How Special Education Funding Actually Works (2023)

Special education is among the most complicated and misunderstood facets of America’s sprawling K-12 school landscape.

And it’s only becoming more so.

The number of students qualifying for special education services is rising, even as persistent shortages of qualified staff members and dramatically inflated costs continue to hamper school districts’ efforts to provide those services for more than 7 million students.

Meanhile, there are no data illustrating the total amount of money America spends each year to provide these services, depriving policymakers of a complete picture of one of school districts’ largest line items. The last major study aiming to provide that data was published two decades ago. Efforts are underway in states like Ohio and Arizona to fill gaps in understanding, but the process can take years.

In the meantime, here’s an overview of how special education works in the U.S..

Are schools required under federal law to educate students with disabilities?

Yes. The official term for what students with disabilities are entitled to receive is a “free, appropriate public education,” or FAPE. That includes adhering to every detail of a student’s individualized education plan, or IEP—even when it means hiring staff, building a specialized classroom setting, or sending a student to an external provider.

The federal government pays a portion of those costs by sending annual grants to states, which in turn send them to districts. States and districts are then required to make up the remaining costs with their own funds.

Is the federal government required to contribute 40 percent of the cost of educating students with disabilities?

Not exactly.

The federal government first mandated special education services in K-12 schools in 1975, with the Education For All Handicapped Children Act.

Lawmakers at the time promised that federal funding for special education would cover a portion of the excess costs schools incurred to provide additional specialized services to students with disabilities. That’s because while most students with disabilities spend a big chunk of their school time in general education classrooms, all receive varying levels of additional services as well.

Lawmakers laid out a schedule of gradually growing annual investments from the federal government: from 5 percent of the nation’s average per-pupil expenditure (or APPE) for public schools in 1978, to 40 percent of APPE in 1982.

President Gerald Ford, while signing the legislation, said he believed the federal government would struggle to meet that investment target while maintaining a balanced budget.

Indeed, the federal government never followed through on that schedule (and it’s rarely achieved a balanced budget). Lawmakers later softened that language in the law, authorizing a “maximum level of funding” for special education services without requiring it.

A 2004 reauthorization of the law, since renamed the Individuals With Disabilities Education Act, included a schedule of federal funding that authorized an annual investment of $26 billion by 2012.

More than a decade after, the federal government’s annual IDEA funding is just barely half that.

Advocates have since pushed the federal government to live up to its original promise. Todd Swanson, financial controller of the Southwest Metro school district in Minnesota who wrote a master’s thesis on special education in the 1990s, offers a potent analogy for the current state of affairs:

“It’s like saying, ‘I’m going to give you $10 of this $100 restaurant bill, but I’m going to tell everybody what they can eat,’” Swanson said. “I might get the best meal and the rest of you get nothing.”

How does the federal government calculate 40 percent of the cost of special education?

Until 1999, the formula for a district-level IDEA grant was fairly simple: Take the total number of students with disabilities in the state, and multiply it by 40 percent of the average per-pupil expenditure across all K-12 public schools in America.

But after 20 years, the number of students receiving special education services was growing at a rate that concerned lawmakers. They worried that the existing formula was creating incentives for schools to designate students as needing special education services.

They altered the formula accordingly. States are now guaranteed to annually receive the amount of IDEA funding they got in 1999. If the product of the original formula (40 percent of APPE times the number of students with disabilities in the state) exceeds the 1999 sum, the additional funds are adjusted by two factors:

  • The state’s total number of K-12 students.
  • The state’s total number of K-12 students living in poverty.

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A student visits a sensory room at Williams Elementary School in Topeka, Kan.

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Researchers have recently sounded the alarm that this current formula dramatically shortchanges states with the largest overall populations of K-12 students, states with the largest shares of students in poverty, and states with the largest shares of students with disabilities. In a paper last year, these researchers argued for revamping IDEA rather than simply adding more funding.

Why did Congress choose 40 percent of APPE as the ceiling for federal special education funding?

At the time the original law was passed, lawmakers assumed that educating students with disabilities would work out to, on average, the cost of educating a traditional student, plus another 50 percent of that cost. They wanted the federal government to kick in some of that excess cost, as an incentive for states to comply with the federal mandate to provide these services, according to a 2018 history from the National Council on Disability, an independent government agency.

In one sense, the plan worked: No state has ever rejected IDEA funds from the federal government in exchange for freedom from the regulations around educating students with disabilities.

But more recent evidence suggests that the percentage drastically underestimates the total cost of services. A 2019 report from the California legislative analyst’s office, for instance, found that educating the average student with disabilities costs $27,000—nearly triple the cost of educating an average student without disabilities in the state, and double the current national average per-pupil expenditure, according to 2022 Census data.

