Yes, Social Impact Bonds. Again.

I've written about Social Impact Bonds, aka, Pay for Success (PFS) before. You can read those blog posts here, here, and here. I provided testimony on Pay for Success to the US Department of Education (USDOE) in Washington DC at the Every Student Succeeds Act (ESSA) hearings. That testimony you can find here. 

This past Friday, August 19th, USDOE announced a Preschool Pay For Success grant competition. Instead of, y'know, actually funding a preschool initiative, USDOE has set aside $2.8 million dollars to go to "7 to 14 grantees" who will have the great privilege of conducting feasibility studies, not on the effectiveness of high quality preschool (we already know that works), but on the effectiveness of PFS. States will have to go out and find partners and then use the USDOE money to fund studies...studies which one really hopes states would have done on their own anyway. 

"The ultimate aim of the pilot is to improve early learning outcomes through a future high-quality Pay for Success project by providing grants for feasibility studies. However, the pilot does not fund the implementation of preschool services. Preschool programs that are the focus of these feasibility studies must be inclusive of children with disabilities and the Pilot will also establish safeguards to protect the rights of children with disabilities to ensure that they receive the services they need." (emphasis mine)

Who knows? Maybe they were listening to me last January. I'm very interested to see what those "safeguards" are beyond what the law already prescribes, because that shouldn't be ignored under any circumstances. Right? 

To backtrack for a second, there are Preschool Development Grants (and Expansion Grants) available through USDOE. In 2014, several states, including New Jersey, received those grants. Here's a brochure from the program. You'll notice that "high quality" programs are necessary for receiving the 2-year grant. 

Now, take a look at the program description for Pay For Success. 

"This pilot does not limit feasibility studies to programs that meet the definition of “high-quality” preschool used by the Preschool Development Grants (PDG) program in its 2014 grant competition in order to allow the PFS demonstrations to demonstrate high-quality in different ways, including through the impacts that the pilots are able to achieve. In this way, such projects could further develop the evidence-base of programs that are demonstrated to be effective." (emphasis mine)

*Sigh* Let's understand that statement for a moment. USDOE recognizes that "high quality" preschool programs are necessary and work. They are trying to find a way to help out their friends in the banking sector by attempting to justify the use of Pay For Success programs while also desiring successful outcomes for students. They want to demonstrate the cheaper-for-the-taxpayer-to-achieve-great-results-ness of PFS, but the studies USDOE will be paying for do NOT need to include "high quality" preschool programs. 

Surely there's a really good reason for that, I am, though, currently at a complete loss of what that might be. Anyone from USDOE is free to shoot me an email at any time. Or, maybe Mike Hynes can ask John King when he finally is granted an audience.

I'll simply say, Pay For Success is a terrible idea. In this context, our children's education is at stake. There has been a specific narrative from those pushing these programs. It's unconscionable that Pay For Success is sitting in the middle of a federal education law. I'm not alone in that thinking. 

Yesterday, Kenneth Saltman published an article called "Wall Street's Latest Public Sector Ripoff: Five Myths About Pay For Success" and it's a doozy. Please take the time to read it. I'll give you a teaser on Saltman's reason for the existence of PFS programs:

"Banks love Pay for Success because they can profit massively from it and invest money with high returns at a time of a glut of capital and historically low interest rates. Politicians (especially rightist democrats) love Pay for Success because they can claim to be expanding public services without raising taxes or issuing bonds and will only have the public pay for “what works.” Elite universities and corporate philanthropies love Pay for Success because they support “innovation” and share an ethos that only the prime beneficiaries of the current economy, the rich, can save the poor."

In the context of preschool and how PFS has been used to theoretically lower the rate of special education classification of children entering kindergarten, I could not agree more (and I said as much, months ago) with this: 

"Who is authorized to develop the metrics, what is their expertise, what are their interests, and how do they assess the rules they set in place?; To whom are those legislating the accountability measurements accountable? The scientism of metrics obscures these kinds of questions. Accountability should be a part of educational projects but not through restricted metrics that conceal the broader politics informing the project. Rather, accountability should be in a form in which knowledge is comprehended in relation to how subjectivity is formed through broader social forces and in ways in which learning can form the basis for collective action to expand egalitarian and just social relations."

If your state is entertaining using Social Impact Bonds/Pay For Success to pay for preschool, please, I beg you, have those conversations with your legislators. Know exactly who is determining the criteria for success and how the money will be paid back and to whom. 

Pay for Success Coming to New Jersey

This is truly one of those moments when I wish I hadn't called it, but here comes Pay for Success. John Mooney at NJSpotlight posted this story this morning. State Senator Ruiz has introduced two bills to pay for a new pre-school initiative. 

