The system of incentives and penalties sets up a strong motivation for schools, districts, and states to manipulate test results: For example, schools have been shown to exclude minorities or other groups (to enhance apparent school performance; as many as 2 million students)(2007) NCLB Shortcomings. Rochester Democrat and Chronicle. Retrieved 3/18/07. and have employed creative reclassification of drop-outs (to reduce unfavorable statistics).(2004) Bush Education Ad: Going Positive, Selectively. FactCheck.org. Retrieved 6/7/07.
The incentives for the appearance of improvement cause schools to lower their official standards: Missouri, for example, improved testing scores but openly admitted that they lowered the standards.(2007) Congress To Weigh ‘No Child Left Behind’. CBS2 Chicago. Retrieved 9/15/07. Because the law’s response if the school fails to make adequate progress is not only to provide additional help for students, but also to impose punitive measures on the school, the incentives are to set expectations lower rather than higher(nd) State Tests Often Trail U. S. Results. SusanOhanian.org. Retrieved 6/7/07. and to increase segregation by class and race and push low-performing students out of school altogether. Ryan, J. (2004) The Perverse Incentives of No Child Left Behind Act. Retrieved 6/7/07.
There is an adverse financial incentive to adjust the rate of student improvement to a level that matches a desired rate of funding: Under the NCLB act, schools that do not meet certain established standards are given additional funds in an attempt to boost scores. Critics argue that schools have less of an incentive to do better if they are already receiving more funds. However, schools are also given bonuses for meeting yearly requirements. Since these requirements are given each year schools are less likely to rapidly increase their scores as a slow and gradual improvement would be financially better. Another part of the NCLB act gives schools that perform well awards and special recognition that opponents argue would encourage schools already doing well to push out disadvantaged students even more.
States have the incentive to make easier tests than other states: Because each state can produce its own standardized tests, a state can make its statewide tests easier to increase scores. New study confirms vast differences in state goals for academic ‘proficiency’ under NCLB. South Carolina Department of Education. Retrieved 6/7/07.</ref> A 2007 study by the U.S. Dept. of Education indicates that the observed differences in states’ reported scores is largely due to differences in the stringency of their standards.