I have written before about the controversial program called “Pay for Success.” This is also known as “social impact bonds.” Recently, two officials at the US Department of Education and the White House wrote an opinion piece in the Salt Lake Tribune applauding the use of “pay for success” to expand pre-kindergarten programs.
What is “pay for success” and what are “social impact bonds?” As blogger Fred Klonsky explains:
Pay for Success is a social impact bond (SIB) that pays Wall Street investors like Goldman Sachs a bounty for every child that does not receive special education support.
Pay for Success is nothing less than a push-out program that then pays the bond investor a bonus for every child that is pushed out of special ed services.
Special education advocate Beverley Holden Johns sent me this comment on the administration’s endorsement of “pay for success”:
In my opinion this is a new low for USDOE. Uncritically mentioning that
only one student in the PFS group was identified for special education,
justifying these absurd results by stating it will be a bumpy road, completely
failing to stress that only very high quality pre-school produces results –
failing to point to the very substantial questions about the quality of PFS in Utah,
not stating that Goldman Sachs has ALREADY BEEN PAID over $260,000 as its
first payment, and by saying USDOE is excited by Pay for Success in ESSA is irresponsible.
Bev Johns
Diane Ravitch's blog 
Diane, do you have information on the characteristics of the students prior to their pre-K program? Would we expect these kids to have a high/low incidence of special education status? Just haven’t seen much info on this program. Thanks.
Here are three sources of information that will answer your question. There are many more on the internet.
Click to access SIB-RBFFact_SheetUtahVersion.pdf
Click to access fact-sheet-pdf.pdf
https://www.robinhood.org/metrics
I only know about autism. It has long been shown that the rate of autism spectrum disorders is consistent among socio-economic groups. So all else being equal, the percent of children on the spectrum in this program should be the same as that of any other similar program.
My question about this program is, is anyone doing long-term follow-up? Some disabilities may not be immediately apparent in pre-school. I can imagine Goldman Sachs is collecting bounties on children who are later identified with various learning disabilities, especially as the conitive demands increase through the grades.
But that is probably a feature, not a bug. I suspect they knew what they were doing when they zeroed in on this age range.
Could it be any clearer that Goldman & the banksters would prefer SPED students just go away. This is a fraudulent use of the Peabody Picture Vocabulary Test (PPVT) & a distortion of the principles of IDEA. The PPVT score is an indicator of the child’s receptive vocabulary development AT THE TIME it ‘s given. In children this young no single standardized test can predict future SPED services. Children may score low at age 3 or 4 but catch up when they are 8 yrs. old. We’re going to pay Goldman & the banks because kids learn as they get older?
Worse yet, Wall St wants to insert it’s greedy influence into the IEP process. According to IDEA the IEP team is the ONLY determinant of SPED services. IDEA specifically specifies who must be on the IEP team and the types of evaluations used in the process. Bankers & bond holders are not on the IEP team decision list.
So rather than expanding Head Start for all children congress is giving Wall St new products to securitize off of the backs of the disabled. If the banksters can’t rid their bottom lines of the unprofitable children with disabilities they’ll turn the financial screws on school districts and administrators to under-identify. Over time SPED numbers will decline by virtue of administrative pressures.
What kind of people think this is ethical or moral?
The point is that there is an incentive to keep them from qualifying for services even if they need special education services. The problem will just be magically ignored for a few dollars. The bankers will have their money and they are not accountable for quality, just avoiding special education eligibility.
Oh, this is too awful and too true.
It’s a rigged game and the investors know it. That’s why the USDOE is endorsing it eagerly.
The process of using RTI to identify special needs in children is onerous, time-consuming, and teacher-focused.
The behaviorist psychologists behind this start with the assumption of bad teaching and slowly work their way forward from there. Getting a student services is a Sisyphean task nowadays.
The popular’data’ says too many black males we labeled without looking at the possibility that long term generational poverty, dietary and medical care issues, and exposure to lead and in vitro teratogens may explain why this is so. The assumption is racism, which may very well be at play, but the result is that many poor black males are no longer qualifying for special services.
Moving to an all-inclusion model regardless of need or ability is another way of diverting resources from special needs children
Eventually we will see the expensive and perennially underfunded IDEA repealed and the money going to these vampire squid bond holders and other edupreneurs.
“Moving to an all-inclusion model regardless of need or ability is another way of diverting resources from special needs children.”
Well, considering that this country has more than enough wealth to easily provide proper services to all children it is appalling that we even have these discussions about divvying up an inadequate amount of that wealth among the most innocent and needy, the children of this country. But we lack the political will to make the changes necessary, first of which would be to vote out all, yes all of the bastards who have been entrenched for more than two terms.