One involves the dedication of $103 million of state money. Read the full text of the bill here. The other bill is called “Early Childhood Innovation Act”. I love the names given to these things. Anyway, it's a "loan pilot" program. Let's call it what it is: Social Impact Bonds aka Pay for Success. You can read the full text of the bill here.  

I'm not going to go into all the reasons of why Social Impact Bonds are a terrible "solution" for New Jersey. I've already written about and testified against it. You can read all of it here, here, and here.

Keep private money out of public education. Do we need high quality preschool in New Jersey? Yes. Absolutely. What we don't need is Wall St. paying for it with the promise to earn that money back on the backs of our youngest and most vulnerable citizens. 

We ALL deserve better than that. 

Edited to add: Revised bill S973. 

Julie Goes to Washington with Jamy, Marla, and Melissa

Last Monday, the US Department of Education held the first of two public testimony hearings on the Every Student Succeeds Act (ESSA). This hearing was held in Washington DC. The next will be in California. Short notice, with release just before the holidays, felt like timing was meant for parents and teachers to miss it. I was not off to a warm and fuzzy feeling about it. 

I didn't see the agenda for the day until after I checked in at USDOE. The speaking order and the approximate times for each of the three sessions were listed. The list of speakers was, predictably, the who's who of education reform -- just off the top of my head, several hundred million dollars or so in Gates funded associations. Disheartening to say the least. From what I can gather, only one other "just a parent" spoke that day and three actual teachers, two from New York (Jamy Brice-Hyde and Marla Kilfoyle) and one from New Jersey (Melissa Tomlinson). 

                                       

                                       

It really was difficult to decide what aspect of ESSA to discuss. From a special ed point a view, ESSA makes NCLB look lenient. The 1% cap on alternate assessments for students with disabilities is particularly cruel. It's also the fuel needed to continue to encourage opting out of these stupid tests. 

I decided, though, to talk about Social Impact Bonds. Sorry if you're getting bored with this topic, but I don't think it can be argued against enough. An experiment, which requires a negative outcome (NOT classifying students) to be considered a success, has no business sitting in the middle of a federal education law. 

Here is my testimony: 

11 January 2016

Testimony on the Every Student Succeeds Act (ESSA) to US Department of Education  

My name is Julie Borst and I’m resident of Bergen County, New Jersey. I am a mother to a 17-year-old student with a disability. I am a parent advocate and an organizer for Save Our Schools New Jersey, Opt Out NJ, and for BATs in Special Education. My comments today are my own. 

I have to admit, it was difficult deciding which section of ESSA to address today. While many are cheering the change from No Child Left Behind (NCLB), I’m feeling much more cautious. As a family, we have not had good experiences under NCLB. It was clearly in serious need of revision, and I don’t believe that ESSA really aleviates the myriad problems with NCLB, particularly for students with disabilities. 

Among the worst, the onerous standardized testing continues. More students with disabilities will be required to take irrelevant, developmentally inappropriate tests. Local districts will continue to waste precious dollars on infrastructure to support these tests, and for what? That’s a conversation that could go on for weeks. Let’s just say, that from where I sit, as a parent and advocate, the tests are a waste of time and money. Well trained, dedicated professional educators are what’s needed. Not more tests. 

However, the reason I’ve come here today is to talk about Social Impact Bonds, otherwise known as Pay For Success (PFS)¹, ESSA page 797, line 17. The current landscape in special education is a dire one. In states like New Jersey, it has become increasingly difficult for parents to get appropriate identification, classification, and services for their children. OSEP and OCR have become yet another roadblock to appropriate services.
I believe the root of that difficulty is money. IDEA is poorly funded, as it has been since its inception. Money now is spent on everything related to high stakes testing – prep, massive curricula changes, computers, infrastructure, and teacher professional development geared to use of that technology instead of honing the skills of their profession.

In New Jersey, there is a more formalized process, Response to Intervention (RtI), on the horizon. A program that will make it even less likely for a student with a disability to get timely identification, classification, and services. There appears to be little, actual focus on identifying learning disabled students as early as possible and doing something about it. 

Preschool, “high quality” preschool, has become the new mantra in that vein. Studies show that high quality preschool can reduce the percentage of the students who go on to kindergarten and are then classified for special education. Those percentages are anywhere from a reduction of 10% to 50% of students who would have otherwise needed special education services. The impact is clearly a positive one. 

It does makes sense to support high quality preschool. What doesn't make sense is for private investors or Wall St. to fund those preschool programs with the aim of making money off students NOT being classified. 

