A new analysis from the University of Arkansas called “Still a Good Investment: Charter School Productivity in Nine Cities,” compares the amount spent per pupil for traditional and charter schools in nine cities and then tracks how the different public school models affect students’ earnings potential (based on test outcomes, graduation rates, college enrollment, behavior). This is also called ROI or “Return On Investment.”

Bottom line? “Students who attend public charters earn, on average, $6.25 in average lifetime earnings for every dollar of funding received by their school for their education while traditional public school students (TPS) earn $3.94 in average lifetime earnings, representing a 58 percent charter school advantage in rates of return.” 

One of the starkest comparisons of the TPS-charter effect is Camden, New Jersey. 

The sources for cost per pupil come from each state’s education department, which are adjusted for observable differences in the student populations served by each sector. The student achievement data comes from the Center for Research on Educational Outcomes’ city and national studies, plus the NAEP Data Explorer. Wage data from the Bureau of Labor Statistics. You can find the methodology on pages 8-9 of the report.

Let’s look at Camden.

The analysts first compare the different demographics between TPS and charter sector. (Camden’s renaissance schools, which are district/charter hybrids, are lumped in with regular charters.) Camden has a total of  16,954 students enrolled in public schools, district and charters combined, with 41% of students in TPS and  59% of students in charters. In district schools, the “poverty level” (those eligible for free lunch) is 56.4% and in charters  it’s 90.3% of students. Twelve and a half percent of TPS students are English language learners; in charters, it’s 10.5%. Special education students comprise 17.8% of TPS enrollment; in charters, it’s 13.7%. These differences are taken into account when determining ROI.

And here’s the take-away for New Jerseyans: “In terms of percent difference, the largest charter school ROI advantage in terms of percent is in Camden, where we estimate that the rate of return for charter schooling is $3.71 or 131 percent higher than that of TPS.”

Why is the ROI so much higher in Camden than in other cities studied?

Let’s start here: after adjustments for student population differences, Camden students in TPS are funded at $39,611 per year. In charter schools, the funding per student is $19,900, less than half as much money per pupil. (Also worth noting: the cost per pupil in TPS Camden schools is considerably higher than the other nine cities studied; the closest is New York City at $36,126, D.C. at about $30K, and the others are below $18.5K.)

In all nine cities (with the exception of New Orleans, which is all charter), students’ future earnings potential is higher in charter schools than in district schools: 

From the report:

“We estimate that, for every dollar of funding received by their school for their education, TPS students earn $3.94 in average lifetime earnings while charter school students earn $6.25 in average lifetime earnings, representing a 58 percent charter school advantage in rates of return [We] find that even attending a charter school for half of a student’s K-12 schooling experience increases the ROI by $0.81 per $1 invested (a 21 percent increase in ROI).”

And for those who believe the canard that charter schools “cream off” higher-performing students?

“Because our estimates of productivity are adjusted for observable differences in the student populations served by each sector, we can assume that we do not find these differences in efficiency because TPS disproportionately serve students who need additional resources to succeed.”

Two other noteworthy observations:

• The researchers speculate that the gains among charter school students would be even greater “if charter school funding was equitably matched to TPS funding.”

• Finally, as we hurtle towards that dreaded fiscal cliff when all the federal COVID money runs dry, the analysts recommend that TPS leaders “learn lessons” from charter operators who work with much tighter budgets “without sacrificing academic quality.” 

Camden for the win!