perhaps the decline reflects the declining birth rate in the United States, or maybe there is competition with other charters that are opening. Here is how it often works:  The new school projects an enrollment, sets up programming for the number of students it expects, but then qualifies for state per-pupil funding only for the specific number of students who enroll—which may not rise to the projected enrollment number and is inadequate to pay  the staff the school has hired.   Or perhaps an enrollment collapse happens when unsatisfied parents send their children back to the public schools.
• Fraud and mismanagement has shut down 21.6 percent of the schools that have closed.  Perhaps the school’s authorizer or sponsor discovers fraud, theft or other illegal behavior like exaggerating the number of students enrolled—thereby defrauding the state.
• Unspecified financial problems, including overspending on facilities or poor financial planning has shut down 10.1 percent of the schools that have closed.
• Academic problems have shut down 13.7 percent of the schools that have closed.  Perhaps the authorizer pulls the charter because the school is not fulfilling its academic goals.
• Other unspecified causes have shut down 7.9 percent of the schools that have closed.  Perhaps there are too few certified staff or a dispute with the for-profit operator.

The new report describes abrupt closures as the most disruptive: “Forty percent of the stories we found on charter closures during the 2022-2023 and 2023-2024 school years indicated that the notice and physical closing happened during the same school year or over the summer… Only 60 percent of charter closures were phased, that is announced in advance during the school year, with the closure occurring the following school year.” Most displaced public school students return to the public schools, but that often happens after the school year has started and staffing and service levels like class size have been set. Enrollment at competing charter schools is usually unavailable: “Only four states require charter schools to take new students once the school year begins.” If a charter high school shuts down mid-spring, seniors may be unable complete their diplomas.

The Network for Public Education concludes its new report with suggestions for future policy, culminating with the recommendation that Congress should end the federal Charter Schools Program, which began during the neoliberal Bill Clinton administration which supported public-private partnerships including school choice via charter schools:

“The federal Charter School Program… began in 1994 to kickstart the creation of charter schools… It began as a simple grant program to the states funded by Congress and administered by the U.S. Department of Education. As the charter lobby grew, it pressured Congress to expand the program to six different funding streams, which spend nearly half a billion dollars a year. Because applications are not fact-checked nor properly vetted, this program has led to enormous waste, including a billion dollars… given to schools that never opened or that closed… By inserting itself into the process, the federal government has enabled the closures and churn we describe in this report.”