CHARTER Act

Key Points

• This bill would ban federal education funding for charter schools that hire for-profit companies to run their operations. It targets arrangements where private companies manage the school, control hiring, set budgets, or develop curriculum while extracting a share of school revenue as profit.
• Charter schools could still hire for-profit companies for specific support services like food, transportation, building maintenance, payroll, textbooks, and other ancillary supplies. The ban only covers core management and operational control of the school itself.
• Congress states that every student in a publicly funded school deserves to have education dollars spent on their learning rather than diverted as profit for private operators. The bill is framed as protecting both students and taxpayers from what sponsors call profit extraction.
• If enacted, the changes would take effect three years after the bill is signed into law. The rules would only apply to contracts that are newly created, renewed, or extended after the date of enactment, giving existing arrangements time to wind down.
• The bill amends the definitions in both the Elementary and Secondary Education Act and the Individuals with Disabilities Education Act, covering the two major streams of federal K-12 funding. This ensures the for-profit management ban applies broadly to charter schools receiving federal dollars.