Corporate Education Reform

“Corporate education reform” refers to a specific set of policy proposals currently driving education policy at the state and federal level.  These proposals include:
Increased test-based evaluation of students, teachers, and schools of education
Elimination or weakening of tenure and seniority rights
An end to pay for experience or advanced degrees
Closing schools deemed low performing and their replacement by publicly funded, but privately run charters
Replacing governance by local school boards with various forms of mayoral and state takeover or private management
Vouchers and tax credit subsidies for private school tuition
Increases in class size, sometimes tied to the firing of 5-10% of the teaching staff
Implementation of Common Core standards and something called “college and career readiness” as a standard for high school graduation

-Stan Karp
Director of the Secondary Education Reform Project, Education Law Center

  • 1954

    Desegregation of Public Schools

    For the first time, the highest level of government intervened in K-12 schooling when the US Supreme Court ruled that segregated public schools were “inherently unequal” and therefore unconstitutional. As a result, federal authorities imposed court-ordered desegregation on school districts across the country.
  • 1965

    Elementary and Secondary Education Act

    The federal role expanded to include protecting the civil rights of all students by offering financial assistance to public schools with high percentages of low-income students.

  • 1980'S


    There was a shift in the political climate to that of neoliberalism which is an ideology and policy model that emphasizes the value of free market competition. [1]  In other words, a shift to the idea of transferring as much government activity as possible to the private sector, including education.


  • Milton Friedman

    Milton Friedman

    Ronald Reagan’s political advisor and member of Reagan’s Economic Policy Advisory Board in 1981. Friedman championed the idea of taxpayer funded but privately-run schools. Funds in the form of a voucher to pay for what the government considers the minimum adequate education. Parents and guardians would then choose what education services to purchase on the free market. For Friedman the choices included private for-profit schools, private nonprofit schools, religious schools, and “some even” run by the government.

  • 1994

    Charter Schools

    Coinciding with the demand for better test scores and higher standards, in 1994, President Clinton signed the Improving America’s Schools Act which provided federal funds to create publicly funded, privately operated “charter schools.” They would have more autonomy than district (traditional) public and claimed to be more innovative.  The goal was “to increase the number of charter schools nationwide.”

  • 2000

    New Market Tax Credit

    One reason for the proliferation of charter schools was the result of the New Markets Tax Credit (NMTC), established by President Bill Clinton in 2000.  The intent of the law was to serve as an incentive to have Banks and equity funds invest in charter schools in underserved areas. However, these investors can also take advantage of a very generous 39% tax credit which can be combined with other tax breaks without limits and doubles their investments over  a seven-year period.  Another incentive to invest in charter schools was the federally funded EB-5 program.  Foreign nationals were able to obtain a green card for themselves and family members through government-approved investments that create jobs. The only requirement for this “fifth employment-based preference” (EB-5) immigrant visa was to invest at least $5000,000 in a qualified development project which included charter schools.

  • 2001

    No child Left Behind

    George W. Bush advanced both charter schools and vouchers. No Child Left Behind (NCLB) was a law that required states to create academic standards, annually test children in reading and math in grades three through eight (and once in high school) and hold districts and schools accountable for the results. States had to determine which students were proficient, identify schools where an insufficient number of students were proficient, ensure that specified measures were taken with regards to schools that failed to make “adequate yearly progress,” and set targets that ensured 100 percent of children would be proficient in reading and math by 2014.  Schools whose students failed to show progress over two years could face significant sanctions – including state takeovers or being made into private charter schools.

  • 2009

    Race to the Top

    President Barack Obama opposed school vouchers, but was responsible for a competitive grant program called Race to the Top. The rules stipulated that each competing state submit a public school reform plan, taking into account a long list of Department of Education (DOE) policies. States that scored highest on the DOE’s point system would win millions of dollars to implement their plans. DOE criteria included not limiting the growth of charter schools (some states had capped the number). States were also required to give charter schools free use of public facilities or help charters pay for facilities. Public school supporters fiercely opposed the measures because they diverted resources from already stretched-to-the-limit education budgets. But state governments were desperate for money from anywhere; all but four eventually entered the contest. Obama’s Race to the Top gave the entire charter school enterprise a substantial boost.

