Magazine | October 19, 2009, Issue

End the Special-Ed Racket

Vouchers can reduce false diagnoses of learning disabilities while helping both the truly disabled and the misdiagnosed

Your fourth grader is struggling in school, and you aren’t sure why. At his teacher’s suggestion, you hesitantly agree to let the school district test him for a learning disability. If he has one, they tell you, he will qualify for additional instruction through special education. You assume that the school district’s decision will depend entirely on whether your child is actually disabled.

Unfortunately, the district may take into account more than just your child’s condition. A growing body of evidence indicates that much of the tremendous growth in special-education programs across the United States is the result of financial and other incentives, rather than a true increase in disabilities. But new research also suggests that school vouchers targeted to disabled students could reduce this artificial growth, saving taxpayers money and keeping kids from the sting of being mislabeled as disabled.

Between 1977 and 2007, the percentage of students enrolled in federally supported disability programs increased by more than two-thirds. Such programs now serve 13.8 percent of public-school students in the U.S. Much of this growth has come in a single category known as Specific Learning Disability (SLD), which includes conditions such as perceptual handicaps, developmental aphasia, and dyslexia. In the last three decades, SLD diagnoses have increased from 1.8 percent to 5.4 percent of all public-school students. They now account for 40 percent of students in special education.

Since special-education students cost more to educate, growth in special-education rolls has been blamed for a substantial portion of the increase in public-education spending. For instance, New York State spends an average of $14,413 per year more to educate a disabled student than a regular-enrollment student. Most taxpayers are willing to pay extra to ensure that disabled kids get the services they need. But what if not all of these kids are really disabled? Not only would that be a waste of money; it would harm truly disabled students by overburdening the resources that are meant to serve them and mixing them with students whose educational needs are very different.

In most states, schools receive additional resources for each student placed into special education. Schools therefore have an incentive to label marginal students as disabled if doing so will bring in more money than it costs in additional services. Research suggests that schools respond to such incentives. For instance, the University of California’s Julie Berry Cullen found that financial incentives to diagnose students as disabled explained as much as 40 percent of the growth in special education in Texas during the early 1990s.

Financial incentives are particularly important in low-level disability categories like SLD, where a diagnosis is easily fudged. While you need pretty solid evidence to diagnose a child with a traumatic brain injury or other severe disabilities, schools have plenty of leeway on SLD. Some research suggests that public schools use low achievement alone to serve as an indicator of SLD. Studies dating back to the 1980s found that SLD students are indistinguishable from low-achieving regular-enrollment students, with one study estimating that over half the students identified as SLD in Colorado did not fit either federal or state definitions for SLD.

The idea that schools benefit financially from increasing their special-education rolls doesn’t square with what most people have been told. In fact, school systems frequently complain that special education is a drain on their resources. Yet while special-education services do impose costs on schools, most states provide substantial additional revenue for each diagnosed student; in many cases, this more than covers the cost. Further, not everything spent on disabled students is an expense. For instance, schools might already offer group instruction focused on reading skills to students who are behind. If they’re regular-enrollment students, it comes out of the school’s budget. But if those students are diagnosed with an SLD, the services are subsidized by the state and federal governments. So while the school’s costs might not change significantly because of SLD diagnoses, its revenue would.

Shifting non-disabled students into special education does them substantial harm. Misidentified students are unnecessarily stigmatized, and the diagnosis encourages the student, the school, and even the parents to lower their expectations. And labeling students who are merely struggling as disabled sidesteps problems that should be addressed head-on.

School-voucher policies targeted to disabled students can reduce the financial incentive for over-diagnosis, because they would let a student diagnosed with a learning disability leave the school, taking all of his funding with him. Currently, more than 21,000 special-education students in Florida, Georgia, and Utah (along with Ohio, whose program applies to autistic children only) use taxpayer-funded vouchers to pay at least part of their tuition at a private school.

Our own recent research shows that Florida’s schools have responded to its voucher program by reducing the number of students they report as having SLDs. When a private school willing to accept state vouchers opens near a public school, the public school becomes significantly less likely to classify a student as having an SLD — presumably for fear of losing students and the funding they bring.

Vouchers are controversial, of course, but in this case most of the common arguments against them (right or wrong) don’t even apply. The main argument made today by opponents of voucher programs is that they rob public schools of their best students and deprive them of scarce financial resources. But the first half of that claim cannot characterize a program that targets students who are performing poorly, and, as for the latter half, if educating special-education students costs more than the value of the additional resources they bring in — as public schools contend — then the public schools will benefit from having these drains on their resources removed. Congress could help significantly by requiring that federal special-education funding be used to pay for private-school tuition if the parent so chooses.

The commitment to educate disabled students was one of the most laudable education-policy achievements of the 20th century. Before federal law required schools to educate them, most disabled students simply went unschooled. But as often happens with well-intentioned social programs, special education is now being used for purposes its originators never imagined. By removing the financial incentives to mislabel students, we can continue to make sure that disabled students get the resources they need, and better address the problems of non-disabled students who fall behind because their school is failing them.

Mr. Winters is a senior fellow at the Manhattan Institute. Mr. Greene is a senior fellow at the Manhattan Institute and the head of the Department of Education Reform at the University of Arkansas. Their new report, “How Special-Ed Vouchers Keep Kids From Being Mislabeled as Disabled,” is available at www.manhattan-institute.org.

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