Special education needs can also fluctuate dramatically from year to year. Carla Jentz, executive director of the Massachusetts Administrators for Special Education, said several districts in the state have reported significant increases in the number of students being referred for special education services or deemed eligible for IEPs.

Diagnostic tools are becoming more sophisticated and the pandemic exacerbated challenges for some students with disabilities. Many districts lack the personnel to handle these increasing caseloads, Jentz said.

“The mandated services will always have to be provided,” Jentz said. “If we’re gonna have to take from Peter to pay Paul, what happens in districts?”

Are districts required to spend more on special education than they did during the previous year?

Yes. With only a handful of exceptions, IDEA requires states to verify that districts either spend at least the same amount of local funds, or the same amount of state and local funds, on special education from one year to the next. That provision of IDEA is called “maintenance of effort.”

To IDEA critics like Swanson, the combination of this provision and the lackluster federal funding is frustrating.

“The guy that only gives $10 for the $100 meal now says, ‘Oh, by the way, next year you’ve gotta pay 92, and the year after that you’ve gotta pay 93,’” Swanson said.

See Also

Special education teacher Savannah Tucker works with Bode Jasper at the Early Childhood Education Center in Tupelo, Miss., on May 14, 2019. Special education costs are rising, particularly as student needs have grown more complex since the start of the COVID-19 pandemic.

Thomas Wells/The Northeast Mississippi Daily Journal via AP

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Education Issues, Explained

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How Special Education Funding Actually Works (3)
Mark Lieberman

Reporter, Education Week

Mark Lieberman is a reporter for Education Week who covers school finance.


What was the promised percentage of idea funds to cover the additional cost of educating special education students? ›

President Ford signs the Education for All Handicapped Children Act. The law guarantees access to a free appropriate public education in the least restrictive environment to every child with a disability. The law promises that the federal government will cover 40 percent of the extra cost of special education.

What are the pros and cons of special education programs? ›

Special needs schools and programs are a great option for many kids. They offer tailored instruction, specialized support, and crucial resources and services. Sometimes, though, they can lead to a lack of integration, problems transitioning to a regular school, and negative stigmas.

In what ways has special education been most successful? ›

Special-education has been successful in providing a least restrictive environmental education for individuals with disabilities. The IDEA's Federal expectations, have effectively increased educational instruction for students with disabilities.

How much does the US spend on special education federally? ›

30, 2023. Federal spending on special education, through the Individuals with Disabilities Education Act, rose from $13 billion to $15.5 billion. And federal funds to support English-learners will grow from $802 million to $890 million.

Why is idea not fully funded? ›

“Structurally, when programs like IDEA come out of the discretionary side of the budget, they are subject to annual appropriations process and they get squeezed out by other programs. If congress wanted to fully fund IDEA, there'd be no money left for other programs.

What is the biggest challenge in special education? ›

  1. Feeling unappreciated even with knowledge from special education courses. ...
  2. Pile of paper works. ...
  3. Lack of support from parents of children. ...
  4. Lack of support from public in general. ...
  5. Working with paraprofessionals. ...
  6. Diverse student needs. ...
  7. Collaboration with other teachers. ...
  8. Scheduling and rescheduling.
Aug 26, 2021

What are disadvantages of special education? ›

Cons Special education students are sometimes separated from the rest of the class, which can be isolating. Pros Students receive a specialized approach to their education. Cons There's a potential for students to experience stigma. Pros Students receive access to resources they otherwise wouldn't have.

What are some of the disadvantages for inclusion for students with special needs? ›

Cons of Inclusion in the Classroom
  • Less one-on-one attention.
  • Students can have trouble adapting.
  • Environment allows for more distractions.
  • Child may feel singled out.
  • Often paired with one-on-one aids that have little training.
Dec 21, 2021

What is the most important thing about special education? ›

The most important mission of special education is to provide students with special needs with development opportunities and a learning process that will improve the quality of their life.

What is the most important goal of special education? ›

The goal is to provide the child an opportunity to learn in the the least restrictive environment so they can ultimately thrive to the best of their ability when transitioned into adulthood. The process allows students with disabilities to remain in public school until they reach the age of 21 years.

What state has the best funding for special education? ›

California Provides Most Special Education Funding Based on Overall Student Attendance. The state allocates most special education funding (84 percent in 2021‑22) through a base rate formula commonly called AB 602 (after its enacting legislation).

