Chicago Public Schools officials told a longtime charter school operator that its privately run but publicly financed network is on the brink of financial collapse and the district will not fund its $5 million bailout request, according to documents obtained by WBEZ.
Last week, CPS sent a letter to the ASPIRA charter school network saying a months-long district investigation found “a failure of governance” and “a lack of financial proficiency necessary to successfully run a school.”
Asked about the scathing report, the CEO of ASPIRA, Edgar Lopez, blamed CPS funding and enrollment policies. He says he does not have enough money to make payroll next week.
The charter network runs two high schools — ASPIRA Business & Finance High School and ASPIRA Early College High School — both located in Avondale on the Northwest side. Together, they have about 570 students. Last school year, ASPIRA voluntarily closed a middle school in Albany Park, citing financial troubles and a decline in enrollment. ASPIRA has operated schools in the district since 2003.
Lopez says he believes CPS will come through with funding and make sure the schools can stay open through the academic year, which ends in June.
“They can’t leave students out on the street. They have never done that, ” Lopez told WBEZ. “So my goal has always been to survive this year. But they make it hard.”
Members of the Chicago Board of Education have been vehemently against any mid-year school closings and CPS officials note that ASPIRA has not, as of yet, announced its intention to close.
But the letter obtained by WBEZ shows CPS does not have confidence that ASPIRA can keep operating through the end of June “without immediate and significant corrective action,” despite a recent round of staff layoffs that was estimated to save $1 million.
ASPIRA leaders had also expected to save money following the closure of the network’s middle school. But the charter operator told the district in late September that the “anticipated financial relief” hadn’t materialized, according to the recent CPS letter.
At another meeting on Oct. 23, ASPIRA leadership admitted that, even after layoffs, projected revenue for this fiscal year would only cover salaries, and there wouldn’t be enough for building upkeep, student transportation and instructional materials, according to the letter.
ASPIRA is the latest charter school operator in CPS to run into serious financial problems. Already this school year, a small charter school in South Chicago announced plans to close in June. And last school year, one of the district’s largest charter school networks, Acero, announced plans to shutter seven of its 15 schools. But the CPS Board of Education decided to take over the management of five of them.
Earlier this month, the CPS board also voted to turn the privately run, publicly funded Chicago High School for the Arts into a district-run magnet school.
Enrollment declines fuel cash flow problems
The CPS letter, described as a “formal Notice of Financial Irregularities,” was sent to the head of ASPIRA’s board, David Rodriguez, by Zabrina Evans, the executive director of CPS’ Office of Innovation & Incubation, which oversees charter schools. The blistering missive was copied to top CPS officials, including Acting Chief Education Officer Alfonso Carmona and Elizabeth Barton, the acting top lawyer for the Chicago Board of Education.
Evans says in her letter that ASPIRA’s CEO asked for a $550,000 advance from CPS on June 30 and officials decided they could give the charter network no more than $250,000, which was used to “make payroll.”
“This reliance on District advances is not an isolated occurrence; rather, it is part of a broader pattern of fiscal irregularities,” Evans wrote. “It reflects an organization that is reactively managing from crisis to crisis.”
CPS says ASPIRA has suffered from waning student interest in attending its two remaining schools and accused the charter operator of “fiscal negligence” because it allegedly “continued to build annual budgets that failed to align with the clear downward trend in enrollment.” The schools have lost more than a third of their enrollment over the last four years, according to the figures in Evans’ letter.
“ASPIRA’s sustained enrollment decline has severely impacted its financial viability,” she wrote.
Lopez says CPS steered students away from ASPIRA toward other schools and is to blame for the drop in enrollment. Only 41 freshmen enrolled this year in the Business and Finance campus and 38 at the Early College campus. The two schools had the capacity for 370 more.
He says he was told that students were assigned to ASPIRA based on their preferences on the CPS high school application. But Lopez doesn’t buy it.
“This is Chicago. I don’t trust it, right?” says Lopez, a former Democratic state representative. “I was in government for a long time.”
Because charter schools get money from CPS for each student, the decrease in enrollment will result in $1.5 million less than ASPIRA was expecting this school year.
Lopez says he already laid off 27 administrative staff and 10 teachers.
“We were barely making it, but we were making it through because we cut,” he said. “I like to use a statement: No one can buy a pencil without me approving it, right? We’ve been tight with the money, but, when they cut an additional $1.5 million, what do I do?”
How large is ASPIRA’s budget deficit?
In the letter to ASPIRA, CPS officials say they do not know exactly how bad the situation at the charter network is and they blame administrators for not providing a clear and thorough accounting, even as CPS looked deeply at the organization’s finances starting in June. During that time, according to the letter, ASPIRA leaders have made a series of ever-expanding bailout appeals to the school district.
“ASPIRA’s reported funding needs have fluctuated significantly, initially referencing shortfalls of $1.6 million, later $2.3 million, and now identifying an additional $5.1 million required to complete the 2025-2026 school year,” Evans wrote.
Evans wrote that the most recent relief request was “unsubstantiated” and that last week CPS asked ASPIRA “to clarify the basis of these shifting requests.” ASPIRA leaders were not able to explain the discrepancies, according to CPS.
“This lack of transparency and inconsistent reporting has made it impossible for the District to determine the network’s actual financial position,” Evans told the ASPIRA board.
Before agreeing to give ASPIRA any extra funding, CPS officials say the charter network must provide a long list of documents for regulators to review.
Those documents will help CPS “validate ASPIRA’s financial position, monitor solvency, and determine whether the organization can continue operations” through the end of the school year, Evans wrote.
Lopez argues that part of the problem is that ASPIRA and other charters are being shortchanged by CPS. He says the school district is providing less per student than it should, adding to the network’s financial stress.
By law, school districts are supposed to give charters no less than 97% of what they spend on students who attend district-run schools. Lopez says CPS is giving charters just 83%.
CPS holds back some money from charter schools for expenses it considers the “shared responsibility of all schools.” These include the district’s pensions costs and debt payments. In CPS’ budget book, it defends this practice, saying “we consider these expenses to be on-behalf-of contributions to charter schools.”
It’s unclear how quickly ASPIRA or CPS officials could move to address the charter operator’s cash shortfall. ASPIRA’s board had scheduled a meeting on Nov. 12, but it was canceled, according to an announcement on the organization’s website. At a special board meeting last month, the main items on the agenda included an update from the ASPIRA CEO on a “bank loan extension,” records show.
Charter school trends
The financial troubles at ASPIRA and other charter schools are putting CPS and the school board in a precarious position. In general, board members are against closing schools because they cause disruptions for students. But enrollment in the school district has declined significantly, including at charter schools, which makes it hard to justify keeping them open.
School board members have expressed frustration when financial problems at charter schools have taken them by surprise. In response, CPS has implemented policies that officials hope will help the district stay on top of charter schools. Those include tighter financial oversight and more performance monitoring.
School Board member Norma Rios-Sierra, whose district includes the two ASPIRA campuses, says “losing these schools would be devastating for the Latino community.” She says the schools help connect families to resources, such as food pantries.
“They are safe spaces for our students,” she said. “This is beyond just educating the students.”