A Risk Worth Spreading

It’s no secret that the bank bailouts were largely a way of socializing risk while largely keeping the rewards in private hands. People on both the political left and the political right have raised legitimate concerns about these policies, with the elites, by and large, turning a deaf ear to the masses. But there is a risk that I believe everyone concedes needs to be spread over a much larger population. That is the funding for special education.

As the system now stands, local education agencies (LEA’s) are responsible for providing special education services to the students who reside within their district. Although a large portion of these services are not prohibitively costly, many are. This puts school districts in the difficult position of balancing requirements contained within SPED laws and their regular education services. LEA’s do receive state and federal dollars to offset some of the costs of SPED, but no one believes these funding streams are adequate.

A more just system would diffuse the costs over a much larger population. In the case of the US, that would mean allocating the costs of SPED to the federal government. This would ensure that LEA’s would not be forced to choose between providing appropriate education to its SPED students or its regular education students. In reality, there is very little choice. Schools often shortchange both parties in an attempt to split the baby.

How would such a system be structured? First, the only costs that ought to be borne by the federal government should be those above a certain percentage of the district’s per pupil cost. A system that merely paid out 100% of all costs above district average per pupil runs the risk of incentivizing LEA’s to over-provide SPED services, as they are not facing any of the increased costs. A reasonable starting point might be 150% of average per pupil, though this might be too low. It should be set at a level such that LEA’s are not facing exorbitant residential placement costs, but not so low that costs for more routine services are passed on to the federal government.

In addition, some sort of review process must be in place so that LEA’s are making reasonable decisions with respect to the services included in a student’s IEP. We should be careful that a student who might succeed in a mainstream classroom is not pushed off into a residential or other outside program, merely to reduce district enrollment and effort. This is probably the most difficult portion of the policy to get right. I’d imagine some sort of delegation by the US Department of Education to either state education agencies or some other contractor to provide evaluation services. But it still needs to be a process that respects the rights of the child and her family, such that an appropriate education is being provided.

Ideally, the payment system would be structured as a reimbursement as opposed to a grant. This would ensure that LEA’s are legitimately providing the services and placements. Given technological advancements, such reporting of claims for reimbursement would not place an excessive burden on LEA’s. It is also important that claims are paid within a reasonable time frame such that LEA’s and/or the municipalities in which they’re located are not disadvantaged, vis-a-vis cash flow.

None of these ideas are particularly new or even novel. We have known for decades that SPED funding is poorly designed. And that this structure needlessly pits SPED children and their families against LEA’s and regular education students and their families. There is simply no good reason for continuing such a flawed system.

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