Pay For Success is use of private money invested into public programs, in this case public preschool. The program, first tested in Utah and now in Chicago, was funded by Goldman Sachs. The program in Utah was claimed to have a 99% “success” rate. 109 of the 110 students identified as “at risk” or possibly needing special education, out of a group of 600 preschoolers, did NOT require special education. Goldman Sachs received money back for every one of those 109 students and will continue to do so for every year those 109 students are NOT classified for special education, through 6^th grade. 

To be perfectly frank, this raises a lot of questions. What was the starting criteria for those students? What diagnostic tests did they use? Medical history? Demographics? How many students would have likely had to have special education if they didn't have the "high quality" preschool experience? How many would they expect to classify even with the experience? What is "high quality" preschool? What does "high quality" preschool cost? How much does Utah spend on preschool? What is the threshold that has to be met for Goldman Sachs to earn its money back? Who would have covered the costs is the program “failed”? 

In Utah’s case, only one test, PVVT, was used. It’s not normally used, especially by itself, to identify students for learning disabilities. English language learners typically do not do well on this test because it is vocabulary based. It doesn’t necessarily mean they have a disability. From the outset, the criteria presumed all 110 “at risk”-identified children were going into special education without the high quality preschool. That is not a valid presumption.
There is also the issue of cost. High quality preschool costs are general 3-4 times what Goldman Sachs invested per student. It’s still not clear how the “high quality” label was actually executed, as some of the students were apparently placed in daycare.  

Utah set the rubric, but they also would have had no preschool at all without the program. Why were they allowed to set the bar so low and so obviously skewed to have this as a win for Goldman Sachs? Perhaps more importantly, what is Utah doing to ensure those “success” students were, in fact, properly NOT identified for special education? 

I understand that on the surface Pay For Success sounds wonderful. Public money, that is already so lacking, will not have to be used to fund preschool programs. However, “success” based on a negative outcome of our most vulnerable students demonstrates the loss of our moral compass. 

Pay For Success has no business being in a federal education law. There are too many unanswered questions. Too many ways for this program to go very wrong for our most vulnerable students – especially in the current environment. There is no magic pill to cure learning disabilities, but there are many well-documented, teacher-driven practices to address identification, classification, and delivery of services. We should be concentrating on those, not on making Goldman Sachs richer at our children’s expense. 

¹ p. 797
17 40) PAY FOR SUCCESS INITIATIVE.—The

18 term ‘pay for success initiative’ means a perform-

19 ance-based grant, contract, or cooperative agreement

20 awarded by a public entity in which a commitment

21 is made to pay for improved outcomes that result in

22 social benefit and direct cost savings or cost avoid-

23 ance to the public sector. Such an initiative shall in-

24 clude—

p.7981 ‘‘(A) a feasibility study on the initiative de-

2 scribing how the proposed intervention is based

3 on evidence of effectiveness;

4 ‘‘(B) a rigorous, third-party evaluation

5 that uses experimental or quasi-experimental

6 design or other research methodologies that

7 allow for the strongest possible causal infer-

8 ences to determine whether the initiative has

9 met its proposed outcomes;

10 ‘‘(C) an annual, publicly available report

11 on the progress of the initiative; and

12 ‘‘(D) a requirement that payments are

13 made to the recipient of a grant, contract, or

14 cooperative agreement only when agreed upon

15 outcomes are achieved, except that the entity

16 may make payments to the third party con-

17 ducting the evaluation described in subpara-

18 graph (B).’’;

Marla's Testimony:

Testimony of Marla Kilfoyle

Thank you for allowing me to offer my recommendations and advice on Title 1 of ESSA

My name is Marla Kilfoyle.  I have been a public school teacher for 29 years.  I have taught in Rural, Urban, and Suburban school districts.  I have a Masters in Education and am National Board Certified.  My proudest role, however, is  that I am a mother of a child with disabilities enrolled in public school in New York. 

Here are my recommendations and advice:#1 We need to fund Title 1 with more money.  We have seen, over the last decade, more and more of our children living in poverty.  I applaud that the bill increases funding for key formula grant programs. The increases overall of funding by 2 percent each year in 2018-2020 is hopeful. Increases in Title I ($1.2 billion over the 4 years of the authorization), a more than a 20 percent increase. We applaud the increase in authorizations for Title III (English Language learners), Title VI, American Indian and Alaska Native programs and Impact Aid are excellent. Increases in the Mckinney Vento leave us hopeful that our homeless children will be serviced and supported but we will need more.

