Explained: What Is the Federal Charter Schools Program?

Charter schools are public schools with a purpose. Operating independently from traditional school districts, they're tuition-free, open to all students, and publicly funded—but with more flexibility to innovate in exchange for higher accountability. For many parents, especially in communities where traditional schools have struggled, charters have offered fresh hope and real alternatives.

In 1993, when charter schools were a new, bipartisan idea, President Bill Clinton proposed supporting them with federal funds. Two years later, Congress made it happen by putting $6 million into competitive grants to states. The winning states sent the money on to new operators to get charter schools off the ground.

Since then, the federal Charter Schools Program (CSP) has become a vital source of funding, helping new charter schools launch and supporting high-performing ones as they grow. Here’s how the program works, why it matters, and where it’s headed today.

Are Charter Schools Private?

Do They Receive Federal Funding?

Why Does the Federal Government Fund Charter Schools?

The federal government gives approximately $440 million to charter schools every year, competitively distributed to both states and directly to charter school operators. Since its inception 27 years ago, the Charter Schools Program has provided more than $6 billion to charters. 

The money covers essential, hard-to-fund expenses, like facilities and start-up costs that must be paid before the first students even walk through the doors. A small subset of the money goes to replicating schools that have shown a track record of success with their students.

The money has been crucial to charter school expansion. As of the 2016–17 school year—the most recent year with publicly available data—45% of charter schools had received funds through the program. 

It’s also important to keep the growth of charter schools in context. Though their number has grown rapidly since the ‘90s, they now serve only 7.5% of the nation’s public school students—roughly 3.7 million children.

Similarly, that $6 billion for charter schools may sound like big bucks, but in reality, it is chump change compared to funds for Title I, the main federal support for schools serving low-income families. That $6 billion over multiple decades is just a fraction of what the feds invested in Title I over the same time period.

What Are the Benefits of Charter Schools?

• They respond to community needs. Charter schools are often created in direct response to parent and community demand, with missions tailored to serve local students.
• They innovate. Freed from many of the bureaucratic constraints of traditional districts, charter schools can experiment with extended learning time, project-based curriculum, and other student-centered approaches.
• They’re held accountable. Unlike other public schools, charter schools can be shut down if they fail to meet their performance goals.
• They prioritize equity. Many charter schools specifically target underserved neighborhoods, offering rigorous, culturally relevant education to students who have historically been denied access.
• They empower educators. Charter schools often give teachers more voice in school design and more flexibility in how they teach—supporting leadership and professional autonomy.

What Is the Future of the Charter Schools Program?

When Biden took office, funding for the Charter Schools Program held steady at the $440 million mark. Though a supporter of quality charter schools, Biden has close ties to teachers unions—who strongly oppose charters because they shift money out of traditional school districts, which threatens their jobs and salaries.

• Eliminated federal funds for for-profit charter schools
• Encouraged charters to prove they can help desegregate children’s school experiences
• Required new charters to show “unmet demand”—preferably by submitting data that showed traditional public schools in the area were overcrowded

While targeting for-profit charter schools makes sense to many, some of these new rules are more problematic. These policies overlook the reality in many urban communities, where enrollment is declining, but the need for better schools remains urgent. At stake is a deeper question: Are charter schools a luxury to cut when numbers drop, or a vital strategy for innovation when traditional schools fall short?

The program’s future has become even more uncertain under President Trump, who returned to office in 2025. His administration has renewed efforts to dismantle the U.S. Department of Education altogether—an unprecedented move that could upend how federal education programs, including the CSP, are administered and funded.

At the same time, Trump has signed an executive order directing federal agencies to prioritize private school vouchers and other school choice initiatives, raising real concerns that CSP funding could be redirected or significantly reduced.

Together, these moves mark a sharp shift in federal education priorities and cast doubt on whether the government will continue investing in new charter school growth. Losing that support wouldn’t just stall progress—it would pull the rug out from under schools that are reimagining what public education can be.

Last Updated: April 2025