|Mayor Rahm Emanuel, Goldman Sachs CEO Lloyd Blankfein and Warren Buffett|
Ben Joravsky wrote a devastating Sun-Times expose of Rahm Emanuel's promised expansion of Pre-K to about 2,600 new students. Melissa Sanchez at Catalyst also has an excellent piece. Still more must be asked about this curious program, which transfers about $17 million in public school money over to the big banks.
By guest blogger Susan Klonsky
Rahm's shiny new pre-K program contains a recipe for civil rights violations--especially against children with special needs. Buried within the loan agreement is an insidious incentive aimed at reducing the number of children who receive special-education services after pre-kindergarten.
The new CPS pre-K program will be funded with loans from Goldman Sachs, the Pritzkers, and other hedge funders and financial Houdinis. They're calling these loans “Social Impact Bonds” (aka SIBS).The Mayor boasted that the new pre-K program is chock-full of incentives for the lenders. Not just the unusually high rate of interest on the loan, which in itself is quite a tidy sum. My grandson will be paying for this loan when he’s a grandpa himself.No, there’s still more money to be made in the promised BONUSES for "success." In fact, this is called a Pay-For-Success loan. No bonuses to the schools or to the educators (as in so-called “merit pay” for high test scores). These are bonuses for the LENDERS themselves…on top of the interest they will receive.The bonuses are promised for supposedly measurable improvements in or reductions in certain outcomes. The announcement described them as follows:The SIB targets would be met with payments for each pupil who, after pre-K, does not get placed in a special education program ($9,100 per pupil), is deemed ready for kindergarten after pre-K ($2,900), and scores above the national average for third-grade reading ($750).The most egregious incentive is the one that reduces the number of special-needs students. For any child who, after attending one of these funded pre-K’s, does NOT receive an IEP or special education services, the lenders will rake in an additional $9100 per student.This deal brazenly incentivizes civil rights violations—indeed, it is all but a conspiracy to deprive young children of essential services to address special needs. For every kid who does NOT get a speech therapist or a classroom aide in elementary school—Ka-ching! 9100 bucks goes into the hopper for Goldman Sachs CEO Lloyd Blankfein and Chicago’s own Penny Pritzker.So whatever fast move Rahm thinks he’s pulling here to score some bread for his Wall Street friends, he’d better set something aside to defend against the lawsuits for civil rights violations against children with disabilities. They’re coming.