How Charter Schools Work

Funding Issues

Since charter schools don't charge tuition, they must find other ways to receive funding. State laws determine exactly how charter schools are funded. They typically receive a portion of the state's education aid money for each student who attends the school. This money would usually go to the public school system, but instead it's diverted to the charter school. This is the source of a great deal of contention between people who are pro-public schools and those who are pro-charter schools. Public schools complain that this diversion of money undermines the public school systems. Charter schools complain that, under most funding systems, they receive only a percentage of the actual amount per student that the public schools receive from the state, an average of 61 percent in the U.S. [source: Center for Education Reform].

Further complicating the issue is the fact that charter schools have to fend for themselves when it comes to purchasing, building and maintaining the physical property of the school itself. Public schools can undertake large capital improvement projects through tax-payer funded bonds. Charter schools can attempt this type of funding, but it's difficult and often leaves the charter school with a higher interest rate than a public school would receive. As a result, charter schools turn to alternative means of funding. Donations from private individuals and corporations boost funding levels at some charter schools by 20 percent or more [source: Education and the Public Interest Center].


The bottom line when it comes to charter school funding is that the funding equation is not simple. Charter schools draw funding from a variety of sources and have to do a lot of work to bring up the amount they have to spend per pupil.

Up next, we'll take a closer at what makes a charter school different from a conventional public school.