This Report Card for Betsy DeVos' Favorite Education Policy Is Pretty Bad | Mother Jones

This Report Card for Betsy DeVos' Favorite Education Policy Is Pretty Bad | Mother Jones:

This Report Card for Betsy DeVos' Favorite Education Policy Is Pretty Bad

A new study takes a hard look at DC's federally funded voucher program.

Ron Sachs/ZUMA

Students in Washington, DC's federally funded voucher program performed worse academically, particularly on math test scores, after a year of private school, according to a new federal analysis released Thursday.

The study, conducted by the US Department of Education's Institute of Education Sciences, found that students who left public schools as part of the DC Opportunity Scholarship Program performed significantly lower on math scores than those who did not. (They also scored lower in reading, but researchers noted that those results were not statistically significant.) In 2010, when the DOE's research division previously evaluated the voucher program, it found that it had no significant impact on reading and math scores but a significant increase in high school graduation. Notably, Thursday's study found that parents in the voucher program were more likely to feel like their child's school was safe.

US Department of Education Institute of Education Sciences

The analysis comes as President Donald Trump and Education Secretary Betsy DeVos continue to promote the expansion of school choice at the national level. The administration has proposed a $1.4 billion investment toward school choice programs for the coming fiscal year, including $168 million in spending for charter schools and $250 million in school vouchers for families.

While decades of research has shown voucher programs have had little to no effect on student achievement, studies of newer programs in the last two years have mostly revealed worse academic outcomes for participating students:

• A November 2015 study of Indiana's voucher program determined that students who attended private school through the program scored lower on math and reading tests than kids in public school.
• In Louisiana, students who attend private schools through the voucher program showed significant drops in both math and reading in the first two years of the program's operation, according to a February 2016 study by researchers at the Education Research Alliance of New Orleans. The program had no impact on students' non-academic skills.
• Researchers at the Thomas B. Fordham Institute, a conservative think tank, concluded in a July 2016 study of Ohio's voucher program that students who took part in the voucher program fared worse academically than those who attended public schools.

The Opportunity Scholarship Program, created by Congress in 2004, provides tuition vouchers for 1,100 low-income students who transfer from public schools to private ones in the nation's capital. Earlier this year, House Republicans filed This Report Card for Betsy DeVos' Favorite Education Policy Is Pretty Bad | Mother Jones:

Is charter school fraud the next Enron?

Is charter school fraud the next Enron?:

Is charter school fraud the next Enron?

In 2001, Texas-based energy giant Enron shocked the world by declaring bankruptcy. Thousands of employees lost their jobs, and investors lost billions.

As a scholar who studies the legal and policy issues pertaining to school choice, I’ve observed that the same type of fraud that occurred at Enron has been cropping up in the charter school sector. A handful of school officials have been caught using the Enron playbook to divert funding slated for these schools into their own pockets.

As school choice champions like Secretary of Education Betsy DeVos push to make charter schools a larger part of the educational landscape, it’s important to understand the Enron scandal and how charter schools are vulnerable to similar schemes.

Secretary of Education Betsy DeVos, a longtime charter school supporter, successfully fought several attempts to increase charter regulation in her home state of Michigan. Reuters/Joshua Roberts

What is a related-party transaction?

Enron’s downfall was caused largely by something called “related-party transactions.” Understanding this concept is crucial for grasping how charter schools may also be in danger.

Related-party transactions are business arrangements between companies with close associations: It could be between two companies owned or managed by the same group or it could be between one large company and a smaller company that it owns. Although related-party transactions are legal, they can create severe conflicts of interest, allowing those in power to profit from employees, investors and even taxpayers.

This is what happened at Enron. Because Enron wanted to look good to investors, the company created thousands of “special purpose entities” to hide its debt. Because of these off-the-books partnerships, Enron was able to artificially boost its profits, thus tricking investors.

Enron’s Chief Financial Officer Andrew Fastow managed several of these special purpose entities, benefiting from his position of power at the expense of the company’s shareholders. For instance, these companies paid him US$30 million in management fees – far more than his Enron salary.

Fastow also conspired with other Enron employees to pocket another $30 million from one of these entities, and he moved $4.5 million from this scheme into his family foundation.

Enron’s collapse revealed the weaknesses of the gatekeepers – including boards of directors and the Securities and Exchange Commission – that are responsible for protecting the markets. Because of lax accountability and federal deregulation, these watchdogs failed to detect the dangers posed by Fastow’s conflict of interest until it was too late. Congress responded by passing the Sarbanes-Oxley Act, which tightened the requirements for oversight.

Enron employees lost their jobs and billions of dollars in pension benefits. AP Photo/Pat Sullivan

How do related-party transactions occur in charter schools?

Forty-four states and the District of Columbia have legislation that allows for charter schools. Just like public schools, charter schools receive public funding. However, unlike public schools, charter schools are exempt from many laws governing financial transparency.

Without strict regulation, some bad actors have been able to take advantage of charter schools as an opportunity for private investment. In the worst cases, individuals have been able to use related-party Is charter school fraud the next Enron?: