Special education money funds for‑profit youth homes

Across the country, for-profit residential treatment centers for youth are channeling substantial taxpayer funds intended for students with disabilities, often with minimal oversight, according to an investigation. These facilities, part of a loosely regulated network sometimes called the troubled teen industry, are increasingly funded through special education programs and other government sources, even as reports of safety incidents and questionable practices persist.

The federal Individuals with Disabilities Education Act allows special education money to pay for residential placements when determined necessary by a student’s Individualized Education Program (IEP). An examination of state education departments found that oversight is fractured, with most agencies reporting they do not track private residential placements, particularly for students sent out of state. A 2022 study commissioned by California legislators found only half of states have a certification process for such facilities, and few require on-site visits.

A central case is Calo Programs, a facility in Lake Ozark, Missouri, that specializes in adoption trauma and reports that 90 percent of its clients are...