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US charter schools: How are they funded?

How are US charter schools funded

Charter schools, just like the traditional public schools in the US, are tuition-free. Nevertheless, it is imperative to know that charter schools differ from public schools as they are independent of school districts. Therefore, the answer to “How are charter schools funded at the federal and state level?” can be complex. This post highlights the most prominent ways reputable charter schools in Utah and elsewhere in the US are funded, centering on state, federal, facilities, and private sources.

Four funding sources for US charter schools

The main funding sources for charter schools throughout the US are:

1. State funding

The different ways in which charter schools are funded are often dependent on the laws of each state, meaning there are variations in resources between individual states. Moreover, funding may also vary between districts or counties within one state.

Often, charter schools receive their monies based on per-pupil revenue, although the money received for every student does not take into account operation expenses. That is the case because, for the most part, charter schools do not receive revenues in the form of residential tax collected in their districts. Additionally, charter schools do not receive money from states for the acquisition and maintenance of facilities.

2. Federal funding

Specific categories make financially supporting charter schools possible at the federal level. Examples include Special Education monies and Title I. The latter is encompassed in the Elementary and Secondary Education Act, which provides direct funding to the schools at the local levels within states.

Title I makes it possible to fund charter schools with the highest number or percentage of students from low-income families. The funds from the federal government are then used to ensure students meet the academic standards outlined by the respective state.

In addition to Title I, charter schools can also be funded through grants, which can aid with the startup costs for emerging academic institutions and assist the existing ones in different ways. The different ways in which the grants may be of use to charter schools include acquiring and constructing facilities, fixing and maintenance of school facilities, ensuring the availability of technical assistance, and expanding schools.

Nevertheless, money from the federal government is often distributed on a reimbursement basis. What that means is that schools first spend their money and then receive funds from the federal government.

3. Facilities funding

In addition to federal government grants, facility funding in a charter school may be obtained from various sources. In some states, charters may qualify for tax-exempt financing, for example.

Charter schools can also qualify for tax-exempt bonds. They may also receive interest loans at lower rates.

4. Private funding

Apart from federal and state funding, these schools may also obtain funds from private entities. This funding criterion is usually useful because charter schools often fall short of revenues due to declining financial resources from the public sphere.

Private sources of funds can include many things. Some examples are individual donors, private loans, foundation grants, fundraisers, and funding from school board members.

Final word on US charter school funding

Despite the federal and state backing, the monies received are often insufficient to meet every school’s needs. The recent increase in public support for charter schools means legislatures will need to find ways of increasing funding for these schools to ensure their increased efficiency.

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