  • 2019

    Current Administration

    The United States has devoted itself to a comprehensive system of public schools, locally controlled and funded by public resources. But the Secretary of Education, Betsy DeVos seeks to replace our public education system with one in which public funds are used to subsidize whatever “choice” a parent makes for his or her child.  DeVos has pushed to privatize public education by shifting money from Title I—a program that gives additional funds to the country’s poorest school districts—to private-school choice and charter schools, which are often privately managed and not held accountable to taxpayers.

What is school choice?

School choice allows public education funds to follow students to a public school, private school, charter school, home school, virtual school or any other learning environment parents choose for their kids. Discussions of choice can be confusing because “choice” involves so many different options.  However, when discussions of school choice do take place, they typically revolve around the following three main choices: public schools, private schools, and charter schools.  Let’s take a look at how each of them is funded.

Types of school choice?

The reality is that “school choice” particularly in the case of vouchers and charters, redirects the flow of taxpayer dollars from public schools, into unaccountable private hands.  Let’s take a closer look at vouchers, charter schools and how they impact public education

School vouchers are education tax dollars that are diverted from public schools to help subsidize the tuition of private and religious schools.

Charter schools are tuition-free, independent public schools exempt from most of the rules, regulations, and statutes that apply to traditional public schools. Charter schools receive taxpayer money, but are privately run with no local oversight. As a result, charters have greater degree of freedom by districts and states when it comes to staffing, curriculum, instruction, finances etc. 

Charter school laws vary from state to state, but essentially, they are operated under a contract or “charter.”  The charter outlines the details of how the school operates including details regarding how the school will be organized and managed, what the students will be expected to achieve, how student achievement will be measured, how staff will be hired etc.  The charter must then be approved by an “authorizer.

State laws allow various entities to either reject or authorize charter schools.  These include entities such as higher education institutions, state boards of education, nonprofit organizations, independent charter  boards  and  municipal  governments. State laws also determine the scope of power authorizers have in holding charter schools accountable for meeting the requirements outlined in the school’s charter or contract.  Charter schools must have their charter reviewed by their authorizer after a set number of years, the length of the contract varies from state to state, but is typically reviewed every five years at which point the charter is either renewed or revoked.

National Association of Charter Authorizers (NACSA) identifies six types of authorizers

New York state has three types of authorizers: LEA, SEA, HEI.  In 2010, state legislation was amended stating that local school districts, NYC Board of Education and Buffalo Board of Education could no longer approve charters, but are still allowed to oversee and renew the charters for schools the city had authorized under the original law.  A charter school may be authorized by the State University of New York (through its Charter Schools Institute) and New York State’s Education Department’s Board of Regents.  

Charter School Boards
Charter school board members are appointed by the authorizer. Boards vote on decisions that affect the academics, finances, and organization of the charter school. They discuss and vote on matters such as obtaining a new building, renewing a lease on a current facility, hiring, firing, or retaining their School Leader/Executive Director/CEO, approving the annual budget, or deciding whether to expand the school’s program to serve more students.  However, instead of going at it themselves, many charter school governing boards have hired management organizations to run their schools under contract.  These management companies are either not for profit Charter Management Organizations (CMO’s) or for profit Education Management Organizations (EMO’s).

CMO’s and EMO’s run the day-to-day management of a charter school. The governing board and the management organization  enter into a contract that defines each party’s rights and responsibilities. Management companies responsibilities vary from school to school, but their duties may include educational programming, business operations, and staffing. They also decide if/who it wants to contract as vendors for things such as food services and technology support. Since the charter staff is contracted by the management company and not the board, school, or district means that the charter staff are “private” employees and not covered by the Public Employment Relations Act or subject to certain aspects of the Freedom of Information Act (depending on state laws).  It also means if there is a change in management company (employer), the entire staff is laid off and it is up to the new charter management company to re-staff the building.

When a student enrolls in a charter school, his home district sends the charter school most of the per-pupil funding it receives from the state. Money follows the student until he leaves the charter school to return to his public school.  After a certain period of time the money would not follow the student back to the traditional public school.  However, the school still must pay the same fixed expenses: utility, maintenance, transportation, and food services costs, but now without the money that followed the student to the charter school.

