In Chicago, several charter schools are facing financial challenges that have led to closures, mergers, and requests for emergency funding. The issue has affected teachers and students, including Jema Fabara, who lost her job when Acero network’s Cruz campus closed last year and now works at ASPIRA charter network’s alternative high school. Fabara is concerned about the stability of her current school as ASPIRA considers merging schools amid payroll difficulties.
ASPIRA is among multiple charter networks in the city that have struggled financially over the past 18 months. Two other charters recently asked Chicago Public Schools (CPS) for financial assistance shortly after the district provided funds to help EPIC Academy High School complete the school year before its planned closure. Last year, CPS also took the unusual step of absorbing five out of seven Acero schools that were set to close.
The district has identified some struggling charters for financial concerns over several years but continued to renew their contracts. CPS officials report that they have increased fiscal oversight recently, though critics argue more should be done.
A confidential memo sent in October by Alfonso Carmona, then interim chief education officer at CPS, described a widespread “crisis” among charters. According to Carmona, declining enrollment across the city has reduced charter budgets while CPS continues to subsidize its own under-enrolled schools. At the same time, CPS withholds thousands of dollars per student from charters to cover pension and debt service costs. This situation has left charters reliant on uncertain sources such as federal grants and fundraising. The memo projected six charter operators would end this fiscal year with deficits.
Carmona also expressed concern about the precedent set by absorbing Acero campuses rather than allowing them to close: “We are confronting a structural financial problem with the potential collapse of a significant portion of the charter sector, which now looks to the district as its financial backstop,” he wrote.
Charter schools serve about 50,000 students—roughly one-fifth of all CPS students—who are predominantly Black or Latino and from low-income families. For these families, ongoing financial instability has created uncertainty and raised fears about possible midyear school changes.
A working group composed of board members and leaders from both CPS and charters has started meeting to look for solutions despite budget constraints faced by the district.
Charter leaders attribute many of their budget problems to what they describe as chronic underfunding by CPS. State law requires CPS to allocate at least 97% of a calculated per-student tuition charge to charters; this amounts to approximately $19,740 per student for the current school year. However, after accounting for a 3% oversight fee and deductions for pensions and debt service—especially for those in district-owned buildings—the average amount received drops significantly: $14,800 per student in district buildings and $17,600 elsewhere.
CPS officials maintain that state and federal grants supplement these figures and that all schools should share pension and debt expenses according to state law—a position supported by Justin Marlowe from University of Chicago’s Center for Municipal Finance. Still, some charter leaders say grant distribution is inconsistent and subject to restrictive conditions.
Mike Madden, president of Noble charter network said: “These are longstanding decisions that have created a structural deficit for CPS, and the gap should not be closed on the backs of charter students.”
Other pressures on charters include shifts in enrollment-based funding formulas that do not account for higher poverty rates among their students compared with those in district-run schools. Charter enrollment fell 4.5% this fall versus a 1.7% drop at traditional public schools; unlike small district-run schools—which receive extra support—charters often lack similar safety nets.
The Illinois Network of Charter Schools points out disparities such as Noble’s Baker College Prep receiving $15,800 per student compared with Bowen High School’s $25,150—even though both share a building on Chicago’s Far South Side.
Recent changes making it harder to find charter options through GoCPS—the citywide school choice platform—and limits on expanding successful charters have added further pressure.
Carmona noted additional challenges including loss of COVID relief funds, declining philanthropic support for charters, aging facilities costs, and rising labor expenses especially where staff are unionized: “What we’re seeing today is not even close to what we have seen in the past,” he said.
Some stakeholders blame poor management at certain charters rather than funding alone. The Chicago Teachers Union highlighted EPIC Academy’s decision to buy an old church building requiring costly renovations despite falling enrollment as an example of risky spending contributing to closure risks.
While some financially troubled schools like EPIC had previously received positive evaluations from CPS’ scorecard system used in contract renewals others showed signs of overspending or unrealistic budgeting assumptions—for instance ASPIRA was criticized by CPS last year for projecting higher enrollments than achieved.
Passages elementary school and Urban Prep high schools were among those needing cash advances from CPS this winter due partly to cash flow issues; Urban Prep reported taking steps like administrative cuts after facing legal disputes regarding allegations it denied.
Despite these challenges—and signals flagged by financial reviews—the district renewed contracts last May for ASPIRA Passages and Urban Prep while placing them under remediation plans requiring monthly cash flow statements.
Matthew Luskin from Chicago Teachers Union argued more proactive oversight could prevent sudden closures: “CPS can actually make the effort here to police this a little bit and get out ahead of these crises.”
Justin Marlowe characterized current scorecards as minimal measures providing retrospective information; he suggested monthly reporting requirements could offer timelier insight into finances.
According to Carmona recent reforms include using actual prior-year enrollment numbers instead of projections when determining initial payments tightening debt reporting rules requiring longer-term budget forecasts.
Both board members Ellen Rosenfeld and some charter operators see promise in improved collaboration through new working groups focused on early identification interventions such as having advocacy organizations provide watch lists flagging vulnerable campuses.
Fabara emphasized families want involvement in developing solutions before problems escalate: “You’ve already fallen off the boat,” she said “and you’re crying for help as you’re going down.”
