Private and Charter Schools Receive Approximately $5.7 Billion in PPP Loans, Raising Questions About Equity in Education

Submitted by mellissa on Thu, 08/27/2020 - 11:50

By Mellissa Chang

A new analysis of Paycheck Protection Program (PPP) loans by Good Jobs First points to an imbalance in CARES Act funding between public schools on the one hand and private and charter schools on the other.

GJF’s Covid Stimulus Watch has identified at least 6,600 charter and private schools that received an estimated $5.7 billion in PPP loans, which have been made available to private companies and non-profit organizations but not public entities. This data is now available on Covid Stimulus Watch through the facility ownership search category.

PPP loan disclosures from the Small Business Administration (SBA) were reported in dollar ranges, not exact values. Covid Stimulus Watch uses the midpoint of each range to estimate loan amounts. Data released by the SBA includes NAICS industry codes for each entity; however, early childhood, charter, and private schools all share the same NAICS code. To identify charter and private schools, we compared PPP loan data to school directories from the National Center on Education Statistics.

Our review revealed that approximately 1,200 charter schools and 5,400 private schools received an estimated $1.3 billion and $4.5 billion in PPP loans, respectively—averaging $855,000 per school. In contrast, other parts of the CARES Act allocate only $13.2 billion for all of the 98,158 public schools in the country, or $134,500 per school. In other words, private and charter schools are getting six times more per facility than public schools.

This gap will likely widen, as charter and private schools are also entitled to a portion of federal funding for public education. Additional analysis will be needed to determine the exact size of this gap, but there is clearly a significant disparity in CARES Act funding for different kinds of schools.

Additional Findings

Of the 5,400 private schools identified, 1,764 are nonsectarian and 3,426 have a religious affiliation. Of schools with religious affiliations, Catholic schools received the most money, with 1,715 schools taking home $1.3 billion—only $400 million less than the $1.7 billion given to nonsectarian schools.

Enrollment data for approximately 5,000 of the 6,600 schools was available from the National Center for Education Statistics. We estimate that a total of 2 million students—417,000 in charter and 1.6 million in private—are enrolled in these schools. The average number of students at each school is 387 and the average award amount per student is $3,520. According to the NCES, the average public school size is 528.

In other words, private and charter schools are getting more per facility even though their schools are smaller on average.

Additionally, the Paycheck Protection Program was not the only loan assistance program available to private and charter schools. The Economic Injury Disaster Loan (EIDL) program, which provides loans to cover operating expenses and revenue losses to business affected by the pandemic, was open to private and charter schools. So far, we have identified almost 300 charter and private schools which have “double-dipped” and received both PPP and EIDL loans. EIDL loans received by these schools amount to $46 million.

The $13.2 billion pot of money for public schools mentioned above comes from the Elementary and Secondary Schools Emergency Relief Fund (ESSER).

So far, 36 states have disclosed their ESSER allocations. At this time, we are still processing this data and are unable to determine how much funding charter and private schools received through this ESSER program.

Whatever the final amount, it will further exacerbate funding inequities in the education system.