Policy That Enables Pay-for-Performance Dropout Recovery Programs to Re-engage Opportunity Youth

Policy That Enables Pay-for-Performance Dropout Recovery Programs to Re-engage Opportunity Youth

Rebekah Richards, Graduation Alliance

Executive Summary

The Challenge: The dropout epidemic

It is common perception is that these youth don’t care about school or understand the value of a high school diploma, but national research and our experience show the opposite to be true. Civic Enterprises in their groundbreaking research published in The Silent Epidemic in 2006 found that approximately 78% of students left school for non-academic reasons (need to work to support their families, pregnant or parenting, chronic medical issues, social anxiety or bullying, etc). Nationally, 67% of dropouts were passing all of their courses when they left school. Eighty-one percent said they believe a high school education is important for achieving their goals in life, while 76% reported they would return to school if they could attend a program with others in the same situation. Graduation Alliance has surveyed more than 12,000 returning dropouts about their motivations for returning to school. Approximately 36% reported that they wanted to attend college and 33% said they needed a diploma to get a job or a better job.

Belfield, Levin, and Rosen (2012) estimated the cost of lost economic opportunities as well as fiscal costs from foregone tax revenues, and additional public costs such as crime and higher public health and welfare costs of so-called “opportunity youth,” at $258,240 per youth, over a lifetime in present value, and the cost to society at $755,900.1

It is our observation that the greatest barriers to effective dropout recovery programs for high school age students include:

• Onerous seat-time or time-tracking attendance methodologies.
• Inflexible funding mechanisms, including single or twice annual counts and funding caps, for example, provide little to no financial support for returning dropouts.
• Accountability disincentives which weight test scores more highly than graduation rates – and discourage local systems from fighting to keep students from traditionally low-performing subgroups.
• Lack of transparency around the true number of dropouts because of legal dropout age limits (which is age 18 in 22 states, at last count). Dropout reports typically show the low single digits while graduation rates hover around 82% nationwide. Much of the discrepancy comes from classifying students who leave school before they are legally allowed to “drop out” as habitual truants. As a result, the actual number of students who leave high school without a diploma is understated.
• Relying on local districts with too few resources and too many priorities as they focus on serving the students who are still showing up to school every day to focus on dropout recovery, as well.

Several states have developed evidence-based pay-for-performance dropout recovery programs to address these challenges. Graduation Alliance, which has successfully served the most at-risk students in our nation, has been called on to consult with policymakers across the country on best practices in dropout recovery and many of these practices have been included in legislation to bring flexibility and funding mechanisms into alignment with best practices in dropout recovery. We will discuss the key principles of legislation that enables and incentivize districts to do this important work.

Ohio and Michigan have recently disrupted the traditional adult education system with a state-managed pay-for-performance adult dropout recovery model that has yielded in their first year of operations compelling outcomes and numbers of students served. Learnings from these programs can also be used to inform policy and have potential for helping systems overcome the ongoing barriers to dropout recovery at both the state and local level, with learnings from these programs incorporated in the policy discussion and model legislation for a state-managed dropout recovery program included in Appendix 2.

What are the benefits of taking on this challenge?

According to Dr. Henry Levin, the lifetime ROI for a high school graduate is $755,900. Let’s break that down:

• According to the Bureau of Labor Statistics, the benefit to individuals who earn a HS diploma compared with high school dropouts is anticipated to be:
  – On average ~$469k net gain in earnings over their lifetime.
  – Improved employment opportunities (average unemployment rate of 5.3 vs 7.7 for high school dropouts2).
  – Disruption of cycles of intergenerational poverty.
  – Increased post-secondary achievement levels for succeeding generations3.

Based on the research of Levin and others cited above, for communities, the outcomes are both economic and social in nature and include:

• Immediate workforce development opportunities to meet critical labor shortages.
• Decreased unemployment costs for employers.
• Economic multiplier effects to the State as more jobs are filled, more individuals have disposable income to reinvest in the local economy.
• Lower crime rates, safer neighborhoods, decreased costs related to incarceration.
• Improved family economic stability.
• Decreased costs related to healthcare for families and individuals utilizing government-subsidized programs.

The goal of this paper is to lay out a set of principles and policy approaches for satisfying each principle that address the variety of needs each state faces. It is our hope that by selecting and combining the best approach for the state from each principle, state policy makers and agencies can develop and implement dropout recovery policies that lead to widescale change for our students and the communities in which they live.

How this paper is organized?

This paper proposes two frameworks for making dropout recovery possible and a priority: a district-operated model and a state-managed model. The advantages and disadvantages of each model is provided as a starting point.

Because every state has its own nuances, we next provide policy discussions around five principles that enable strong dropout recovery programs. For each principle, we describe a variety of approaches states can take to meet local needs; further, we provide sample legislative language that can be employed to address each principle in range of contexts.

Principle 1: Meeting Students Where They Are At – Providing a Flexible Dropout Recovery Program
Principle 2: Funding Success
Principle 3: Student Eligibility Requirements
Principle 4: Using Accountability Systems to Incentivize Dropout Recovery Programs
Principle 5: Incorporating Best Practices for Dropout Recovery

Additionally, two complete versions of model legislation are provided.

Model Legislation Package #1 contains a model bill summary and complete model legislation for a district-implementation pay-for-success model for dropout recovery.

Model Legislation Package #2 contains model bill summary and model legislation for a state-managed pay-for-outcomes dropout recovery program that references the best practices of the state-managed adult high school diploma programs currently being operated in Ohio and Michigan.

Case studies of the structure and performance outcomes achieved by the Ohio and Michigan state-managed, pay-for-performance adult dropout recovery programs follows in Appendix 1.