ESEA: Charter Schools Program

ESEA: Charter Schools Program

February 29, 2024
ESEA: Charter Schools Program
Charter schools are public schools of choice that are created
students with disabilities, English learners, and racial/ethnic
in accordance with state laws and are publicly funded and
groups).
tuition-free. They are operated according to the terms of
Multiple competitive grant programs comprise the CSP.
charters or contracts granted by a charter authorizer (e.g.,
Each is discussed briefly below.
local educational agency [LEA], state-level authority,
institution of higher education). The terms of charters
Charter School Grants to State Entities
typically provide charter school operators with increased
Section 4303 authorizes competitive grants to state entities
autonomy over the operation of schools, often including
(e.g., state educational agencies [SEAs], state charter school
exemptions from, or flexibility in the application of, many
boards, governors). State entities must use at least 90% of
of the state or local regulations otherwise applicable to
the funds received to award subgrants to eligible applicants
public schools, in exchange for increased accountability.
to enable them to open and prepare for the operation of a
Students must apply to a charter school to gain admission.
new charter school or replicate or expand an existing high-
Charter schools often use lotteries to select new students if
quality charter school. An eligible applicant is a developer,
they have more applicants than available slots.
which is defined as an individual or group of individuals
The first charter school opened its doors in Minnesota in
(e.g., teachers, school staff, parents, nonprofit organization)
1992. Currently, 45 states and the District of Columbia
in the local community in which the charter school project
have charter school laws. (The states without charter school
will be implemented, that has applied to a public charter
laws are Montana, Nebraska, North Dakota, South Dakota,
authorizer to operate a charter school and has “provided
and Vermont.) As of the 2021-2022 school year, 7,847
adequate and timely notice to that authority.” State entities
charter schools served 3.67 million students.
must also use at least 7% of the funds to provide technical
assistance to eligible applicants and authorized public
While all laws authorizing charter schools are state laws,
chartering agencies. They may not use more than 3% of the
the first federal charter school program was enacted in 1994
funds for administrative costs.
as part of the reauthorization of the Elementary and
Secondary Education Act (ESEA) by the Improving
Subgrants to eligible applicants shall be awarded for a
America’s Schools Act (IASA; P.L. 103-382). This In
period of not more than five years, of which an eligible
Focus provides an overview of the Charter Schools
applicant may use up to 18 months for planning and
Program (CSP) currently authorized by the ESEA.
program design. Eligible applicants may also use funds to
prepare teachers and other school staff through professional
ESEA Charter Schools Program
development and to hire and compensate staff during the
The CSP is authorized by Title IV-C of the ESEA. Purposes
planning period; acquire supplies, training, equipment, and
of the program include improving the U.S. education
educational materials; carry out renovations to comply with
system and education opportunities by supporting
applicable statutes and regulations and conduct minor
innovation; providing financial assistance for the planning,
facilities repairs; cover one-time, start-up costs associated
design, and initial implementation of charter schools;
with providing student transportation; carry out community
increasing the number of high-quality charter schools;
engagement activities; and provide other activities related
encouraging states to provide charter schools facilities
to opening a charter school or replicating or expanding a
financing; and strengthening the charter school authorizing
high-quality charter school.
process. The CSP supports charter schools that serve early
childhood, elementary, and secondary school students by
Developer Grants
providing funding for the startup of new charter schools and
As part of National Activities authorized in Section
the replication and expansion of high-quality charter
4305(a)(2), charter school developers in states that do not
schools, assisting charter schools in accessing credit to
have a current CSP grant to a state entity may apply directly
acquire and renovate facilities, and carrying out national
to the Secretary of Education (the Secretary) for a
activities (e.g., dissemination of best practices).
competitive grant to open a new charter school or replicate
or expand a high-quality charter school. If a grant is
For the purposes of the CSP, a “high-quality” charter school
awarded, it must be used by the grant recipient in the same
is one that shows evidence of strong academic results; has
manner that funds are used by eligible applicants receiving
no “significant” issues in the areas of student safety,
a subgrant from their state.
financial and operational management, or statutory or
regulatory compliance; and has demonstrated success in
Charter School Replication and Expansion of High-
“significantly increasing” student academic achievement
Quality Charter Schools Grants
for all students served by the charter school and subgroups
These grants (referred to as Replication and Expansion
of students (i.e., economically disadvantaged students,
grants), authorized under National Activities in Section
https://crsreports.congress.gov