#2 I have concerns that “personalized learning “ will be a vehicle for students to be placed in front of a computer screen all day or have them moved out of their public school to a school that is not housed in their community.  This school could be an online learning center or a charter school; both which have been proven not to be beneficial over a strong public neighborhood school.    Why should children have to move out of their community school to be educated?  We need to support strong sustainable public schools in the communities that our children live.

#3 I  am vehemently opposed to testing children each year in grades 3-8 and once in high school.  We are the only nation that demands this of our children.  Grade span testing by random sampling will allow more time for learning.  We have done this successfully using NAEP.  Testing has depleted much needed funds for our children in need.  The only people that testing every year benefits are the testing companies.

#4 I also do not agree that our ENL/ELL populations should be subject to multiple statewide interim assessments during the academic year.  This, once again, results in more testing and less learning for our non-English speakers.  What we are seeing for our ELL students is less time with their ELL teachers in instruction to teach them to speak/acquire the language.  The drive to get them ready for a test at the end of the year that they are not yet ready to take, due to lack of language, is abusive and inappropriate.  Although pushing them into classes with their English speaking peers is excellent, there must also be a balance of making sure that we are giving them the instruction that they need to acquire the English language.  This has been taken away from them in many districts across the nation.

#5 I am opposed to computer adaptive assessments listed in the Act.  I feel that testing and technology companies put together inferior products, sell them to districts to make money and now districts are left with inferior assessments and no money.  I am also opposed to the idea of  ‘innovative assessment system', as outlined in Part B Title 1, that could be used as assessments in school districts.  As educators, we have seen technology companies and testing companies pillage the coffers of public education with products that are inferior and do not enhance teaching and learning.  This is not what America wants for its children.  We do not want our classrooms to become places in which children sit in front of a computer for several hours a day and the teacher becomes just a facilitator.  We see a need for technology and to make sure that our students are using it to enhance learning but it should not replace the human interactions that they need in the classrooms to become productive global citizens.  

 #6  Finally from Part A of Title 1 I feel that allowing alternative routes to certification will only guarantee that our neediest children will get the least trained, for example, Teach for America.  We should require every teacher, in every classroom to be fully licensed and accredited from a strong college education program. 

In closing I would like to take a few moments to also address the letter that the USDOE sent on Dec. 22^nd  to the Chief School Officers in states that had high test refusal rates.  The letter, which threatened to withhold Title 1 money for states with high test refusal rates, was absolutely deplorable.  As Mr. King knows from his tenure in NYS, standing between a parent and the decisions that they choose to make for their children is not a good idea.   To create conditions where a local school district must pressure parents into making decisions they do not want for their child is not good for the positive relationships that school districts need to create in order to work cooperatively with parents. 

Thank you again for your time and consideration. 

The End of Special Education Part IV

This is really Social Impact Bonds (SIBs), aka Pay for Success, part 2. 

It seems that NJ Senator Teresa Ruiz, Chair of the NJ Senate Education Committee, thinks that SIBs may be a way to pay for the Committee's vision of Pre-K in New Jersey. Tuesday morning I heard a clip of Senator Ruiz on WBGO's news report. My jaw dropped.

Senator Teresa Ruiz says one recommendation is establishing a five-year pilot program allowing the private sector to pay for expanding early childhood education and then receive a portion of the state savings from that investment.

“It allows for programs to really develop more quickly because the funding is there, and certainly, later on, what we can look for is we will save money because we won’t have to have early-intervention programs and classification and wrap-around services because we did the work early on.”

Just. No. 

I wrote about SIB's here, but let me recap. Goldman Sachs funded a SIBs program in Utah. They claim a 99% "success" rate. In other words, 99% of the 3- and 4-year-olds who went through their funded program did NOT require remedial help or special education classification. Goldman Sachs received $260,000 in payment for those 109 out of 110 students. And will continue to receive payment for every year those students are NOT classified for special education. 

You know there are going to be questions, really basic ones, when you see "results" like that. Presumably, Senator Ruiz heard about those results and did not look further into the inevitable questions about the validity of those claims. 

What was the starting criteria for those students? What tests did they use? Medical history? Demographics? How many students would have likely had to have special education if they didn't have the "high quality" Pre-K experience? How many would they expect to classify even with the experience? What is "high quality" Pre-K? What does "high quality" Pre-K cost? How much does Utah spend on Pre-K? What is the threshold that has to be met for Goldman Sachs to earn its money back?

The NY Times DealBook took an unusual and distinctly skeptical look at the program.

A few weeks ago, Senator Ruiz held a hearing on Pre-K. All of the usual associations were there to provide testimony. All agreed that "high quality" Pre-K is essential to a good start in elementary school. It is even more important for children from certain demographics to have these experiences. 

