“Social Impact Bonds,” which are a bonanza for financial investors like Goldman Sachs, is included in the new ESSA that passed the House yesterday. All efforts to strip it out must concentrate on your senators.
The matter appears in Title I, Part D, Section 4108, page 485.
Title IV, A.
And in a section called “Safe and Healthy Students.”
Social Impact Bonds are defined on page 797 as “Pay for Success.” Investors are paid off when a student is not referred to special education.
This business of profiteering in public education can only be stopped by electing people to office who will fight it.
Diane Ravitch's blog 
Reblogged this on Politicians Are Poody Heads and commented:
Yet more profiteering by dumping or refusing services to those children who need it the most. Call or email your Senators.
I am noticing at the local level, states are passing Pay for Success laws to fund preschool and daycare programs for low income working mothers. Of course the primary goal is to direct any savings in social welfare costs to the investor. I am suspicious of the people behind these contracts because they are the same group of people (ALEC types) who are opposed to Head Start. It’s hypocritical to be for daycare but against Head Start.
Also, the recent NYTimes story (Did Goldman Make the Grade 11/4/2015) highlighted how Goldman was able to change the formula that defines their success in a way for investors to make more money.
Contact your representatives please!
Wall St will use this taxpayer gift in any number of sleezy ways. They can securitize them & sell to unsuspecting investors like they did with mortgages. Though unlike bad mortgages our taxes will keep the money spigot going.
Retired teacher is right, Wall St has so many opportunities for committing fraud & make risky bets with OUR public school money it makes me sick to my stomach.
I am totally disgusted with everyone on both committees including the president who will sign it & brag about the glories of bipartisanship.
If POTUS REALLY wanted universal Pre-K, all he had to do was advocate for expanding Head Start. As hard as he arm twisted for that rotten, unpopular TPP trade deal. Head Start’s infrastructure is in place and is well positioned to scale up to accommodate all kids- including those with disabilities.
Does anyone want to bet Hillary will be running around campaigning for Universal Pre-K on the campaign trail? Her Wall St donors will be so pleased.
“The Goldman Sacks Formula for Success”
Burn both ends of stick
And stick it to the chumps
That’s the Goldman trick
For profiting like Trumps
“Pay for Success” is a vile form of profiteering that has so much latitude for abuse that it makes my head want to explode. This is a backdoor attempt at further privatization; only this time the exploitation extends to stealing money allocated to serve the poorest of the poor and the most vulnerable, and frequently expensive, to educate. Handing these funds over to corporations is about as valid as taking millions of dollars and heading to the nearest casino. I taught ESL for many years to very poor, struggling students, and I was paid in part from Title 1 money for a direct service I provided daily to these students. I would be willing to match the success of these students with anything a corporation can invent. It is troubling that we would allow corporations to exploit special education, ESL, compensatory education such as remedial reading and math to send needed funds to greedy corporation schemes masquerading as “innovation.” What will be permitted will be the sales of more products, and “intervention” from unqualified staff, designed to keep the level of economic commitment to certain designated students low. This is doomed to fail!
Disgusting
Ms. Ravitch — You have provided the word that has alluded me for years to describe the nature of Social Impact Bonds. An alternative financing model in operation for ten years is the Opportunity Compact –where savings are traced by agreed upon measures and returned to sustain and grow the effective intervention. If the intervention saves more public dollars than the cost of the program then the surplus or “net savings” are shared by the public agency and program operation. All funds in the Compact model benefit population and communities that achieve success with new services and opportunities. Bravo to you Ms. Ravitch for describing the depletion of public funds for profit. Please check out the Opportunity Compact reinvestment instrument at http://www.safeandsound.org. Hathaway Ferebee
I just tried to send Senator McCain a message through the senate website. I received a message that it was down for maintenance. What is this? Did teachers crash it or are they trying to avoid our emails?
Pay for Success will go for expensive social and educational services that appear to have a low cost “fix” and low risk for investors. The preschool programs are designed to reduce enrollments in special education. They are designed to eliminate “minor” learning problems before Kindergarten.
Investors are placing bets on programs that offer anything that looks a super credible cost-saver to taxpayers, have some evidence of efficacy and lowered cost. The preschool programs now in the works are based on solid research, some from decades ago with follow-on studies into adulthood of participants and the control groups. The investors pay for scaling these low-risk models up also overiding local control.
I can cite a good candidate for investment—what might appeal to investors. This is not intended as a recommendation, but to suggest what sort of program could be sold to investors.
Consider the “mindsets” program of Dr. Carol Dweck and colleagues at Stanford. This program has received “Skills for Success” funding from USDE. The proof of concept on scaling up is by on-line delivery of appealing modules including games.
