Financial Incentives for Special Education Placements

Greene & Forster (2002) have reported on one “cause” of the exceptional growth of special education enrolments — financial incentives: “This report examines the effect state funding methods have on the number of students enrolled in special education. It finds that states with “bounty” funding systems provide financial incentives to schools to increase the identification of students with special needs by paying schools more for each additional student in special education. The authors find that those incentives are responsible for 62% of the increase in special education enrollment in those states over the past decade. Nationally, the report shows that this has led to roughly 390,000 children wrongly placed in special education programs at an annual cost of $2.3 billion. The authors also find that high-stakes testing, which has been suggested as an alternative culprit for the increase, has no significant effect on special education enrollment.”

Market in the 18th, Paris

This is a big picture report. How do financial decisions trickle down to school psychologists and SLPs? They maintain professional standards and bring these standards into eligibility and IEP meetings? No one tells them, “The district needs money?”

It is unclear as to the roles local school superintendents have along with school boards in signaling to special education workers that they should liberally accept children into special education. Almost certainly this is an implicit communication process. Special education directors somehow might facilitate over-placement for financial gains. No LEA educator would ever admit to being a part of a “bounty system” as Greene and Forster call it. No professional organization would advocate for increased growth of pupil placements for financial reasons. A pupil must have a disability to qualify for special education.

IDEA 2004 included provisions to address the issue of unfortunate financial incentives for placing at-rist children in special education (Alliance).

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