Special Ed Gold Mine, Part 2: DOE Relying On Private Contractors For Special Ed Services

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The Department of Education is relying on private contractors to provide more special education services in public schools. In the second story of our Special Ed Gold Mine series, NY1 education reporter Lindsey Christ says some companies are set to make big profits by filling in the gaps.

Special education students need special educators besides their teachers, like therapists, counselors and aides. And this year, the Department of Education will spend $1.5 billion providing those staff members.

"The cost of special education is constantly increasing, getting larger and larger and larger every year," said City Councilman Robert Jackson.

But while special education costs are rising rapidly, more and more of that money is going to private hiring companies, rather than to the educators who actually do the work.

The Department of Education said it would prefer to have staff members provide services like speech therapy and counseling rather than pay outside contractors to fill the positions. But when NY1 broke down the numbers, it seems contractors are still providing about 30 percent of the work and making hundreds of millions of dollars. According to new contracts signed this summer, the DOE will pay these companies $638 million over the next three years.

"Our goal is to have a wider array of service providers available and we're going to have that," said Schools Chancellor Dennis Walcott.

These outside companies help staff preschool programs and special private schools, where the city pays students' tuition. But they also fill in the gaps in public schools, where the DOE does not have enough staff members to cover all the special education services students need.

The number of students needing counseling and therapy is going up, by about 9 percent over the past three years. But the costs are rising even faster, by about 15 percent over the same period.

The Department of Education said the new contracts should save the city money.

"We're very cost-conscious," Walcott said.

But it's not clear if that's the case. What is clear is that the agencies stand to benefit. 108 different companies bid for a piece of these massive contracts. The 49 companies that won will keep close to half of what the DOE pays them per hour to staff schools with therapists and aids. In other words, taxpayers shell out $18 an hour for educators who make just $10 an hour. The rest goes to the middle man.