Dr. Dweck has a best-selling business book, a TED talk, and deep well of peer-reviewed research in psychology and education. She has developed ready -to-use products and teacher training programs. The “mindsets” work has been developed with colleagues and doctoral students at the ”Project for Education Research That Scales” at Stanford (PERTS). The pay for success contracts want programs than can be scaled. The promise? That motivation to learn and hence academic achievement can improved by some fairly simple strategies of teaching students (and their teachers and parents) to have the right “mindset.” The right mindset is called a “growth” mindset.” It is an “I can do this” attitude. Teachers (student peers and parents) who know how to give the proper forms of praise can produce big gains in learning. Think “power of positive thinking” but with a rationale built around the science of neuroplasticity and great images of brain activity. For more go to “brainology” or the “MindSets” websites or https://www.perts.net/
Dweck’s work is aligned with that of psychologist and MacArthur Award winner Dr. Angela Duckworth whose “Character lab” sponsors studies of “grit” and “self control” as central to “success.” Like Dweck, Duckworth has a presence in TED and is probably best known for reviving interest in the marshmallow test as a predictor of academic and life “success.” Both of these researchers have collegial relationships with scholars affiliated with the Collaborative for Academic, Social, and Emotional Learning (CASEL) based in Chicago. CASEL is playing a major role in getting states to set and integrate standards for social emotional learning with academic standards.
I think that the strategies from these three centers (among others) could be packaged, marketed, and play a role in pay for success contracts that place high value on “self-management” as a solution to problems, including many of those problems in search of solutions in ESEA, Title IV. Among these are dropouts; drug, alcohol and substance abuse; bullying, “unhealthy relationships,” teen pregnancy; and so on.
i do not support pay for success contracts. They are money making schemes with the pretence of benevolence attached to them. They are financial products with great opportunities for misleading the public and public officials.
Here is a list of Pay for Success Projects underway or in process of development 2015
•Chicago, IL –Early Education
•Salt Lake County/Utah –Early Education
•South Carolina –Early Childhood (in process)
•Massachusetts –Chronic Homelessness
•Santa Clara County, CA –Chronic Homelessness
•Minnesota –Homelessness (in process)
•Denver, CO –Homelessness (in process)
•Cuyahoga County, OH –Homelessness/Foster Care,
•Connecticut –Substance Abuse and Foster Care (in process)
•Massachusetts –Juvenile Justice
•New York City –Juvenile Justice
•New York State –Juvenile Justice (in process)
•New York –Justice/Workforce Development
•Illinois –Dually Involved Youth-services from child welfare and juvenile justice systems- (in process)
•Santa Clara County, CA –Mental Health (in process)
•Fresno County, CA –Asthma (in process)
•Washington, DC –Teen Pregnancy (in process)
•Pending Legislation to ease the way for pay for success contracts—Idaho; Los Angeles County, CA; New Jersey; Oklahoma; Oregon; Washington; Texas
•Federal Interest –Treasury Department; Department of Labor; Department of Justice; Department of Health and Human Services; Social Innovation Fund, US Department of Education
Source of information Third Sector Capital Partners, Inc.
info@thirdsectorcap.org
Why don’t these banksters invest in tangible things? There is no reason for Wall St to be in between our government money & our education system.
Reblogged this on Crazy Normal – the Classroom Exposé.
“Social Impact Bonds are defined on page 797 as “Pay for Success.” Investors are paid off when a student is not referred to special education.”
Sounds like health insurance (when an insurance company benefits by not paying for a patient visit to a specialist)
Who comes up with these brilliant ideas anyway?
Goldman Sachs and United Health Group that’s who.
It has reached the point where corporations are quite literally writing our laws.
While the immediate corporate ROI will be in special education, who will pay for the lawsuits by parents for the failure to abide by IDEA? I can see lots of other misapplications of “Pay for Success” that target needy subgroups.
https://nonprofitquarterly.org/2014/06/12/eight-sobering-thoughts-for-social-impact-bond-supporters/
The only other way to eliminate “Pay for Success” programs is through class action lawsuits. Lots of them. Pay for Success is immoral, unethical and illegal under IDEA. Will IDEA still be in effect after ESSA passes?
I’m throwing a question out for anyone to answer. My HS student just experienced a different kind of “Pay for Success”. He was given a $10.00 gift card for scoring well on our state mandated tests. In his words, “I would have gotten $20.00 if I had scored a little higher.” I’m trying to get information before I address the school. Where in the world is my public school getting the money to bribe my kid to be a good little test taker?
Anyone?
Michelle, ask the school. There have been social science experiments to pay kids for higher test scores. They failed.
I’m throwing a question out for anyone to answer. My HS student just experienced a different kind of “Pay for Success”. He was given a $10.00 gift card for scoring well on our state mandated tests. In his words, “I would have gotten $20.00 if I had scored a little higher.” I’m trying to get information before I address the school. Where in the
world is my public school getting the money to bribe my kid to be a good little test taker?
Anyone?
I will, Diane. Thanks. Sorry for the re-post. It was accidental – not a dismissal of your response.
Reblogged this on David R. Taylor-Thoughts on Education.
I just emailed both of my Senators.