Performance Guarantees in Education: Shifting Risk to Create Opportunity

[pdf]  In this report, authors Bryan Hassel and Daniela Doyle note that to improve upon the successes of entrepreneurial providers and raise student achievement, more districts and states must be willing to give new education services a chance. Districts, however, are hesitant to hand over schools and school functions to outsiders. The authors suggest that performance guarantees, similar to car warranties or a home builder's bonded contracts, could provide an incentive for districts to experiment with new services by shifting risk from the district to the provider. The report explores a range of design issues that districts, providers, and investors could work through as they set up viable performance guarantees.