http://www.nytimes.com/2009/07/13/nyregion/13credit.html
Having taught high school for 5 years, my experience shows that that the majority of students in credit recovery are not there for legitimate reasons. Legitimate use might be for a kid who was sick a lot during the semester, or had a rough period at home, or even just slacked off a little more than they should have... But when this becomes a pattern, when a kid is earning the majority of credit through credit recovery, there is a serious problem. Generally, these credit recovery classes/ projects are much easier and do not guarantee mastery (contrary to what school officials claim). Some students I worked with, knowing that they could more easily get the credit through the recovery program, simply shut down when I would given them challenging assignments. This is one aspect of the credit recovery system that the article did not address: how credit recovery creates perverse incentives to slack off!
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