Further action from state lawmakers will be needed, however, to make that a reality.
Lehigh Valley school districts cited cyber charter tuition as part of their escalating costs during this year’s budget talks, and a reform bill that passed the state House of Representatives now sits in the state Senate as both chambers seek to reconcile state budget priorities.
The June 4 passage of Pa. House Bill 1500, of which Lehigh Valley state Reps. Peter Schweyer and Michael Schlossberg are among the co-sponsors, puts back in play anticipated tuition savings that failed to pass last year by capping the amount of tuition cyber charters receive.
Local districts don’t see relief as a guarantee. And cyber charter leaders say the cuts would threaten their ability to educate students, and possibly lead to the closure of programs that serve more than 65,000 Pennsylvania students.
WHAT THE BILL WOULD DO
Supporters of reform point to an audit the state auditor general released in February detailing the finances of five Pennsylvania cyber charter schools, showing how much the pandemic turbocharged enrollment and revenue growth and revealing potentially excessive surpluses.
From the 2019-20 fiscal year to the 2022-23 fiscal year, overall revenue for the five audited cyber charter schools collectively increased from $473 million to $898 million as enrollment grew by 16,606 students.
Although cyber charters received federal pandemic relief funds, by the 2022-23 fiscal year the five audited cyber charters were drawing 93 percent of their revenue from tuition payments made by local school districts, the audit found.
The audit also drew attention to large reserve funds, noting the five audited cyber charter schools collectively increased their fund balances 144 percent, ending the 2022-23 fiscal year with $619 million in reserve. Such surpluses “could be considered excessive for a public school entity,” the audit says.
House Bill 1500 would cap cyber charters’ fund balances at 12 percent of total expenditures.
The bill, which has been submitted to the state Senate education committee, would also freeze applications for new cyber charter schools through the 2029-30 school year and would establish a Cyber Charter School Funding and Policy Council to generate further reform recommendations.
Cyber charter leaders have pushed back against the proposed legislation.
“If enacted, House Bill 1500 would lead to the eventual closure of public cyber charter schools in Pennsylvania and 65,000+ students would be stranded without access to an educational environment that meets their needs,” Eileen Cannistraci, CEO at Insight PA Cyber Charter School — one of the audited schools — said in a June 2 news release. “ … To state it plainly, House Bill 1500 would result in an unprecedented defunding of public education in our Commonwealth and would call into question whether it violates the PA Constitution’s mandate of a 'thorough and efficient system of public education'.”
Advocacy groups, including Education Voters of Pennsylvania, announced efforts to support the passage of the bill before the state budget deadline at the end of the month.
“House Bill 1500 will help ensure that Pennsylvanians’ hard-earned tax dollars will be invested in educating students, not packed in cyber charter bank accounts or wasted on lavish ad campaigns, flashy sponsorships, luxury office buildings, and countless other questionable expenditures,” Education Voters of Pennsylvania wrote on their campaign website.
“In addition to financial reforms, this very thorough legislation addresses many of the egregious deficiencies in the current cyber charter law that allow Pennsylvania’s billion dollar cyber charter industry to operate with little transparency and minimal accountability while running many of the lowest-performing schools in the commonwealth,” the advocacy group wrote.
HOW LEHIGH VALLEY DISTRICTS WOULD BE AFFECTED
As Bethlehem Area School District finalized its 2025-26 budget, Chief Financial Officer Harry Aristakesian said the district had not projected any savings from cyber charter tuition reform, after taking a hit in the previous cycle when reforms stalled.
“I guess I don’t want to make the same mistake twice,” Aristakesian said during a May 12 board meeting.
According to Aristakesian, BASD pays $15,276.46 for each regular education student attending a cyber charter school, and $30,693.22 for each special education student.
With 385 regular education students, and 124 special education students, the district spent $10.3 million in cyber charter tuition for the 2024-25 school year; that’s projected to increase to $11.1 million next year.
If cyber charter reform passes, tuition would shrink by at least $3.4 million, according to preliminary state estimates.
Here’s a look at how other Lehigh Valley school districts could benefit from changes to cyber charter law:
ALLENTOWN SCHOOL DISTRICT
- Tuition rate for a regular education cyber charter student: $13,597.82
- Tuition rate for a special education cyber charter student: $30,168.29 (note: in the 2024-25 school year, the rate dropped to this from a rate of $32,156.15 that was in place through December)
- Number of regular education students Allentown pays cyber charter tuition for: 609
- Number of special education students Allentown pays cyber charter tuition for: 241
- Total Allentown spend on cyber charter tuition: Nearly $16 million in 2024-25 school year; projected at $17.5 million for 2025-26 school year
- Projected district savings from House Bill 1500: Approximately $3.4 million (with more research needed to fully account for updated special education tuition formula)
Source: Jeffrey Cuff, interim chief financial officer
PARKLAND SCHOOL DISTRICT
- Tuition rate for a regular education cyber charter student: $15,051
- Tuition rate for a special education cyber charter student: $32,160 (note: in the 2024-25 school year, the rate dropped to this from a rate of $34,439 that was in place through December)
- Number of regular education students Parkland pays cyber charter tuition for: 145
- Number of special education students Parkland pays cyber charter tuition for: 79
- Total Parkland spend on cyber charter tuition: $8.5 million in the 2024-25 school year; projected at $9 million for the 2025-26 school year
- Projected district savings from House Bill 1500: $1.02 million (with more data needed to estimate savings from updated special education tuition formula)
Source: Leslie Frisbie, director of business administration