Proponents of  “school choice” seek to privatize education in an effort to turn it into a business with a bottom line.  School vouchers and charter schools run by for-profit companies are seen as part of the school privatization movement. These schools are nothing more than an investment opportunity for businessmen and a way to garner campaign contributions by politicians.  These schools have no oversight and are closed almost as quickly as they are opened with no regard to the well-being of the children. The following is a list of issues associated with the privatization/charter school movement.  For a more detailed explanation, please read Network for Public Education’s  NPE-toolkit-intro-and-13-questions.

  • Charters drain money away from traditional public schools.
    As mentioned above, When a student enrolls in a charter school, his home district sends the charter school most of the per-pupil funding it receives from the state. Money follows the student until he leaves the charter school to return to his public school.  After a certain period of time the money would not follow the student back to the traditional public school.  However, the school still must pay the same fixed expenses: utility, maintenance, transportation, and food services costs, but now without the money that followed the student to the charter school.
  • No transparency and no accountability
    Charter schools are funded with taxpayer money, but act like private entities that are not held accountable to the same regulations and laws that traditional public schools are held to.
  • The corruption is widespread within the industry
    As a result of the lack of oversight and accountability, there are several examples of fraud and corruption.
  • Backfilling and attrition
    Charter schools rely on the premise that they outperform traditional public schools as demonstrated on standardized test scores.  As a result, they can engineer their student enrollment by discarding students who they feel might not achieve this standard and then not backfill their seats.
  • Money follows the student
    When a student leaves a public school to enroll in a charter school, the money goes with him.  When a student is kicked out of a charter school and returns to his public school, the money stays with the charter school.


  • Vouchers abandon public schools and drain away critical dollars – Vouchers divert attention, commitment and dollars from public schools to pay private school tuition for a few students, including many who already are in private school.
  • Vouchers impact public accountability – In stark contrast to the strong requirements faced by public school, private voucher schools do not have to meet ESSA and IDEA standards and they are not required to accept all students.
  • Vouchers leave behind many students, including the most vulnerable – Vouchers leave behind many disadvantaged students because private schools may not accept them or do not offer the special services they need.  Students with disabilities and English language learners are underserved in voucher schools.
  • Vouchers often are not able to accommodate special education students – Students with disabilities attending a private school with a voucher would not necessarily receive all the Individualized Education Plan services they would otherwise receive in a public school.  Not all private schools are bound to follow the same inclusion practices and parents are not entitled to the same procedural safeguards as they are under IDEA. A number of parents are reconsidering the placement of their children in private settings and are returning them to public schools.
  • Vouchers do not raise student achievement for all – Research and evaluations have found little or no difference in voucher and public school students’ performance.
    Source: National School Boards Association ( priorities/school-vouchers)

How is it all connected?

Reforming public education has become a very profitable industry and has more to do with making a profit than it does about educating children.

“Well, I think it’s a very stable business, very recession-resistant. It’s a very high-demand product. There are 400,000 kids on waiting lists for charter schools … the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer on this, uh, category, and uh, if you do business with states with solid treasuries. then it’s a very solid business.” 


  • Double their money in seven years
  • New Market Tax Credit, law passed in 2000 allows banks and equity funds receive a 39% tax credit on charter school contributions plus the ability to collect interest on the money they contribute plus they are permitted to combine this tax credit with other tax breaks
woman sitting at desk pointing to her laptop

Real Estate Investors

  • Receive the standard huge tax breaks
  • Plus, well-off real-estate developers garner huge profits by helping new schools get established for a price
  • When real estate developers acquire these charter school properties, they charge charter schools for rent payments, which are not price-capped
foreign currency stack of coins standing on top of bills

Foreign Investors

  • 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
large political house of representatives



Why should you care?

Corporate Reform Formula

The long-term goal is to privatize education, give complete autonomy to management companies rather than local school boards, and make schools accountable solely for their performance outcome measured, more often than not, by results on standardized tests.  It is these same tests that are used to “prove” schools are failing; to scapegoat teachers and kids rather than address the real issues that plague our public schools: inequity and lack of funding. 

“That’s the standard technique of privatization…defund, make sure things don’t work, people get angry, you hand it over to private capital.” 
-Noam Chomsky

Create the fear that public schools are failing
(they are not)

plus sign icon

Manipulate the cut scores of standardized assessments to “prove” schools are failing

equal sign icon

Allow states to take over public schools and close/replace them with charter schools (follow the money)

Media Resources