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Controversial charter school loan process finalized by state board of ed
08/05/2015

 

SchoolClosed-2_jpg_800x1000_q100.jpgThe State Board of Education met Wednesday at Indiana University in Bloomington for its third meeting since the appointment of new members. A topic of particular concern on the board’s agenda for ISTA was the issue of Indiana’s new charter school loan program – a $50 million loan program to charter schools that was included in the state budget at the end of the session with no debate.

 

The state board was charged by the legislature to administer the charter school loan program. Members approved the application process at today’s meeting.

 

The loan program grants funding to charter schools at the low interest rate of 1 percent, compared to 4-5 percent from the Common School Fund for community-based public schools. Superintendent Ritz noted the inequity in the interest rates between charter schools and community-based public schools.

 

Forty-three of Indiana’s seventy-nine charter schools have a debt total of about $120 million. ISTA raised concerns over whether the debt would ever be repaid. In 2013 the legislature forgave $90 million in charter school loans.  Both Speaker of the House Brian Bosma and Governor Pence did not deny the possibility that these new taxpayer-funded loans would be forgiven by a future general assembly if they had their way—an implication that reportedly concerned Senator Luke Kenley, chair of Senate appropriations.  Sen. Kenley cautioned about charter schools’ already-burgeoning debt and their likely inability to ever retire the debt they have already amassed.

 

Furthermore, ISTA reminded state board members of the lackluster performance of charters. Nearly six in ten charters received D or F grades while just one in ten of Indiana’s community-based public schools struggle. Despite their disappointing record, Gov. Pence continues to push for their expansion. Just last month, the governor reemphasized his bias towards charter school expansion regardless of their performance when he reportedly told participants at a charter school conference that he will “expand opportunities for charter schools — so help me God.”

 

Indiana now has three separate publicly funded school systems leveraging taxpayer funding: charters (including virtual charters which incredibly receive 90% foundation funding), voucher-receiving schools and our community-based public schools. The funding stream to community-led public schools has been diluted with the addition of these corporate and private takers and comes at a cost to the overwhelming majority of Indiana’s 1 million public school students.

 

ISTA opposes the preferential treatment provided to charter organizers that has been espoused by the Governor and a majority in the legislature via the loan program, especially when the long-term data we have—their actual record of performance—belies such favoritism either as education policy or as a solid taxpayer investment.