Eye on Education

Charter Schools Part III: Cashing In on Education

Traditional public school districts and charter schools have long been at odds in Ohio, but that strain is most noticeable when it comes to schools run by for-profit corporations.

Ida Lieszkovszky / StateImpact: Ohio

April Nagorsky before Preparatory International, the charter school she used to teach at before it was shut down abruptly.

About six years ago, April Nagorsky was a kindergarten teacher at the International Preparatory charter school on Cleveland’s East Side. Then, one day, she says she came to work and was greeted with a big surprise.

“We all pulled in and parked and thought we were going into work and there was caution tape around the doors,” Nagorsky said, remembering that day. “It was all wrapped up and there were signs on all the entrances telling the parents the school was no longer here. And that was it. We weren’t allowed in; they weren’t allowed in.”

Ohio law says charter schools  — which get about half a billion dollars in state money each year — must be nonprofit. But they can hire for-profit companies to run them. Hasina and Da’ud Abdul Malik Shabazz operated International Preparatory as a business.

And the business did not go well.

Nagorsky says it took her by surprise, but in hindsight, she says there were definitely some tell-tale signs: “I remember obviously the pay checks bouncing, which was huge. I remember the phone call telling me I was $900 in the hole in my account because everything I had sent out had bounced.”

Nagorsky says she’s still not sure what happened. She asked a lawyer friend to see about getting her back pay. Small chance, she learned.  The couple still owes the state one point four million dollars.

“I’m sure they profited a lot more than any of us,” Nagorsky says.

She says this would never have happened in a regular public school, because too many people are watching.

As for charter schools, Nagorsky says she’s done with them. Recently, Nagorsky was laid off (and called back again) but even facing unemployment, she says she would “never consider trying a charter again. Never. I would be too nervous all the time.”

National Association of Charter School Authorizers President Greg Richmond says the problem is not the business model. He says there’s nothing “inherently problematic educationally or otherwise in running a school organized as a for-profit. There’s nothing in that model that says that can’t work or it has to be inappropriate.”

The problem, he says, is that Ohio exercises very little oversight of its more than 300 charter schools.

“What a lot of people thought in the 90’s was that running a school would be easy as long as you removed these regulations that were holding them back,” Richmond says. “And that turned out not to be true.”

He says the problem begins with the lack of oversight of charter-school sponsors. Those are the groups that at least nominally open and oversee the schools. He says in Ohio, “the doors were opened too wide and allowed too many people in who thought that they could do a good job. But it turned out that they couldn’t, and now they’re running dozens of schools. And it’s very hard to close a school, even if it’s not doing well.”

In many of those cases, the schools are run like a business. A bad business. Richmond says they operate largely unchecked until a crisis forces them to shut them down.

Ida Lieszkovszky / StateImpact: Ohio

A white hat sits on the shelf of White Hat Management CEO Tom Barrett's desk. White Hat founder David Brennan is known for wearing such white hats.

The most recognized name in for-profit education in Ohio is White Hat Management. The Akron-based company runs 45 schools in five states, but most of them are in Ohio.

White Hat has been sued by some of its own schools, and critics keep pointing to the poor grades most of the schools get on annual report cards.

White Hat’s president Tom Barrett says people need to stop picking on for-profit operators.

“We’re not greedy money-hungry people,” Barrett says. “We’re in this for the students; we’re in this certainly for the community, and we’re in this for our employees as well.”

White Hat is a privately held company.  It does not have to publicly disclose profits, losses or revenue. Barrett won’t reveal any details, but he says White Hat does not make much, nor are profits its top priority.

White Hat-managed schools received more than 84-million dollars from the state last year. But ten of those schools suing say even they can’t figure out where the money is going.

According to the lawsuit, White Hat gets at least 95 percent of the schools’ funding. It also owns everything from computers to student files.

White Hat hires, fires, buys textbooks and supplies.

School board members say they can’t even track what they are paying White Hat in management fees.

Kurt Minson is the board chairman for two White Hat schools in the Akron area that are involved in the lawsuit. He says taxpayers have a vested interest in this case, “because [the schools] were slated and structured as private organizations. Once the money goes into the black box, there was no scrutiny from the outside even though these were public dollars.”

Minson says that would not have bothered him, if he felt like students in his schools were getting a good education.

He did not.

“We saw a lot of strategies put in play that tried to lessen the cost of educational delivery on a couple of different points, and that really gave us the vision that the number one priority of prosit was in direct competition at times with educational delivery.”

-Kurt Minson, Board Chair of two White Hat schools.

“We saw a lot of strategies put in play that tried to lessen the cost of educational delivery on a couple of different points,” Minson says. “And that really gave us the vision that the number one priority of profit was in direct competition at times with educational delivery.”