Next, The corporate public sector demolition derby will offer bonds to push out combat veterans from the VA medical system that is also targeted for privatization just like the public schools.
For Instance, “How VA Privatization Can Improve Veterans’ Health Care” – Is there a way to find out who funds Task and Purpose.com?
“Privatizing the VHA would give veterans the same options in health care as every insured American. Certainly veterans have earned that advantage.”
My response as a vet who receives his medical care from the VA. This is pure BS! Everyone I know who received medical care in the private sector pay a lot more than I do for medical care through the VA.
http://taskandpurpose.com/how-va-privatization-could-improve-veterans-health-care/
In addition, “Democrats’ claims that a Koch-backed group wants to ‘privatization’ the VA.
“This is another part of the Koch brothers agenda. They’ve actually formed an organization to try to begin to convince Americans we should no longer have guaranteed health care, specialized care for our veterans. I will fight that as hard as I can. I think there’s where we can enlist the veterans service organizations, the veterans of America, because, yes, let’s fix the V.A., but we will never let it be privatized, and that is a promise.”
https://www.washingtonpost.com/news/fact-checker/wp/2016/02/10/democrats-claims-that-a-koch-backed-group-wants-to-privatize-the-va/
“Why Is the VA Suffering From a Lack of Resources in the First Place?”
The VA is also starving for funds thanks to the Republican majority in Congress and the neo-liberal allies in the Democratic Party. We all know that you destroy a public sector,first, by starving it of the funds needed to operate, and then use that as an excuse to get rid of it and turn it over to a corporation that will almsot always do a worse job while skimming off taxpayer money to fund profits.. The corporate public school demolition derby is doing this with public school districts across the country, and they are also doing it to the Veterans Administration.
http://www.thenation.com/article/why-va-suffering-lack-resources-first-place/
If we look closer, we will discover that almost every public sector is starving for funds and falling apart, but when the private sector takes over, it costs more and doesn’t deliver a better service.
The U.S. Forest Service is another example.
“New Report Shows Forest Service is Starved for Resources”
http://www.defenders.org/press-release/new-report-shows-forest-service-starved-resources
I think it is time that the defenders of the public schools reach out and form alliances with all of the other public agencies that are also under attack by the private sector and are being starved of resources caused by tax cuts for the wealthy/corporations and more tricks to legally hide money from any taxation at all.
We now have a private, for public prison industry that lobbies elected representatives for more laws with harsher sentences.
Public road are being turned over the private sector, for profit corporations that set up toll booths.
Hedge Funds are buying up ranches and farms that have free grandfathered rights to water sources along US rivers and then the Hedge Funds are cutting off the free water supply to others farther down river unless they pay for water they never had to pay for before. ProPublica reported on this earlier this week in a long piece.
Divided we will fall. United we will stand and beat back the forces of avarice.
http://www.privatizationwatch.org/
The military is also changing its pension system. Instead of a defined benefit, they are switching to a hybrid system of less defined and more of an IRA called TSP (Thrift Savings Plan). The result will cost the government about 20% less, but puts the burden more on the employee. This will most likely result in less of a social safety net for veterans. http://www.bankrate.com/finance/retirement/changes-coming-to-military-retirement-benefits.aspx
All of your examlpes are spot on. Social Impact Bonds, also called pay for success contracts are a relatively new financial product hawked by Harvard, foundations, and by Obama on behalf of the American taxpayer. Obama put $200 million itoward the launch of these products.
The first SIB/PFS contract was marketed for a program intended to reduce recivitism at Rikers Island. That program was a modest success with lots of face-to-face and mentoring. But the SIB required that the program be “scaled up” to make it an attreactive investment package. Not sucessful “as scale.” Nevermind.
The pushers of the investment said “we learned a lot.”
Next try, “high quality preschool.”
I worry about lawmakers simply taking funds from K-12 and reallocating to pre-k in complicated ed funding bills that no one reads.
I just really, really don’t trust these guys with public schools. They seem to want something for nothing, and I don’t believe that exists.
Duane, You are spot on with your comments! When possible, I don’t vote for incumbents who have been in office for a long time. I wish our elected officials would actually work for the people instead of their corporate masters. We might actually be able to get our country back on track if they did.
Imagine if the Obama Administration had focused on pre-k instead of spending nearly 5 billion dollars on measurement and ranking systems and ed reform experts.
Oh, well. I guess Democrats can run on it another cycle.