link to page 2 link to page 2 link to page 2 link to page 2 ESEA: Charter Schools Program
4305(b), provide grants to charter management
federal share of the per-pupil facilities aid program
organizations (CMOs; also referred to as the “eligible
decreases from 90% in the first year of the grant to 20% by
entity”) to replicate or expand one or more high-quality
the fifth year of the grant. The grants are designed to
charter schools. A CMO is a nonprofit organization that
provide an incentive for states to share in the costs of
operates or manages a network of charter schools connected
funding charter school facilities. Only SEAs that have
by centralized support, operations, and oversight. Grants
enacted a state law authorizing per-pupil annual facilities
awarded to CMOs generally have the same terms and
aid for charter schools may apply.
conditions as grants awarded to state entities under the CSP
grants to state entities program.
Grants for Other National Activities
Under National Activities in Section 4305(a)(3), the
Credit Enhancement (CE) Grants
Secretary may award dissemination and evaluation grants.
Under this program, authorized by Section 4304, grants are
Dissemination grants are used to disseminate best practices
made to public or private entities (or a combination of the
and provide technical assistance to state entities in awarding
two) for the development of credit enhancement initiatives
subgrants under Section 4303 and eligible entities and states
to assist charter schools in acquiring, constructing, or
receiving Credit Enhancement and Facilities Incentive
renovating facilities. The Secretary is required to award not
Grants, respectively, under Section 4304. Evaluation grants
less than three grants on a competitive basis to eligible
may be awarded by the Secretary to evaluate the impact of
entities. An eligible entity is required to deposit funds
the CSP, including its effect on student achievement.
received into a reserve account. These funds may be used to
guarantee, insure, and reinsure bonds, notes, evidences of
Appropriations
debt, and interests therein; guarantee and insure leases of
While current CSP statutory language specifies certain
personal and real property; facilitate financing by
percentages of the total appropriation that should be
identifying lending sources and encouraging private lending
allocated to each of the aforementioned programs, Congress
to, or for the benefit of, charter schools; and facilitate the
has annually included provisions in the Department of
issuance of bonds by charter schools or other public entities
Education (ED) Appropriations Act to modify these
for the benefit of charter schools.
requirements. For example, while ESEA provisions state
that the Replication and Expansion grants should receive
Charter School Facilities Incentive Grants (FIG)
not more than 18% of the total appropriation, the FY2022
This program, also referred to as the Per-Pupil Facilities
ED Appropriations Act specified that $140 million must be
Grant Program, is authorized by Section 4304(k). It is a
used for this purpose. Without this stipulation, $79.2
competitive grant program that provides funds to states to
million would have been provided for these grants. Table 1
establish or enhance and administer per-pupil facilities
provides appropriations for each of the CSP programs for
allowances to help charter schools obtain facilities. The
FY2017 through FY2023.
Table 1. Appropriations for the ESEA Charter Schools Program
(dol ars in mil ions)
Program
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022
FY2023a
Grants to State Entities
$162.5
$197.8
$216.6
$214.1
$220.8
$215.3
NA
Developer Grants
$3.6
$17.9
$5.8
$10.9
$5.9
$9.5
NA
Replication and Expansion Grants
$97.9
$119.9
$135.0
$140.0
$140.0
$139.8
NA
Credit Enhancement
$56.3
$39.9
$48.8
$55.0
$55.2
$57.7
NA
Facilities Incentive Grants
$10.0
$10.0
$6.0
$5.0
$4.7
$2.3
NA
National Activities
$11.3
$14.0
$15.0
$15.0
$13.3
$15.0
NA
Peer review of applications
$0.6
$0.5
$0.6
$0.1
$0.0b
$0.4
NA
Total
$342.2
$400.0
$427.9c
$440.0
$440.0
$440.0
$440.0
Source: Table prepared by CRS based on data available from the U.S. Department of Education, Budget Service, Justifications of
Appropriations Estimates to Congress, various years.
Notes: Details may not add to totals due to rounding. In addition, for two fiscal years the details available from ED do not add exactly to the
total. For FY2020, the details exceed the total by $137,000. For FY2022, the details are less than the total by $47,000.
a. FY2023 appropriations were not enacted until March 15, 2022. The budget justifications containing the relevant information were released
prior to this date and did not reflect statutory provisions regarding how the funds should be used across the grant programs for FY2023.
b. $36,000 was provided for this purpose.
c. ED reprogrammed $12,141,000 from the Charter Schools Program and provided it to the Magnet Schools Assistance Program and
Statewide Family Engagement Centers. Prior to the reprogramming, appropriations for the Charter Schools Program were $440,000,000.

Rebecca R. Skinner, Specialist in Education Policy
Isobel Sorenson, Research Assistant

IF12601
https://crsreports.congress.gov

ESEA: Charter Schools Program

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF12601 · VERSION 1 · NEW