Critics want pandemic funds returned

  • USA TODAY found that 1,139 US charter schools had $1 billion in canceled PPP loans.
  • The survey found that almost all – 93% – had not lost money during the pandemic.
  • Critics want the Small Business Administration to get PPP refunds from charter schools.

The Biden administration has promised to prosecute those who may have abused federal financial aid during the pandemicand charter schools could be one of the industries under scrutiny.

State-funded but privately run schools that teach a fraction of American children have secured more than $1 billion in forgiven loans from the Paycheck Protection Program designed to help struggling small businesses during the pandemic.

A USA TODAY survey found more than 1,100 U.S. charter schools had those loans forgiven, but 93% of them may not have needed the money because they were in states that have continued to fund their operations at the same level as before the pandemic, and even at even higher levels in some cases.

The loan program had enough wiggle room to allow small businesses, including charter schools, to qualify without showing financial need. Federal regulations only required companies applying for the loans to say they were facing “economic uncertainty” and that the money was needed to support ongoing operations.

USA TODAY CHARTER SCHOOL SURVEY:Taxpayers covered $28 million in charter school PPP loans from the KIPP Foundation despite its $75 million in assets

‘THE ETHICAL THING TO DO’:Why This Small San Diego Charter School Passed On COVID PPP Loans

A congresswoman and tax watchdogs are calling on the federal Small Business Administration (SBA), which administered the loan forgiveness program, to claw back some of that money.

Charter School PPP Loans

USA TODAY reviewed documents from the Internal Revenue Service, SBA, state departments of education and charter schools, and interviewed dozens of people, including education experts and school dogs. guard to find:

►The range of canceled loans for 1,139 charter schools in 37 states was $150,746 to $9.8 million.

Some charter schools have used the money to increase savings accounts or, in one case, hand over millions of dollars to an investor.

A small San Diego charter chain that serves low-income kids has transformed a $3 million PPP loan, claiming that taking the money was unethical because California has not cut any funding for public schools.

►A California charter chain secured $32.7 million in PPP loans using 12 non-profit companies linked to different schools to get the money. All loans were sent to the same address in Lancaster. The channel, Learn4Life, denied any wrongdoing.

KIPP, one of the largest charter chains in the country, saw its results increase by $27 million in fiscal year 2020. However, 14 of its affiliate organizations across the country received $28.4 million in PPP loan forgiveness. KIPP said its affiliates had additional financial needs.

Got a tip on business or investigative stories? Contact the reporter at craig.harris@usatoday.com or 602-509-3613 or on Twitter @CraigHarrisUSAT or linkedin.com/in/craig-harris-70024030/

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