A Rutgers professor of economics, Steven Barnett, testified that "high quality" (he put great emphasis on that) Pre-K could mean as much as a 50% reduction in the need to classify for special education, BUT that most studies show a 10-20% reduction. That is considered to be very good. In this context, 99% is not even statistically possible. 

So, how much did Goldman Sachs spend per student? A measly $1700, not even enough to cover part-time costs of daycare. Pre-Ks used in successful studies spent 4 to 5 times that amount. Again, what exactly is "high quality" Pre-k? Sounds like Goldman Sachs got off cheap.

Goldman Sachs also only had to achieve a 50% reduction to in order to make back their investment, plus 5%. What's unclear and I haven't found out yet is, who would have picked up the tab if the program "failed" and only achieved a 10% reduction? Would Utah have been on the hook for that? Or, would Goldman have simply written it off? Can we please acknowledge that no Wall Street firm is going to enter into a deal like this if they didn't expect to make money?

I'm also not sure what the point of bringing in Wall Street was. Utah, previously, had no Pre-K program. They didn't really even know what the costs are. Usually in Pay for Success, you're trying to show a savings on the government side...which is why in places like Texas, this kind of program has not worked with daycare. You simply can't show great savings if you're not spending any money on it in the first place. 

Now for New Jersey. What is Senator Ruiz attempting to achieve? Her statement, "we won’t have to have early-intervention programs and classification and wrap-around services because we did the work early on" is naive at best and potentially destructive at worst.  

"High quality" Pre-K is not a magic bullet. Students with disabilities will not be magically cured by attending preschool. It sounds too good to be true because it is. New Jersey's classification rate is about 14.5%, higher in low-income districts where this program will take place. 

Will preschool help decrease the percentage of students who need special education services in those districts? I have no doubt that it will. The research supports that presumption. 

Are you going to end the need for Early Intervention, classification, and wrap-around services? No. You aren't. There will always be students who would have been classified no matter how much preschool they had. There will always be students who need wrap-around services because we, as country, much less as a state, are doing nothing to address the poverty that creates the need for these services.

Big picture here is, Goldman Sachs is going to make money on students NOT being classified. RtI is going to become the framework for K-12, delaying as long as possible the identification and classification of students with disabilities. And the Special Education Ombudsman position the Senator is trying to create (because constituents have been begging for help) will work for the NJ Department of Education. 

This does not look good for the students with disabilities in New Jersey. Parents, it's going to be a really interesting (read: ugly) ride while all of this plays out. We don't need a system that further works against students and their families. Find another way to pay for preschool that doesn't involve a negative outcome on our most vulnerable students.

The End of Special Education Part III

Social Impact Bonds, aka Pay for Success. Both terms sound so innocuous. Nothing could be further from the truth.

In the special education world, everyone, including Goldman Sachs (yes, that Goldman Sachs), is trying to reduce the number of students who are formally classified with a learning disability. As we have just celebrated 40 years of IDEA and its success at requiring all children have a free and appropriate education, programs like Pay for Success, are especially heinous.

While there are a fair number of studies on the impact of high quality pre-school on the number of students who later do not need special education services. The range of success is varied, but still a 10-50% reduction is really big. It does makes sense to support high quality preschool. What doesn't make sense is for Wall St. to fund those pre-school programs with the aim of making money off students NOT being classified.

This has already been done in Utah. Goldman Sachs claimed a 99% reduction in "at risk" students being classified. 99%. That cannot possibly be correct. Even if you only use, say, NJ's average of a 14.68% classification rate, that 1%  rate is simply not possible. Goldman Sachs got paid for every single one of the 99% AND they will be paid every year those students are not classified.

Does anyone think, even for a second, that Goldman would enter into a contract where they did not expect to make money? I can't wait to see the long term outcome on this. How many of those kids will actually need services later because they were sold out in pre-school?

Look, I get the public-private partnership idea. In some cases, it may make sense. However, when public education is involved, in our current climate of selling it off to the highest bidder, while looking for some magic pill to "fix" everything, literally selling out our special needs (any!) kids is not acceptable.

And yet, Pay for Success may be here to stay because it is included in the rewrite of ESEA. We've been given about 48 hours to review the entire document before it goes to a vote in Congress. The very first thing I did was a search for the Pay for Success term. And, sure enough, it's in there.

Let me channel my inner Nancy Reagan: Just say NO to ESSA.

We need time. We need educators and parents to weigh in on the rewrite. We need to be sure that this law is supporting public education for all children in this country, not Wall St. firms, not charter school companies, and not testing companies.

Our children deserve so much better than this.