Yes, Social Impact Bonds. Again

By:  Julie Borst

Originally published on her blog here http://elfasd.blogspot.com/2016/08/yes-social-impact-bonds-again.html

 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 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 ForSuccess.

"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, 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.