At least three charter schools in Santa Cruz County have received funding through the federal government Paycheck Protection Program (PPP), the $ 660 billion initiative created to use taxpayer dollars to help keep small businesses and nonprofits afloat.

Watsonville Prep School, the largest such local recipient, received more than $ 1.7 million. Pacific Collegiate School (PCS) in Santa Cruz and Ceiba College Preparatory Academy in Watsonville have both taken out loans in the range of $ 350,000 to $ 1 million, reaching hundreds of charter schools across the states. United who have received millions of dollars in PPP aid, data shows. of the Small Business Administration (SBA).

The federal government says low-interest P3 loans can be canceled if borrowers use at least 60% to cover salary costs.

The fact that charter schools have used their status as nonprofits to apply for funds, while public schools are not eligible, has angered education officials who say charter schools are doubling down. also accepting public education dollars.

Public schools, on the other hand, cannot receive the funds because they are funded by taxpayer dollars, says Nina Ramon of the US Small Business Administration, based in Washington, DC.

The controversy over the deployment of PPP is not unique to charter schools. While the program has been a lifeline for local businesses, large companies like Shake Shack have repaid their loans after public backlash from people saying the money was intended to help small businesses weather closures. linked to Covid-19. Loan recipients also included publicly traded companies and businesses with ties to friends, family and associates of President Donald Trump.

Across the country, charter schools have received up to $ 2 billion in P3 loans, says Carol Burris, executive director of the Network for Public Education.

That number is probably a low estimate because smaller loans are not made public, she says.

The problem, Burris says, is that PPP funds were meant to support small businesses and organizations that couldn’t make payroll after lost revenue from Covid-19.

Charter schools, she said, have never lost their income.

“We don’t know of any other organization that is 100% taxpayer funded that also receives P3 funding,” she said. “Charter schools haven’t had the income disruption that has kept them from paying payroll.”

Maria Reitano, principal of the school at Pacific Collegiate, said PCS has used the majority of its forgivable loan to pay employees so the school can continue to provide services to students and families during the pandemic.

“A small portion of the funds received was used to pay the rent for our school, an expense that schools in the district context do not incur,” she said. GT by email.

Reitano further says the pandemic has created unanticipated costs, and she adds that some potential budget cuts in the California education system could impact charter schools, including the PCS. The state will carry over about 20% of public funding for PCS for this year until the summer and fall of the next school year, she said.


Kirsten Carr of Navigator Schools, who runs Watsonville Prep, says the school loan helped protect 182 jobs, which in turn provided services to the organization’s 1,250 students after Covid-19 forced them schools to close.

Carr explains that as a non-profit organization, Navigator was eligible to apply for the program.

Carr says Navigator has seen the financial impacts of the pandemic, as have school districts in the United States, including providing iPads to all of its students, hotspots for families without internet, live lessons and daily meals.

“These services and support impacted our overall operating budget and the PPP was able to help avoid reductions in staff and services,” she says.

Carr adds that public charter schools do not have access to some of the same funding as school districts, such as bonds.

Ceiba school principal Josh Ripp said the school had applied for its PPP loan to help protect more than 100 jobs after the Covid-19 hit. “Given the financial landscape we find ourselves in, it was prudent to participate in this program,” he says.

Many local private schools have drawn PPP money.

It is difficult to have a clear overview of the data because the dollar amounts of their loans were withheld for larger loan recipients, and smaller loan recipients had their names withheld. Additionally, the SBA has misreported loan amounts from many businesses and nonprofits across the country, including at least two in Santa Cruz County.

However, according to the best data available, educational institutions in Santa Cruz County, including charter schools, private schools and a few small colleges, have raised between $ 6 million and $ 16 million in total.


Nina Rees, CEO of the National Alliance for Public Charter Schools, says charter schools are eligible for the same education funding as public schools since they are part of this system.

“Charter schools are free, tuition-free public schools,” she says. “They are generally incorporated as non-profit organizations, some of the same entities identified under the CARES (Coronavirus Aid, Relief and Economic Security) law as eligible for PPP loans.”

Rees says charter schools must shoulder the burden of paying their own mortgages, rents and utilities and raise funds to cover them, which can be difficult to do during a pandemic.

According to Rees, 60% of charter schools are independent, single-site organizations with small budgets.

Rees says about 1,700 charter schools that are not part of a public school district do not receive guaranteed funding under the CARES Act funds.

This is not the case with PCS, Ceiba, and Watsonville Prep, all of which receive average daily assistance funds from their respective school districts.

Burris says charter schools are eligible for certain funds from their own national organizations.

“The way we think it’s really unethical,” she says. “P3 is designed to support paycheck protection. No obligations, no addition of wing to a charter school. One goal: to prevent non-profit organizations from firing people because they no longer receive income. “

Additional reporting by Jacob Pierce.


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