The Obama administration announced years ago on the DOE website that it was going to ask for about $75 billion or more to fund early childhood education but not until his last year in office–this year.
What a huge MESS! The greedy and entitled want ignorant citizens, though they spout the opposite. They want people who cannot think critically so they can continue to do their nasty deeds.
The DEFORMERS want to turn us, kids, and parents into Pavlov’s dog.
“Lloyd Lofthouse
February 11, 2016 at 11:53 am
The Obama administration announced years ago on the DOE website that it was going to ask for about $75 billion or more to fund early childhood education but not until his last year in office–this year.”
We actually have it where I live. It’s wildly popular with younger lower income parents. We’re building a new school financed the (now discredited) ‘traditionalist” way, where we persuaded people to vote on raising their own taxes to pay for it. The pre-k rooms are part of the K-12 school and they’re beautiful- prior to this the little kids were jammed into a building that went up in 1906 and was (literally) crumbling. I think people will be proud of it. They paid for it. They should be.
Off topic but, new to me- The Chair of the Texas Pension Review Board is Josh McGee, V.P. of Public Accountability for the John and Laura Arnold Foundation. There’s a comment form at the Review Board website.
Pay for Success will destroy Head Start, which is probably the goal.
I went to DC to provide testimony on Social Impact Bonds (Pay for Success) at the ESSA hearings last month. I wrote about that experience here:
.https://elfasd.blogspot.com/2016/01/julie-goes-to-washington-with-jamy.html It is truly disheartening to see SIBs sitting in the middle of a federal education law. Sen. Booker’s staff told me they hadn’t really even considered it because they had been told it would “only” be used as “pilots” in very few places. (yeah. right.)
I had written previously about it because I fully expected it to come to New Jersey as State Senator Ruiz is looking to pay for her pre-school initiative. She introduced a bill earlier this week calling it a “loan.” It’s not. It’s Pay for Success. Ugh. Wrote about that here: https://elfasd.blogspot.com/2016/02/pay-for-success-coming-to-new-jersey.html
Senator Booker relies on Wall Street to finance his campaigns
Indeed he does. He also hates being called out for throwing SWDs under the bus. So, I will continue to call him out.
Oh my, but how accurate your work to expose the Pay For Success (venture capital profiteering game) has become. Let’s ONLY fund those schools/programs which WE deem to be “worthy…”
This is a GENERAL trend for the Obama administration. The 3 tier system being used to determine/evaluate the level of services needed for students with or without disabilities is designed to avoid/delay providing services. The system is pregnant with the language of IDEA, but just like all things that lawyers/politicians (often one in the same) get their hands on, it is contorted to serve the agenda of the power elites.
I was a part of a program that was a pre-curser to this in the Grante School District a few years ago. The study had many problems but the one that I think applies here is the curriculum. The preschools used the same program that was being used for their kindergarten students. The kinders went a half day while the pre-schoolers went whole day. The teachers in both pre-k and K used the same TE and tests. Some pre-schoolers had as much as three years experience with the curriculum before entering kindergarten. The statistics showed that these pre-schoolers needed less special education services than the the non pre-school children. And my thought was I wouldn’t doubt it. They had three full time years (eleven months in the classroom compared to 9 months for the kindergarten children) to master the material. I guess that if you spend three years learning the kindergarten curriculum, you suddenly don’t have any specific learning disabilities.
My child own child went through early intervention in a different district. They claimed that he had made up all of his deficits by kindergarten. He did fine in kindergarten but made no progress in first or second grade. He went through numerous interventions with no progress. At his SEP in third grade, the teacher mentioned that she was doing interventions. At this point, I asked that he be tested for services. The school decided that he didn’t need to be tested as they were sure he wouldn’t qualify. They just knew his IQ would be too low. At this point, I began to look for help outside of the district. I asked for a copy of his file. I never did get his file, they had him tested and placed in less than a week. His IQ was in the gifted range. My blood still boils when I reflect on this. These practices really do prevent students from getting needed services.
I have seen this as a teacher as well. I personally know of two children who spent 5 years in intervention limbo. I know of another child who was going through so much intervention that she literally spent over half of her kindergarten day doing one to one interventions for letter and number recognition. Legally this placed her into the most restrictive environment for a full year without testing or parental consent. Additionally some of the teaching was provided by 5th grade students as the teachers were stretched to thin. Yes, I would say that the lovely state of Utah has a real concern for our children-not!
Thanks for this account of the program(s) that totally misjudged your child, and how the curriculum for K was just shoved down to pre-K and stretched to 3 years.