Stop scapegoating online charter schools

Ben DeGrow, Mackinac Center for Public Policy

Some northern Michigan superintendents are upset at how federal COVID-19 dollars have been spread around, but the object of their anger is misplaced.

A recent headline in the Traverse City Record-Eagle expressed concern that “pandemic relief dollars went to for-profit cyber schools.” Cyber schools are charter public schools that provide most or all of their instruction online. Many of these schools contract with education management companies for things like curriculum and support with technology and administration.

Cyber schools received $61.9 million in COVID-19 relief, or just over 1% of Michigan’s $6.1 billion total share. Last year, online charter schools educated over 19,000 pupils, nearly 1.4% of the state’s public school enrollment. On a per-student basis, cyber schools actually brought in a smaller share than expected.

Yet some local district leaders are not pleased. Kingsley Superintendent Keith Smith told the Record-Eagle: “That’s been a problem with school funding all along. We treat students as students and the online programs get the same amount of per-pupil funding as traditional, public brick-and-mortar schools.”

The local education leader’s critique carries some weight. Each of the districts featured in the story — Kingsley, Suttons Bay and Traverse City — is receiving substantially less than the average district in COVID-19 relief. And all three districts offered students the option of full-time, in-person instruction last year. The combination fits with a broader trend: districts that operated fully remotely took in much more of the extra federal money.

Yet on average, cyber schools, which were already accustomed to providing full-time online instruction, brought in less COVID-19 relief per student ($3,191) than did conventional districts ($3,815).

The superintendent’s complaint about treating “students as students” ultimately misses the mark. While COVID-19 relief dollars tend to favor schools that serve more low-income students, the distribution formula still produced wildly uneven results based on other factors. Still, the two cyber schools highlighted in the story, Michigan Great Lakes Virtual Academy and Michigan Virtual Charter Academy, do in fact enroll many more economically disadvantaged pupils than the three featured northern Michigan districts.

But it’s also important to put the extra COVID-19 aid in the context of all the other money schools collect. In 2019-20, conventional districts brought in $13,365 per student. Cyber schools’ per-pupil revenues were 33% less, or $8,954.
Even comparing a relatively low-funded district like Kingsley with Michigan Virtual, one of the highest-funded cyber schools, comes down significantly in the district’s favor.

Following the pandemic’s onset, thousands of students left conventional districts with remote instruction programs that weren’t serving them well. Many switched to lower-funded online charters. In response, state lawmakers agreed to protect most of the revenue for districts that lost enrollment. They created a one-year formula that guaranteed funding for 75% of the previous year’s student count. Cyber schools and districts that welcomed more students almost lost out on most of the new dollars that came with them.

Funding formulas approved by Congress determined nearly all of the $61.9 million in relief that Michigan’s cyber schools received. Yet even if superintendents across the state could somehow have claimed those dollars for themselves, it would have added very little to district budgets and only worked to make their overall funding advantage slightly larger.

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Ben DeGrow is the Mackinac Center’s director of education policy.