Sponsors (18)
The bill strengthens protection of federal education funds and legal clarity for students (including those with disabilities) by restricting for‑profit control of charter schools, at the cost of disruption, compliance and transition costs for schools, vendors, contractors, and state/local agencies during implementation.
Students and taxpayers are less likely to see federal ESEA and IDEA dollars diverted to for‑profit management, because charter operators must be nonprofit or school‑run, strengthening public stewardship of education funds.
State and local agencies and charter operators get clearer, aligned definitions (ESEA/IDEA) and clarified 'nonprofit' status, reducing legal ambiguity and supporting more consistent enforcement of funding eligibility.
Students with disabilities in charter schools gain explicit coverage and clearer IDEA eligibility/rights through harmonized definitions, improving clarity about services and protections.
Charter schools that rely on for‑profit managers risk losing access to federal ESEA/IDEA funds or being forced to restructure quickly if they cannot meet the nonprofit/school‑run requirement.
For‑profit education management companies and small vendors will face lost contracts and revenue as schools shift away from contracted management, reducing business opportunities.
Charter schools that transition away from external managers may experience short‑term disruption and transition costs affecting staffing, curriculum, budgeting, and day‑to‑day operations.
Based on analysis of 5 sections of legislative text.
Conditions receipt of ESEA and IDEA federal funds on charter schools not outsourcing core school operation to for‑profit entities that extract profit; allows only limited noncore contracts.
Official title: To amend the Elementary and Secondary Education Act of 1965 and the Individuals with Disabilities Education Act to ensure no funds made available under such Acts may be awarded to a charter school or charter management organization that enters into a contract with a for-profit entity for operating, overseeing, or managing the charter school, and for other purposes.
Introduced April 30, 2026 by Rosa L. Delauro · Last progress April 30, 2026
Bars charter schools from receiving federal ESEA or IDEA funds if they enter contracts that outsource core school operation to for‑profit entities that operate, manage, or extract a portion of school revenue as profit. It narrows permissible third‑party contracts to limited noncore services and classroom supplies, adopts a single cross‑referenced definition of “charter school” between ESEA and IDEA, and phases the rule in three years after enactment for new or renewed contracts.