US charter schools: Investment magnet for visa-needy foreigners?
Cash-starved charter schools meet cash-flush Chinese, Pakistani, and other foreigners looking for US investments that will get them a visa.
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Brain said the closures did not affect his company's bottom line and he remains convinced charter schools are a profitable sector. But even he's not ready to start backing untested startup schools.Skip to next paragraph
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Charter school administrators say they know that wariness all too well.
"Until you get that charter renewal that says you're doing good things," typically after five years in operation, "banks won't even talk to you," said Hank Stopinski, principal of the Health Sciences Charter School in Buffalo. Without foreign investment, he said, "we would not have been able to do this project."
The EB-5 program has drawn sharp criticism in the past. Some immigrant investors have lost both their money and their shot at U.S. citizenship when their American partners proved inept or corrupt. In the US, critics have questioned the value of trading visas for scattershot investment.
Yet interest is surging. In the first nine months of this year, the government approved 3,000 petitions from foreigners seeking to participate in the program - nearly twice as many as were approved all last year, according to the Department of Homeland Security.
Charter schools have become particularly trendy because they are pitched as recession-proof.
An investor forum in China last spring, for instance, touted US charter schools as a nearly fool-proof investment because they can count on a steady stream of government funding to stay afloat, according to a transcript posted on a Chinese website.
Arizona educator Holly Johnson, who runs three charter schools and plans to open a fourth next year, said she couldn't believe how easy it was to secure $4.5 million in funding from abroad.
"We didn't have to do anything at all," she said, other than open her schools to potential investors. They didn't ask many questions, she said. Their concern was more basic: "They wanted to come over and make sure it was real."
Eager to join the rush, Ali Faisal devoted a day this week to touring charter schools in Arizona.
Faisal, 37, is a Pakistani citizen who now lives in Calgary, Canada. He runs a technology consulting business that works with oil and gas companies and says he is eager to expand to the US. He figures the best way to do that is to get a green card.
And the best way to do that, he said, is the EB-5 program.
Participants can get a temporary visa by investing $500,000 to $1 million in a federally approved business. If the business creates or preserves at least 10 jobs in two years, the investor and his immediate family are eligible for permanent residency in the United States.
"It's a much easier path," Mr. Faisal said.
He decided to put his money in a charter school, he said, because that way he felt he'd be serving society as well as helping himself. The schools he saw impressed him with their rigorous science curriculum and he said he hoped his investment would help nurture a new generation of American entrepreneurs.
"Investing in some type of hotel," Faisal said, "will not give me that inner satisfaction."