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The torment Shatavia Walker faced at her old school never let up. "People were hitting me, kicking me. They'd say I'm fat, ugly, stupid, smell bad," recalls the Milwaukee seventh grader. A quiet girl, Shatavia, 13, reacted to the teasing by becoming more withdrawn, emboldening the bullies. "It made me feel like I wasn't supposed to be there."

Shatavia is exactly the kind of student that English teacher Tina Owen had in mind when she opened Alliance Middle School last August, expanding a Milwaukee charter high school that she founded in 2006 with a strict policy of acceptance for all—and zero tolerance for bullying. "I was hearing horrible stories about kids bullied and beat up and not coming back to school anymore," says Owen, 37. Here, at the first junior high of its kind, Shatavia says she has learned a new way to cope with anger: "When someone gets on my last nerves, I write about it." As a result, observes one of her teachers, Alicia Moore, "I have seen her really start to come out of her shell."

At Alliance High School, where most of the 145 students are black or Latino, and more than half have come out as gay or transgender, kids learn quickly that everyone has a place. And while none of the 15 new middle schoolers self-identify as gay, most seem at ease here. "They feel like they have something in common with students who are gay," says Owen. "They've also been ostracized because of who they are." There are other gay-friendly high schools in the U.S., but Alliance, housed in a former brewery complex, is an anomaly in this blue-collar town. "Even if a parent doesn't believe in a child's lifestyle," says Owen, who is a lesbian and mother of five children ranging in age from 14 to 22 with her partner, Jennifer Morales, a writer, "they want their kids in a safe place."

Once that is achieved, learning can begin. Alliance has a higher graduation percentage than the district average and placed second among Wisconsin's 204 charter schools for High Achievement Charter School of the Year in 2009. "As schools look for ways to improve academic performance, they cannot overlook the importance of a safe, supportive climate," says Dewey Cornell, an education professor who helped conduct a new University of Virginia study that shows students do better when bullying isn't a threat.

Alliance's success has mostly silenced critics who charge that it is segregating students out of the mainstream, or who are uncomfortable with the open acceptance of gay students. Still, the Christian Civil Liberties Union protested in front of the building last year, and its president remains unconvinced by Alliance's mission. "They've chosen a lifestyle. How can you separate them for special attention when they're not special?" says Robert C. Braun. "I don't think they're being bullied at any school to any degree."

The students tell a different story. At her old school, Kat Ligon, 13, was called fat, and her grades suffered. Here she's known as a girl who loves baking and writing songs and earns mostly A's. "I had never gotten on the honor roll before, and now I am," says Kat. "It makes me feel good. It makes me feel smart. No one cares here what you look like." Adds her mom, Candy Prasnick: "I'm glad to see she's fitting in. She's just happier in general."

Walk Alliance's high school hallways and you see boys in heavy eye makeup alongside teens with tattoos and body piercings. The middle school is less of a fashion show, but it is distinct for the messages touted by posters on the classroom walls, such as "Anger is only one letter short of danger." With younger kids in the building, the upperclassmen, says Owen, "are trying to be good role models. It makes the middle school students feel like somebody cares, like the older students want them to do well."

All the kids learn a phrase meant to put an end to playful teasing before it turns serious. "The phrase is, 'I'm not playing; please stop,'" says English and science teacher Moore. "If someone says that to you, but you continue, then it's harassment, which then comes with disciplinary consequences."

But Alliance's ideals still run up against the reality that many of the newcomers are from troubled backgrounds; the bullied can become bullies. Teachers often need to enforce rules, stop arguments, call parents. Early on there were two fights, and a girl transferred out after being reprimanded for teasing. Throughout the year lessons in conflict resolution are given equal weight as history or math lessons, and by midterms the fighting has stopped.

So while some rainbow mortarboard tassels at graduation may outwardly set Alliance apart, it's the unraveling of bullying culture that makes the place unique. "There's a perception that middle school [is] supposed to be awful, and so you let it be awful for kids," says Moore. "School doesn't have to be that way."

Shatavia Walker didn't know it could be any other way. But now that getting picked on isn't a major issue, she has made some discoveries. "I like to write about my life," says Walker, who records her thoughts in a white flowered diary. Though she admits that class can be "boring" and "I don't like writing papers," she adds with newfound confidence, "I'm smart."