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Hedge Funds Are Big Fans Of Charter Schools

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Flickr user Runs With Scissors
In the battle between legislators and teachers' unions over federal Race to the Top funding, hedge funds' executives are becoming powerful proponents of charter school reform. A new proposal for federal school funding would require the Assembly to pass legislation that would raise the cap on charter schools, and many managers have contributed millions in funds to lobby for the bill. “A lot of hedge fund and finance people in New York had decided state politics was too dirty and focused on their philanthropy.” said Eagle Capital Management partner Boykin Curry, “I think there’s an awakening now that we can be a force in Albany, but we’ve got to play a tougher game than before.”

Curry, along with managers from firms like Anchorage Capital Partners and Greenlight Capital, attended a breakfast with possible gubernatorial candidate Andrew Cuomo last month for a Democrats for Education Reform meeting, pledging the money to pay for ads and canvassers to urge voters to support the reform. Charter schools have typically been opposed by teachers unions, who say the publicly-run but privately-owned schools drain money from public schools. They also don't generally hire unionized teachers.

United Federation of Teachers leader Michael Mulgrew is wary of hedge fund execs, saying, "They seem to be willing to spend anything, which always leads me to suspect motive." But the same could be said of teachers unions' motives, which Tilson Mutual Funds founder Whitney Tilson says are “To protect their own self-interest, often at the expense of children.” The state has until June 1st to apply for the second round of Race to the Top federal funding, and could be granted up to $700 million if successful.

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Comments [rss]

  • uhwhatreally

    does the author know how unions work? you can't "hire unionized teachers." you can. however, let your staff unionize.

  • WestVillageVintage

    schadenfreudian...beat me to it. Sweden is a country with social service supports in place for students needing it. We need to focus the public discussion regarding education around what the needs of struggling students are and how we can meet them. Charters - more smoke and mirrors from our billionaire mayor and his "free market" hedge fund buddies.

  • laisla

    But the charter model is working better than traditional public schools. The numbers show that. Parental preference shows that. Why not assess why and apply those findings to PS? Oh, because the union and the city do not care about education and logic and efficiency. They have their own agendas.

  • ddhboy

    I honestly don't see how privatization will fix anything. If anything, it will just exacerbate the problem since corporations will have to cut funding left and right to translate state funding into a profit, plus if the measure of their success is standardized testing, then private entities would train their students specifically on how to past those tests, rather than any real lessons. Yes, this happens now in public school, but I think that it will be at a much higher extent in a private system with public needs.

    I think that people unreasonably think that private schools as the exists now are just better because the government isn't running it. That isn't the case, there are private schools of varying quality all over the place, and the reason why parents spend such large amounts of money to send their kids to elite institutions is because the schools don't have to abide by the same rigidity as the public schools, and instead focus their efforts on critical thinking schools.

  • BDS=(Boycott.Divest.Sanction)

    +1

    privatizing schools is all about getting govt money into private hands. Not for efficiency or because its better for the kids, but because its a LOTA MONEY and you can't get at it if the schools are city agencies.

    Turn em into private businesses though and lordy god bless the investor who can open a few of them schools. guaranteed cash flow right from the govt, tax breaks, no unions, no rules. and unlike a real business if you mess up the govt isnt going to let you fail.

    I loathe the teachers unions as much as anyone, but rest assured what we're creating with charter schools will be far worse.



    "Under the New Markets program, a bank or private equity firm that lends money to a nonprofit to build a charter school can receive a 39% federal tax credit over seven years.

    The credit can even be piggybacked on other tax breaks for historic preservation or job creation.

    By combining the various credits with the interest from the loan itself, a lender can almost double his investment over the seven-year period.

    No wonder JPMorgan Chase announced this week it was creating a new $325 million pool to invest in charter schools and take advantage of the New Markets Tax Credit."

  • timThompson

    Here's where it's necessary for someone to point out that the plan imitates the one in Sweden, and it's worked quite well over there.

    The fact of the matter is that we already spend far more per head than nearly any other country (last I checked, only Luxembourg spent more). And we have dismal results. Throwing more money at the public school system is not the solution.

  • BDS=(Boycott.Divest.Sanction)

    I'm all for comparisions to what other countries do, but lets add some other ideas to the mix.

    you say Americans have dismal results. by what measure?

    math and science test scores?

    Sweeden democraphically is stable. They dont have millions of ESL immigrants to contend with. How does the US compare if you take them out of the equation? What happens if you just compare 3rd generation americans?

    still below?

    then lets also consider that in sweeden/denmark the state will support its citizens. they have a society where you are guarenteed a home, food, healthcare and education. I know of people in Denmark who have been recieving free schooling into their 30s! Schooling at all levels is free. Imagine that? wow.

    Compare that to America, where right after high school, its sink or swim! Math, science and abstract ideas are all well and good but that aint going to put a roof over your head or impress anyone in country that glorifies $$

    I'd say thats the reason americans dont score well on math/science tests. Its not important for americans to be good at math/science. The way our society is setup, Americans need job skills. They dont have the luxury to study skills that they cant directly apply to getting a job.

  • laisla

    It's because we are still operating within an industrial revolution educational framework. In 2010, in a flat, globalized world. Nothing has been updated. People are sick of the stagnation. People want that to change.

    Charter schools are a result of that. And it's no shocker that parents flock towards them and kids excel.

  • schadenfreudian mensch

    Just because it works in Sweden hardly means it'll work here given the cultural and racial differences. Not only that but they have a vast array of social programs in their society to support and work in conjunction with their education system. Ours lack those amenities for fear it's the socialist agenda to infiltrate our society.

  • Brooklyn
  • dr zippy

    Why not spend those millions on improving the public schools?

  • isla

    Unions prevent that from happening.

    All the wile, public schools continue to decline, and charter schools continue to close the achievement gap and have record number of applicants.

  • FelixtheCat & Christine Quinn'

    charter schools didn;t close any gaps. just look at the recent nation wide scores. of course these charter schools pass this kids because they want their bonuses. Bloomberg/klein/Maddoff use the same scheme to create performance that isn't real.

  • laisla

    You are wrong. You offer no supporting evidence. So yeah, no.

  • isla

    *while

  • FelixtheCat & Christine Quinn'
  • FelixtheCat & Christine Quinn'
  • schadenfreudian mensch

    Because they know what a lost cause that is and Hedge Fund is all about making money not throwing money into a bottomless pit.

  • FelixtheCat & Christine Quinn'

    ugh, do you know how many hedge funds invested in madoff?

  • starrygordon

    Hedge funds are about taking money away from people who actually create wealth and giving it to gamblers and con men. However, their interest in the public schools is probably more driven by their wealth than their means of getting it. As the distribution of wealth in the United States becomes more and more lopsided, the rich are beginning to see the vision of a totally class-based, quasi-feudal social order in which their power is absolute. Part of this power must be control of the public schools, in which properly subservient lower-caste types can be trained, surveilled and disciplined.

    Why middle- and working-class people put up with this is beyond me. I guess the majority are sycophants, if not entirely delusional.

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