A new report shows that charter schools are becoming more racially diverse, enrolling more impoverished students, and performing better than in previous years, but experts say challenges remain.

Since the first charter school opened in North Carolina in 1997, the legislature has required that the State Board of Education compile an annual report on how charter schools are doing and the impact they have on their communities.

Charter schools are taxpayer-funded public schools, but with key differences. While charter schools have more flexibility when it comes to setting the academic calendar and hiring teachers, they aren’t required to offer transportation or free or reduced lunches.

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