Small cyber charter leaders in Pa. raise alarm over calls for funding reform

By Emily Scolnick, Pennsylvania Capital-Star
June 24, 2026

Emily Scolnick is a 2026 Dow Jones News Fund intern at the Pennsylvania Capital-Star.

Nearly 70,000 students are enrolled in one of Pennsylvania’s 14 tuition-free, online public schools. Lawmakers have worked to reform the institutions’ funding models and curb what they see as excessive spending over the past few years.

But cyber charter leaders say that such efforts are doing more harm than good.

While cyber charters are free for families, Pennsylvania school districts pay students’ tuition directly to the cyber schools. Tuition rates vary between districts and if a student requires special education.

Because of that, a cyber charter’s funding for any given year is directly tied to its enrollment, according to Susan Spicka, the executive director of Education Voters of Pennsylvania.

In February of 2025, state Auditor General Timothy DeFoor released a cyber charter performance audit report, which found a massive increase in several schools’ revenue and cash reserves and called for vast changes to Pennsylvania’s cyber charter funding model.

Cyber charters have also underperformed academically, with many being well under the state averages for English, math, and science proficiency.

Pennsylvania’s 2024 state budget included a significant adjustment to cyber charter special education tuition. But the current spending plan brought a sweeping round of funding changes and cyber charter policy reforms.

Cyber charter leaders said the adjustments, detailed in Act 47 of 2025, resulted in a $238 million funding decrease across the 14 schools — $60 million more than the legislature’s $178 million estimate.

Act 47 contained two other major policy changes: a new rule that habitually truant students — those who accumulated six or more unexcused absences — could not transfer to cyber charters without a judge’s approval, and a biannual residency verification requirement that aims to ensure individual school districts are paying the appropriate amounts for their students enrolled in cyber charters.

Rep. Peter Schweyer (D-Lehigh), who chairs the state House Education Committee, expressed concerns that cyber charters are “spending money in ways that do not directly benefit the students.”

“We didn’t reduce funding to education,” he said. “We’re transferring money from one type of school where the outcomes aren’t there.”

Smaller schools struggle

The leaders of seven small and medium-sized public cyber charters recently released a report claiming the funding and policy changes have “shortchanged” students and detailing what they call the “unintended consequences” of Act 47.

“An economy of scale exists within the public cyber charter school sector allowing the larger public cyber charter schools to absorb the cuts imposed in Act 47,” the report reads. “Meanwhile, the smaller public cyber charter schools (which are equally essential to Pennsylvania’s public education landscape) are struggling to make ends meet.”

Erin Van Guilder, the CEO of Insight PA Cyber Charter School, said her school has laid off 58 employees since November. Several schools have also slowed or frozen hiring to reduce spending.

“We’re not replacing anything that is not a must-replace [role],” Michael Leitera, the CEO of PA Distance Learning Charter School, said. “The last two years have not been favorable to our budget.”

He said the cuts also forced the school to pause plans to welcome a social worker to its staff.

Karla Johnson, the CEO of the Pennsylvania Leadership Charter School, said $9 million in lost funding would have gone towards student and staff programming. The school currently projects an $8 million deficit for next year.

Enrollment issues

Commonwealth Charter Academy (CCA) is Pennsylvania’s largest cyber charter and has a current enrollment of about 40,000 students. That’s six times its pre-COVID-19 pandemic numbers. The successive increases in students and tuition funding from districts has helped offset the school’s $120 million state funding loss this year.

“The influx of cash is going to be larger because more students are enrolling,” Timothy Eller, CCA’s chief branding and government relations officer, said. But the school has still slowed hiring and is examining where it can pull money from its cash reserves, which have faced scrutiny.

The school’s capital fund balance — used mainly for long-term investments — sat at just over $180 million in its 2024-25 audit. But its unassigned general fund balance is just $830,000, which Eller said is a “one-time shot of money.”

“We’ve overfunded [cyber charters] for years,” Rep. Joe Ciresi (D-Montgomery), a member of the House Education Committee, said. “There are the good ones who probably have budgeted properly that some of these changes are hurting, but we’re not putting anyone out of business and we’re not trying to do that.”

As CCA’s student body increases, smaller cyber charter leaders recognize higher enrollment is the best way to increase revenue and offset funding changes. However, according to publicly available enrollment data, nine cyber charters have lost enrollment since the COVID-19 pandemic.

“If you get less per student, you have to have more students to be able to remain fiscally solvent,” Malynda Maurer, the CEO of the Central Pennsylvania Digital Learning Foundation, said.

Spicka said that cyber charter leaders need to acknowledge their current market.

“If you’re a cyber charter school and families are not choosing your school, that’s the way the cookie crumbles, and they need to deal with that reality,” she said.

Policy changes

Cyber charter leaders said the habitual truancy policy and the increased frequency of residency verification have also raised some issues. PA Distance Learning’s enrollment has declined since January due to the truancy rule, Leitera said. The school is anticipating another downturn next year, which may prevent it from reaching its enrollment target — a critical number for financial stability.

Maurer said her school has needed to turn truant students away.

“We do tend to enroll students who are habitually truant, because our program is designed to help kids re-engage in school. That’s the reputation we have,” she said.

CCA sued to challenge the truancy policy in May.

Multiple Republican lawmakers have begun introducing legislation to refine aspects of Act 47.

Sen. Dawn Keefer (R-York) and Rep. Barbara Gleim (R-Cumberland) distributed memos aiming to revoke the truancy policy, which Gleim wrote “shifts decision-making authority away from parents and places it in the hands of bureaucrats.” Her bill currently sits in the House Education Committee.

“[Truancy] was just targeted as a cyber issue,” Keefer said. “It all seemed to be one-sided. The cyber charters had no seat at the table.”

Rep. Joe D’Orsie (R-York) and Sen. Jarrett Coleman (R-Lehigh) want to reduce residency verification to an annual requirement. D’Orsie said lawmakers “want compliance, but we don’t want to confuse the people who are filling out these forms.”

“It is overwhelmingly popular in our communities and with many people in the Senate, including many Senate Republicans, to put controls on this incredibly expensive and incredibly underachieving area of public education,” Schweyer said. “I don’t think there are good faith arguments being made by many members that are based on the facts and the data that is sitting in front of us.”

Current outlook

Cyber charter reform efforts are “headed in the right direction,” said John Armato, the Pottstown School District’s director of community relations. Pottstown saw a $215,000 reduction in cyber charter spending this year, allowing it to maintain access to guidance counselors.

Spicka said support for Act 47 was “enormous and bipartisan” during last year’s budget negotiations. She hopes legislators will continue to build on the past two years of reform.

This year’s Democratic-supported state budget proposes another $75 million in cyber charter funding adjustments. Cyber charter leaders say that this decrease, coupled with preexisting funding uncertainties, could prove irreparable.

Leitera said PA Distance Learning’s fund balance would not cover a full year of operating expenses. His school is predicting a 20-25% revenue reduction for the 2026-27 school year, and its projected deficit — already between $3 million and $4 million — could still grow.

As cyber charters grapple with potentially losing more funding, Schweyer emphasized that he and other lawmakers are working to hold the institutions accountable for their spending and help provide students with the best education possible.

He said the recent reforms, as well as new legislation aiming to ensure cyber student well-being, are continuing to further that goal.

Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.