CPS’ Pay for Success. Putting a face on it. Sadie Stockdale.

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Chicago Public School has adopted the Pay for Success program funded with Social Impact Bonds.

As I have written here before, Social Impact Bonds partner investors and corporate philanthropies in profit-making ventures in the public sector.

In a post written for this blog, special education advocate and activist Bev Johns wrote:

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.

And Catalyst reported:

When the first cohort of students enters kindergarten, CPS will begin paying the lenders for each fewer child who needs special education services when compared to the control group. CPS will pay $9,100 per child annually, an amount that increases by 1 percent each year.

Just to be clear: Goldman Sachs, a giant Wall Street investment firm, will receive over $9000 every year for each identified child that does not receive special education services at CPS.

When Sadie Stockdale came to CPS from her previous work at Teach for America where she was Director of Recruitment she came to do Goldman Sachs’ work.

From Sadie’s Linked In resume:


I thought you might want to see the name and face and past of the current education policy advisor to the Mayor.

14 thoughts on “CPS’ Pay for Success. Putting a face on it. Sadie Stockdale.

  1. With most of “reform” I can see how people can get sucked in – it’s carefully parsed to sound good on the surface and it can be difficult to explain why it’s actually bad in practice. But this? Who on earth thinks this sounds good, even on the surface? Paying a big Wall Street firm NOT to have kids in special ed? WTF?

  2. It’s not $9,000 a year per kid not referred. That’s the figure used in payment calculation, multiplied by the rate of control group sped participation v treatment participation. So the amount actually paid per student in principal & interest would be something like $450 to $680 per year. Still a dubious deal, however.

  3. Again, excuse me, but I thought we still lived in a democracy that followed a Constitution w/a Bill of Rights. (We also have F.A.P.E. & IDEA.)
    I didn’t know that we were becoming a country (!) akin to Chile & Argentina, in which people are/have been “disappeared.”
    Which is what will happen to children needing special services.
    ACLU, please.
    As foe what’s happening, you all might want to come to Naperville next weekend to the IL Council for Exceptional Children Fall Conference (refer to one of Fred’s previous posts, where you can access the link–you can still register). One Thursday strand (Legal Issues, the IEP & the Common Core) is all about sp.ed. & the laws, with programs from 9 AM through 5 PM.

  4. I can only utter my favorite phrase these days…”Wow!”
    Another wonderful individual who purports to be an “educator who is for the kids,” brought to courtesy the folks at Teach for America.
    Lee R. Talley, Proud Retired Educator: “Money is the root of all evil, but greed is what takes you there”

  5. The point of the financial shenanigans is to get loans up front to fund programs which, in principle, should help kids while they’re young so they are more successful in school and don’t end up needing costly special education services later. Sounds good except for a few really problematic issues.

    1. Creating an incentive to keep kids in the treatment group from getting SpEd services might keep kids who need services from getting them.

    2. Creating an incentive to push kids in the control group into services might cost CPS lots of money and put kids in more restrictive environments than they need.

    3. I assume this is double blind so no one should be able to see which kids are in which group… but I don’t trust the financial wizards at Goldman or the “education” wizards at CPS to maintain the integrity of this experiment for the decades it will be going on.

    4. Rahm, the Board of Ed and the wizkids at Goldman should be experimenting on their own kids if they want to do experiments… not on the most vulnerable kids in the city who are living in the deepest poverty.

    5. If, in fact, the “return on investment” in early interventions is good enough for Goldman to make massive profits, shouldn’t CPS invest funds in it and let the taxpayers and CPS students reap the rewards without creating any perverse incentives? If we can’t borrow the money to do so, let’s stop opening new charters, paying for dubious standardized tests, funding useless Network Offices and Central Office departments. See http://ilraiseyourhand.org/content/parent-group-raise-your-hand-blasts-cps-budget-priorities-%E2%80%93-cuts-disproportionately-hit and http://ilraiseyourhand.org/content/solutions-cps-budget-crisis Rahm and CPS could also fight for fair revenue solutions… but it’s easier for them to point fingers at Springfield… The Rahm, Rauner fight if pure political theater that they plan laugh about over a bottle of $10,000 wine a few years down the road.

    1. No one considers giving additional funding to CPS to be a good option.

      This is “free”. Worst case the money shifts from the CPS special ed program to Goldman, but it’s not additional money.

  6. This is the Wall Street game. Hey, do you know how hard it is to find high risk-free returns in this zero interest rate environment which was caused by their very own greedy criminal behavior? They’re getting junk bond returns at no risk.
    First, the banks turn the city into a subprime borrower by advising them to enter into sh*tty bond deals, causing huge chunks of revenue to go towards servicing the debt instead of running city services. Then they come up with this stupid idea to “help” fund education that the city can no longer afford because they have to service the crushing debt the bankers convinced them was such a great idea in the first place. Is there anyone in city hall who can actually read a prospectus or a contract? Or are they all complicit?
    This is a predatory scam, just like every other scheme the banks have come up with lately.
    Where’s the SEC and the DOJ? Are they going to allow these vultures to team up with corrupt politicians to bring our cities to their knees and take them over one at a time?

  7. Theoretically, if you provide high quality reading interventions in K-1 to the lowest 20% of students, you can reduce the need for special education services by 15%. That is why schools can legally divert 15% of special education funds to RTI. As far as I know there is no research showing that a particular intervention can cut the need for services by 99%, but I would love to know more about that.

    I am all for kids not *needing* services, but high-quality interventions are not cheap. This would not be a cost saving move. What magical, free/cheap, super-effective interventions are they using?

    Finally, how do they determine if the students in the group do not need services? What assessments are they using? What guidelines are in place for interpreting the data?

  8. cocopop–this is late, but hope you see this. Do you have a child in sp.ed. or have you ever been a sp.ed. teacher? As one for over 35 years, I can tell you that schools (or should I say students?) have been put through the mills on this one. First of all, R.T.I. (Response to Intervention) is all over the place–in ILL-Annoy, & everywhere else in the country, as evidenced from comments by parents & speducators on Diane Ravitch’s & other blogs. R.T.I. is–like Pear$on Publi$hing–TOTALLY unregulated; timelines are mostly made up, &, in the school district I used to teach in, the process could take up to 2 years (because, from one year to next, the identification through R.T.I. had to begin all over again–that is, unless teacher(s) called the parents {& that, my friends, is one reason we have teacher unions, so we can do these sorts of things for our kids w/o fear of being fired!} & told–er, asked them to call the district office and ask–er, demand–that their children be tested already! I’m retired, but I see, know & talk to many active public school speducators, & it hasn’t gotten any better.
    In fact, it’s worse–much, much worse.

    Oh–& to answer your last 3 questions: they don’t, zip & zilch.

    1. I am a special ed teacher and my son has an IEP. In Oakland, CA we don’t have the funding for RTI.
      We just have SST and interventions are virtually nonexistent, so my perspective is slightly different, but I think we agree that Pay For Success is not to be trusted. 🙂

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