Minson says the schools wanted to break away from White Hat, but Ohio law says if a school board has a problem with a management company, that company can fire and replace the school board, not the other way around.

April Hart is the lawyer representing the school boards. She says that law “is the switch around of the employee running the employer and because of that there was really no way out of the management contract.”

Hart says White Hat has yet to comply with a judge’s order in August to open up its books to the school boards.

Ida Lieszkovszky / StateImpact: Ohio

White Hat president Tom Barrett visiting one of his Life Skills schools in Akron.

White Hat President Tom Barrett says “both sides are aggressively working to resolve this amicably and quickly.”

In its court responses, White Hat dismisses most of the claims, saying it complies with everything Ohio law demands.

Barrett also dismisses complaints about his schools’ academic successes.

No Ohio White Hat school earned higher than the equivalent of a C on the state report cards. Most are in academic watch or emergency.

Barrett says that’s because White Hat has taken on a big challenge: his schools, like many other charters, target students who are failing in traditional schools. He says that means many of their sixth grade students come into their schools already several years behind grade level, “but when you are testing on the state test, that sixth grader is required to take the same test as everybody else. Of course we’re going to do bad.”

White Hat’s Life Skills schools are designed for students have dropped out of school entirely.

Students like 19-year-old Dante Mills work individually at computers. A tutor in the room provides support, but there’s no black board and no joint curriculum.

Ida Lieszkovszky / StateImpact: Ohio

Nineteen-year old Dante Mills hopes to graduate from LifeSkills Akron this winter.

Mills sits at a computer with rap blaring into his ear buds. He’s reading about bio-science. When he’s done with the section, he takes a quiz online. If he passes, he can move on to the next question, and if he has any questions he can consult his teacher.

Mills hopes to graduate this winter.

His sister also went to Life Skills Akron. The school’s director, John Stack, says she failed math on the Ohio Graduation Test 13 times before transferring here. She failed again, but after one-on-one tutoring, she passed and graduated last year.

But lawyer April Hart says White Hat’s problem isn’t tough students. She argues it’s a teaching method that relies on computer instruction – a model she says is good for profits but not students.

“If you don’t care at the end of the day what’s going on in the school as long as your enrollment numbers are up, you’re going to have a problem in a for-profit situation,” says Hart.

Hart blames the state for not overseeing these schools closely enough.

“The Ohio Department of Education and the state of Ohio has to put more accountability in place for the operator,” she says. “If they’re going to make money, that is fine. But they have to deliver a product.”

But proponents of the for-profit school operators say the law of the market place argues they are doing a good job. If they weren’t, customers would go elsewhere and they would be out of business.


  • Supermamabear

    There are a lot of nice folks at WH – and to a certain extent they really do believe they’re in it for the students, but they truly don’t have the slightest idea what that actually means, so they revert to “for-profit”, which is what they know. School isn’t a business – and it doesn’t work as one. It just doesn’t.

    • http://americansocietytoday.blogspot.com/ American Society Today

      I agree 100% with you.

    • Anonymous

      It’s really interesting that you say that. I was talking with an employee at a White Hat-managed dropout recovery school the other day and asked him what he liked about his job. His answer: “I like seeing them graduate. That’s the best part of the job.” Which is an answer similar to what you might hear from many educators who work with that student population, White Hat school or otherwise.

  • http://americansocietytoday.blogspot.com/ American Society Today

    Thanks for taking an honest look at charter schools in Ohio. The track record of charter schools in Ohio shows that there is no easy fix for education–and more charter schools with fewer regulations is not the answer. Online computer based learning may be cheaper, but it does not provide a high quality education. Unfortunately, the Director of 21st Century Education for the state of Ohio, Bob Sommers, and the Governor of Ohio do not understand this. 21st Century Skills meaning complex thinking, communicating and collaborating are good–as long as students are also learning the requisite facts necessary to perform these tasks. Computer based learning with software programs such as e2020 do not provide high quality learning experiences. I hope people do not let themselves be misled by the marketing claims of charter school operators and education software providers who have a financial incentive to promote themselves. This is not what is best for our nation’s children. Education in America should be a public good–not a for-profit industry. http://americansocietytoday.blogspot.com/search/label/Charter%20Schools

    • Anonymous

      And when this state digital learning “task force” issues their recommendations to the legislature next year, it’ll be interesting to see their thinking about online education/e-schools/blended learning/etc fits into high-quality education and the rest.

    • http://twitter.com/elgeezr elgeezr

      Shall I assume that only union members are qualified to teach? Or am I wrong about that?

