U.S. Department of Education (ED)

The following titles, parts, and sections of the Code of Federal Regulations (CFR) should be rescinded to restore fairness and equity in the allocation of federal education funds and ensure that resources are directed primarily to public schools serving disadvantaged communities: 34 CFR Part 75 – Direct Grant Programs Sections: §§ 75.225, 75.250, 75.260 Rescission: Rescind regulatory changes that provide preferences for charter and for-profit schools under federal grant programs. Remove restrictions that prioritize non-educational factors, such as matching fund requirements, over educational outcomes. Restore equitable funding priorities to ensure that federal resources are directed towards public schools that serve disadvantaged students. 34 CFR Part 76 – State-Administered Programs Rescission: Rescind provisions related to charter school program pass-through funding, particularly those that allow charter schools to access federal funds without proper oversight. Reinstate stricter criteria for charter schools to demonstrate academic success and community benefit before receiving federal funding. Statutory Discretion Under ESEA/ESSA Rescission: Clarify eligibility under the Elementary and Secondary Education Act (ESEA) and Every Student Succeeds Act (ESSA) to restrict the ability of charter and for-profit schools to access federal funds. Refocus funding priorities on ensuring that public schools—especially those in marginalized and underfunded communities—are the primary recipients of federal support. These rescissions will restore accountability, equity, and local control over education funding, ensuring that public schools have the resources they need to serve all students. By removing preferences for charter and for-profit schools, we can refocus federal dollars on strengthening public education and improving outcomes for students in underserved communities.

Charter and For-Profit Education Deregulation and Incentive Structures under Federal Competitive Grant Programs

Charter school and for-profit education deregulation has redirected public funds toward opaque, loosely regulated institutions with uneven academic outcomes, limited accountability, and documented fraud. Rescinding federal incentives will help restore funding integrity and support the public education system.

U.S. Department of Education 400 Maryland Avenue, SW Washington, DC 20202

Phone: 1-800-USA-LEARN (1-800-872-5327) Email: oese@ed.gov (Office of Elementary and Secondary Education)

Federal charter school grants and deregulated funding streams—initially intended to promote innovation—have enabled large-scale redirection of taxpayer dollars to private operators with inconsistent oversight. Reports from the Department’s own Office of Inspector General and outside evaluations have identified waste, abuse, and lack of transparency in how funds are used. The competitive incentive model undermines traditional public schools, particularly in marginalized communities, by siphoning off funding and students without ensuring long-term educational improvement.

Removing federal incentives and deregulated pathways for for-profit and loosely regulated charter entities restores focus on equitably funded public education. It strengthens fiscal stewardship, improves transparency, and ensures that federal dollars support accountable, community-rooted schools rather than corporate interests or performance-optional franchises.

Federal grant and pass-through funding programs shall exclude eligibility for for-profit operators and limit charter school awards to entities meeting high standards for transparency, community oversight, and non-profit status. All applicants must demonstrate long-term educational benefit, fiscal responsibility, and equitable enrollment policies. Federal preference and flexibility provisions for deregulated educational models will be removed or substantially revised.

Linda E McMahon

Secretary of Education