Education Funding

How Can ‘Pay for Success’ Models Support Special Education?

By Christina A. Samuels — April 27, 2018 2 min read
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Many school-focused “pay for success” funding models—a term for private investment in public programs with the prospect of financial gains—have to date focused on reducing a school district’s special education costs.

For example, investors may pay for preschool programs aimed at children from low-income families, who have a higher likelihood of being identified with disabilities. The fewer children who are identified, the more a district “saves"—and a portion of those unspent funds is returned to investors.

But is holding down special education enrollment the only goal that pay-for-success programs, also called social impact bonds, should aim for?

Rather than envisioning special education solely as a placement to avoid, pay-for-success models offer an opportunity to support special education in other ways, says a brief from the Institute for Child Success, a South Carolina-based research and policy organization.

One major concern about using special education as the primary way to evaluate a pay-for-success model is that it offers an incentive to game the system by keeping children away from special services, even if those children qualify. The federal government, which is funding pay-for-success feasibility studies, has stated that such programs must have safeguards to prevent the prospect that children are underidentified for special education.

But there are other potential models to explore, according to the brief. For example, pay-for-success models could focus on inclusive preschool programs, where children who have disabilities are educated with their typically developing peers. Research into a preschool program for autistic and typically developing children shows that both groups make positive strides on social and behavioral skills.

Private investors could also pay to expand a school district’s special education identification services. Under the Individuals with Disabilities Education Act, every school district is responsible for evaluating children within their boundaries and providing services if necessary. The IDEA calls this process “child find.” Even though expanding Child Find would likely mean more children identified for special education, catching problems early may mean less intensive—and expensive‐interventions in the future.

Megan Carolan, the director of policy research for the Institute for Child Success and a co-author of the paper, said her organization’s goal is to expand the conversation around pay-for-success models, which are still in their infancy.

“This is both the folks who are coming in with a pay-for-success background and really no special education context, and special-ed folks who are saying, ‘How is this going to help the kids I care about?’ ” Carolan said.

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A version of this news article first appeared in the On Special Education blog.