      • No

        Union members aren’t the only ones qualified to teach, but a union is certainly an excellent way for the people who ARE qualified to teach to have some real voice in the way schools are run. That’s one reason charters aren’t as good as regular public schools: since the teachers in charters are almost always non-union, they’re left with no recourse when they’re forced to follow bad teaching strategies by charter operators who don’t know what they’re talking about. The amateurs give the orders, and the experts have to toe the line.

      • http://americansocietytoday.blogspot.com/ American Society Today

        That would be a fallacious assumption to make that only union members are qualified to teach. A person does not have to be a member of a union to be capable of teaching. There certainly are benefits to giving the teachers a voice in the decisions of how a school is operated and how teachers should teach. Teachers are in the classroom every day and obviously have a first-hand perspective on what is actually occurring. If they have a voice in how the school is operated, it is more likely that the administration will get buy-in and for the teachers to accept the decisions. As professionals, teachers should have a say in their profession. Teachers should be evaluated by their administrators and peers based upon their professional practice. These results should not be made public, however, so that no student has to be in a class with a teacher that is officially labeled as “ineffective”—not for the teacher’s sake but for the student’s sake. The evaluations should be used to target professional development, and identify teachers that should not be retained. The teachers and administrators should be given a voice in developing the evaluation system. Politicians who are not career teachers should not force an evaluation system on teachers—not as an issue of fairness but an issue of effectiveness.

  • Neophrates

    well of course these businesses will fail. there’s no incentive to do well if there will always be public money coming in.

  • http://twitter.com/elgeezr elgeezr

    A pro-union anti-charter school hit piece. If Ohio is having problems, rest assurured, they will be fixed. The reputation of Charter schools thruout the U.S. is high, very high. I have every confidence that the people of Ohio will see to it that any broken Charter schools will get fixed.

    • No

      The reputation of charter schools throughout the US is very high indeed. It’s the best reputation money can buy.

      Of course, the actual effectiveness of the model is pretty low. But I can’t fault charters’ marketing. The marketing is great. It’s just the job they do at teaching that’s worse than public schools.

    • Bob Marley2

      According to the story, by law, there is no real oversight by the school board. And the school board is the conduit between “the people of Ohio” and the school. So how are they supposed to see to it that the charters schools get fixed?

    • FC White

      And how long have you been shilling for The Privatizers? You always know when a Privatizer is talking because they won’t mention what the story is about—like here, where it’s about the criminal activity of this vile business pretending to be a “school” that “educates” our children.

      Instead these shills stick to the talking points which is always to castigate the unions, blame the unions, it’s all because of the unions. Vomit.

      In case you didn’t read the article “elgeezr” there WERE NO UNIONS at any of the “schools” managed by White Hat. The crooks were the charter operators. Get it? The people you love so much and insist are doing a good job.

      Well, I guess they ARE doing a “good job” if you mean “job” as in “heist” or “robbery”; for those type of “jobs” they deserve to be sitting in a cell for a very long time.


    I know that charter schools is one of the best ways to steal public monies,with the assumption that they are going to work for the purpose of education. But reality is different.Charter schools were created with a mission: rob the most money they can, using education as an umbrella. Our children suffer because they don’t interact with teacher(s), they don’t have the presence of a teacher to ask questions and receive answers. I can go on and on on on , but just remember your elementary or high school teacher about the meaning of the word profit or go to any dictionary and find the definitions for bussiness and profit. The best for our children is the REGULAR PUBLIC EDUCATION.

    • j20

      Actually, in the Life Skills Center referenced above there are three highly qualified, licensed teachers in every classroom to assist the students. It generally works out to about a 6:1 student-teacher ratio. It amazes me how people feel the need to comment on something they are so completely ignorant about. The students (notice I didn’t say children because many of them are 18-22 years old) would not be attending any school if not for the alternatives charter schools provide. Those are facts.

  • Anonymous

    as usual, blame the students for continued academic failure. charter schools for profit are just like the regular failing school, in it for the money, that’s all. so what else is “knew”?

  • Goldgoose

    Charter schools are simply a tool of the John Birch Society and others who want to eliminate Public Schools and privatize education. Charter schools provide nothing that is superior to Public Schools and are detrimental to Public School taking tax money from them and disrupting Public School demographics. Public Schools must be democratic and treat all students equally and be unbiased; charter schools were established to operate differently, to appeal to parents, and defy the democratic requirements of Public Schools.

