Both House and Senate versions of ESEA include Pay for Success and profits for Goldman Sachs. Act now.


Goldman Sachs CEO Lloyd Blankhein. Double back earnings for “curing” special education students.

-Bev Johns

Education Week blog:

The pending departure of Rep. John Boehner, R-Ohio, the speaker of the House seems to have lit a fire under negotiations on reauthorization of the Elementary and Secondary Education Act.

In fact, U.S. Secretary of Education Arne Duncan said Monday that it could actually “help” ESEA’s chances if Boehner stuck around for a few more weeks.

Aides for all four of the lawmakers that will be involved in crafting a “conference report” (that’s Congress-speak for a compromise bill developed after both the House and Senate have passed competing versions) have been working very, very hard behind the scenes to reach agreement. The key lawmakers here are: Sen. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., and Reps. John Kline, R-Minn., and Bobby Scott, D-Va.


As of now both the House and Senate ESEA bills include Federal funding for Pay for Success.

Below are actions YOU can take, and then my arguments for removing Pay for Success from ESEA as it is in Utah and Chicago aimed directly at vastly reducing special education (by 99 percent in Utah).

These are the parts of the U.S. House and U.S. Senate ESEA bills that need to be removed in the Conference Committee.

House ESEA (was No Child Left Behind): HR 5 – Student Success Act, Title II Subpart 1 Grants to States, Sec. 2113 (b)(2). “(F) support State or local Pay for Success initiatives that meet the purposes of this part.”

Title II Subpart 1 Formula Grants to States Sec. 2211 (d)(3)(A). “(ix) Supporting State or local Pay for Success initiatives that meet the purposes of this part.”


Senate ESEA (was No Child Left Behind): S.1177 – Every Child Achieves Act (1) allows states and local school districts to invest their Title I, Part D funds (Programs for Neglected, Delinquent, and At Risk Children and Youth, $47.6 million in FY15) in Pay For Success initiatives; (2) allows local school districts to invest their Title IV, Part A funds (Safe and Drug Free Schools and Communities, $70 million in FY15) in Pay For Success  initiatives; and (3) allows states to invest their early childhood coordination funds (Early Learning Alignment and Improvement Grants, newly authorized program) in Pay For Success initiatives


In the Conference Committee between the US House and the US Senate we must get Pay for Success out of ESEA/NCLB as it is now in both the House and Senate versions.

It can be done, but it will not be easy.

Have you made any contact with the National organizations that you belong to?

Have you contacted your own US Representative and your 2 US Senators?


In Conference Committee on S.1177, please remove Pay for Success as an allowable use of funds through Title I, Part D (Prevention and Intervention Programs for Children and Youth Who are Neglected, Delinquent, or At-Risk) and Title IV, which funds programs addressing student health and safety, from the Senate version of ESEA on the ESEA bill.


In Conference Committee, please remove from H.R. 5, the Student Success Act, the provisions that make Pay for Success initiatives an allowable use of state and local funds in Title II and in the Teacher and School Leader Flexible Grant.

Pay for Success has been used in Utah to prevent 99 percent of children supposedly headed for special education from actually being identified for special education, and paid Goldman Sachs and other investors for each child NOT placed in special education. This is a huge financial incentive to NOT identify children as needing special education, and there is absolutely no research stating 99 percent of students in special education should not be there.

In Chicago, Pay for Success may allow Goldman Sachs to double its investment, depending on how many students are NOT identified for special education.


Pay for Success reminds me of RTI (Response to Intervention) now often called MTSS (Multi-Tiered System of Support).

It sounds great, until you see what actually is happening in too many schools in too many States.

In an email discussion last week I received the following: “but from what I thought, Goldman Sachs and other investors get back money until the loan is repaid — and there is no big profit,just normal interest almost like a non-profit — but I may have it wrong”

I replied: You have it completely wrong. I had sent earlier a New York Times article on Utah, and a Catalyst (specialized education newspaper in Chicago) on CPS – Chicago Public Schools.

For Chicago, the deal is structured almost completely in Goldman Sachs (and their partner, the Pritzker Family Foundation – owner of Hyatt Hotels and of many other corporations) favor: almost no risk and possibly MORE than double their money back (more than 100 percent profit).

Read the New York Times article and Salt Lake Tribune articles on Utah.

Goldman Sachs is taking very little risk ($1 million is immediately paid back to Goldman by United Way) and with 99 percent of the students suspected of being eligible for special ed NOT being identified. Goldman would easily make more than double their money back (far more than 100 percent profit). Goldman is getting an immediate $1 million from the United Way? Not only will Goldman get public money each year that a student is NOT identified, but Goldman is getting charitable money immediately.

Non-profit Goldman Sachs? Hardly.

It is like getting $100 today and giving back $200 in public taxpayer money tomorrow.

Or having a credit card with a 100 percent interest rate. Identifying almost no one as having LD or any other disability is not progress.

Have you seen any program anywhere that has a 99 percent success rate?

Do you believe we can “cure” 99 percent of special ed children with LD or any other disability?

Or prevent 99 percent of children from having LD or another disability?

What would motivate a school district to NOT identify 99 percent of students earlier suspected of having a disability?

The answer ranges from the idealistic, I would say Utopian, to simple avoidance of Federal and State law and regs:

(1) they think (and say) that disability does not exist and now they are going to prove it and; (2) they really do believe (and say) that Each and Every child can be proficient on State or Multi-State tests and should be able to go to college: that special ed is counterproductive; (3) because they think it is the right thing to do for all children; (4) they think far too much is spent on kids in special ed when it should be spent on all kids; (5) this is a natural extension of RTI whose original promoters promised a significant reduction in identifications for special ed; (6) if a student is not identified as needing services under IDEA, the school does not have to provide specialized instruction, nor an IEP, nor an FBA or BIP even if needed, etc.; (7) if not identified, or if in RTI, the school is not subject to IDEA or its regs for that child, and neither the parent nor the child have any legal rights under IDEA .  

In fact IDEA so states.

(8) Another direct incentive for schools to non-identify is that they then are NOT subject to State laws and rules, such as any limits on special education class size, etc.

2 thoughts on “Both House and Senate versions of ESEA include Pay for Success and profits for Goldman Sachs. Act now.

  1. Curing kids that need special classes for LD? This is like “curing” an injured workers fractured disc with a shot of painkiller and then sending them back to work leading to further irreversible damage.

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