A new 128-page report has been published, titled Charter Schools: A US Market Outlook. The research report provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report offers an aerial view of the Charter Schools industry in the US, identifies major short to medium term market challenges, and growth drivers. The report also offers a recapitulation of recent mergers, acquisitions, and corporate developments. Below, is an overview of this new report. Enjoy....
The proportion of students attending charter schools is on the rise. Over 30% of public school students attend charter schools in the four urban districts of Washington DC, Kansas City, New Orleans, and Detroit in the US. Following a marginal setback during the recession, which was instigated by reduced funding, the charter school market bounced back in 2009 with government support and revival in financing options. Growth in enrollment is expected to increase in the following years, given the increasing importance given by the Obama administration to charter schools.
The market share of charter schools in the US has been growing at a steady pace over the past few years. Charter schools are a solution for extreme bureaucratic environment as well as stringent regulations within waning public schools. Despite the existence of certain challenges, charter schools are finding ways to expand without compromising on autonomy and results. Presently, public charter schools operate in 41 states and the District of Columbia in the US. These schools are emerging as strong competitors to traditional schools as an increasing number of students are seeking entry into them in order to make use of the free and high class education provided by them. Charter Schools, over the years, has exhibited improved academic achievement among disadvantaged students, and this has increased their popularity in communities suffering from low quality public school education. Donations from philanthropists, and the increasing importance given to these schools by certain local governments are few factors that would fuel growth of charter schools in the near future.
The slowdown in the economy, as well as tightened credit that resulted from the sub-prime mortgage crisis, affected all private sources that financed the charter school facilities. In addition, the reluctance of investors to provide finances to low rated credits prevented the access of charter schools to the tax exempt bond market. The finance issuance to charter schools plunged by around 35% in 2008, as compared to the year 2007. Several commercial lenders curtailed the community development lending activities, and further tightened the underwriting criteria. Meanwhile, most of the non-profit organizations tightened loan origination to charter schools and several other program areas. However, in the year 2009, the state of the private financing sources revived to a certain extent, and financing options are expected to open for providing for charter schools through the near future.
The American Recovery and Reinvestment Act of 2009, invested a considerable amount on improving local and state education systems. The 'Race to the Top' Fund, in particular, provided US$7.75 billion in two phases, as competitive grant for states. Charter schools were given high priority in the Race to the Top, featuring 40 (8%) out of the 500 points available in the race. The number of Charter schools among all public schools in the US increased from 2.0% in academic year 1999-2000 to over 5.0% in 2010-11. Rising enrollment in charter schools is leading to a decline in the share of enrollments in other district schools. However, around 11 states across the US were in favor of traditional schools, and did not allow the establishment of new charter schools in the beginning of 2011, while few others placed a cap on the number of charter schools.
Although there has been a massive protest among the teachers' unions, certain politicians and others towards the virtual charter school system, the sector is set to grow in the near future. Major growth drivers for the sector include public funding, positive results from studies that indicate high level of satisfaction among the parents, under-performance of public schools, and requirement of lesser capital costs. The virtual charters or the cyber charters are a part of the evolving home school segment, operating entirely through online curriculum. Nearly 220 thousand students enrolled into cyber charter schools in the US in the year 2010. Moreover, the enrollment into these schools is increasing at a rapid rate of over 40% per year.