  • Algustus

    In Oregon the charter school lobby really wanted to keep the unions out of the charter schools, so they wrote the law in a way that allows the school to use 50% licensed teachers, and 50% unlicensed. The data is pretty clear. The licensed teachers in public schools, even though overcrowded and underfunded, consistently outperform the charter schools on standardized tests. So the real question doesn’t seem to be union vs non union as much as it is licensed teacher vs unlicensed teacher. Of course as a licensed teacher I personally wouldn’t work in in a charter school, I can make more money working as a teller in a bank and it’s a much easier job. I’m just saying, if you don’t pay for good teachers, you don’t have good teachers…

    • kpr

      true. I moved from NY to Ohio and while my certification transfer to Ohio I am working temporarily in a charter and it is BAD. I can’t believe how low the salary is and how the schools don’t even have textbooks, lab materials etc but those in certain administrative positions make LOTS of money…and to settle the cost of living issue from NY and Ohio, Dublin City schools and Hilliard and other areas around Columbus pay almost equivalent to NY salaries….so sad

  • http://twitter.com/Quackers48 Linda Myers

    People really need to rethink the whole charter school issue. Poor academic outcomes financed with public monies? I read a study done in Ohio this spring showing that the public is paying 2.5 X MORE per student for a charter school than a public school. It would be far wiser to pour scarce resources into improving public education than enriching businesses such as White Hat.

    • Anonymous

      Do you know which study that was?

      Looking at Ohio Department of Education data comparing all charter schools in Ohio’s Big 8 urban districts to all traditional public schools in the same districts, we found that the academic results are similar, but charter schools cost about $3,500 less per student.

  • http://twitter.com/FroggyFrog4 Froggy Frog

    Really! Biology taught using a computer or otherwise online material or course work. As the principle means. A traditional laboratory science — now all online. A rigorous science that applies all the principles of mathematics, chemistry, physics for the understanding of living things. Really!

    This can stop right now. I present to you — myself. Someone who has achieved a BS and MS in the field of Biology.

    Up till now, it was my lack of a teaching certificate that would not allow me to teach in America. My home land. Foiled by bureaucracy.

    Now, I see, there is more to it. I am too expensive. My cost too high. A computer/robot chosen instead. Preferred over a real human.

    And then, as a nation, we rage that our young lack mathematics and science fundamentals to be successful. To be competitive in this global market.

  • Peter Boyer

    Richmond and Barrett are a couple more skunks wanting to lay their hands on the “pot of gold” that you and I have contributed to foster an educated population. They and their activities are one more manifestation of the lie that “government” is bad and can’t do anything right. How many of you can read this and graduated from a not-for-profit “public school”?

  • for profit sucks

    For profit schools are such a joke. Like any for profit organization, they try to maximize profits. In the case of schools, that means paying their employees less (and hiring non-union employees) and cutting costs so that the big wigs at the executive level can live in luxury. How this can be good for a student at one of these schools is beyond me.

    We are seeing for-profit healthcare screw Americans and now schools? I want my America back, home of the public school where everyone chips in a little and all are treated equally.

  • Papaherb64

    I am a teacher who has worked in the public, charter and private school environments in Florida

    I say with no reservation the best place for both students and teachers is in the public school

    The unregulated environment of the charter and private schools shortchanges the students and teachers alike–often to absurd (if not criminal) degrees

    Public schools are accountable on many levels, and offer those students with greatest need the services and support due them by law–this is NOT SO in the charter and private institutions

    To be sure, public schools have their issues, but the virtual privatization of education is definitely NOT the answer

    True reform should be teacher-centered–they are the front-line folk who truly understand the needs, deficits and assets of today’s schools

    Listen to the teachers, INVEST in the true infrastructure of America: the human capital and potential of our students

    • Dave Baldwin

      I’m also in Florida, and graduated from a private (parochial) school a few decades ago. My son now goes to public school, after spending several years in private schools. I understand what you’re saying about the private schools, and saw some of that at the schools my son attended. However, that was not my experience growing up, and I dare say it wouldn’t be our experience now if he attended the same schools I attended. However, those same schools are by no means affordable (don’t ask how my parents managed, or why), and there were other problems… snobbish students, etc.

  • Disgusted

    White Hat wrote the Ohio charter school law. Of course they are not accountable to anyone. Of course no one knows where the money goes. Of course they do no better, and usually worse, on state tests and still keep their doors open. Of course they spread money around Columbus like water. Ohio students and taxpayers have been had.

  • FC White

    This…story is incredible. This company—defying court orders to open their books. Taking $84 million from the taxpayers of Ohio and REFUSING to let anyone look at their books, letting no one know what they’re using the money for. This is vile. This is criminal. This is outrageous beyond description!

    What is going on with John Kasich and all of this. Are you asleep at the wheel, John, or are you in cahoots, directly or indirectly, with these crooks called…wait for it, “White Hat” Management.

    Lord, have mercy. How did we get to this place where criminals like these creeps are supposedly the “good school alternatives” and public school teachers and principals are the bad guys?

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