What percentage of US students receive special education? ›

In 2020–21, the number of students ages 3–21 who received special education services under the Individuals with Disabilities Education Act (IDEA) was 7.2 million, or 15 percent of all public school students.

Can you get funding with just an idea? ›

Second, it's possible to get funding for your startup with just an idea from a variety of sources such as pitch competitions, incubators, as well as government and university programs. Moreover, angel investors are much more likely than a venture firm to take a chance on an idea.

Why have block grants not been successful? ›

Block grants' funding levels tend to fall short of meeting need, requiring benefit cuts, eligibility restrictions, or waiting lists. Funding levels are often inadequate initially and typically erode over time.

Is the idea an unfunded mandate? ›

IDEA is not "fully funded." In the IDEA legislation, Congress set a maximum target for the federal contribution to special education spending equal to 40 percent of the estimated excess cost of educating children with disabilities.

How do schools in the US get most of their funding? ›

Public schools in the United States of America provide basic education from kindergarten until the twelfth grade. This is provided free of charge for the students and parents, but is paid for by taxes on property owners as well as general taxes collected by the federal government.

What is the most funded school in the US? ›

The school district that spent the most money on its students was Syosset Central School District in Syosset, New York, which was found to spend $32,125 per pupil.

Which states receive the most federal funding for education? ›

Federal Aid by State 2023
  • California ($43.61 billion)
  • Texas ($26.90 billion)
  • Florida ($23.77 billion)
  • New York ($22.06 billion)
  • Virginia ($17.68 billion)
  • Pennsylvania ($15.58 billion)
  • Illinois ($13.18 billion)
  • Ohio ($12.57 billion)

Why do so many special education teachers quit? ›

Lack of support from administrators and colleagues. Large caseloads. Non-teaching responsibilities (e.g., excessive paperwork) Student behavior.

What are limiting factors for special education? ›

A child may not be eligible for special education if his or her educational needs are primarily due to limited English proficiency, a lack of instruction in reading or math, temporary physical disabilities, social maladjustment, or environmental, cultural, or economic factors.

What is a current trend in special education? ›

What are the current trends in special education? Some of the current trends in special education include increased inclusion in mainstream classrooms, differentiated instruction, personalized learning plans, use of assistive technologies, and a focus on social-emotional learning.

Which country has the best special education system? ›

So, in this article, we'll take a look at some of the countries which best support those with intellectual disabilities.
  • The Netherlands. ...
  • The United Kingdom. ...
  • Denmark. ...
  • Cyprus. ...
  • Canada. ...
  • New Zealand. ...
  • Which Countries Aren't So Good with SEN? ...
  • What's the Future of Special Education Needs in 2022?

What is the opposite of special needs education? ›

The opposite of special education is general education, also known as mainstream education. General education is the standard curriculum presented without special teaching methods or supports.

Is an IEP a good thing? ›

While IEP meetings are meant to be genuinely helpful, they can take a toll on special needs parents. During the meeting, parents and therapists are typically asked a multitude of questions about the child's skills and abilities. These answers are used to determine what is needed to accommodate the child's disability.

Why are people against inclusion in the classroom? ›

Opponents of inclusion believe: Students in separate special education classrooms acquire individualized skills and an on-one attention because of the special educator's training, the IEP-driven curriculum, and the opportunities for practice in a more sheltered setting.

What is the disadvantage of IEP? ›

Common IEP Shortcomings:

Sets low expectations and misrepresents the child's educational potential. Does not target the fundamental cognitive, communicative, behavioral, sensory integrative, and social deficits of ASD students. Does not capitalize on characteristic strengths of this population.

What are the problems when children of special needs are in regular classrooms? ›

Another potential drawback is that a special-needs child can easily get lost in a regular classroom. In some cases they may be disruptive and may compromise the learning environment of other students.

What are the four goals of special education? ›

The framework regards academic goals as the means for achieving other outcomes, namely the four outcomes that the Individuals with Disabilities Education Act (IDEA) declared: equality of opportunity, full par- ticipation, independent living, and economic self-sufficiency.

What are the 7 components an IEP must include? ›

This type of information is captured in the “present levels” statement in the IEP.
  • Annual Goals. ...
  • Benchmarks or Short-Term Objectives. ...
  • Measuring and Reporting Progress. ...
  • Special Education. ...
  • Related Services. ...
  • Supplementary Aids and Services. ...
  • Program Modifications for School Personnel. ...
  • Extent of Nonparticipation.

What are the six pillars of special education? ›

Key to the legislation are six pillars that ensure a child's education needs and progress are met with:
  • Individualized Education Program (IEP). ...
  • Free Appropriate Public Education (FAPE). ...
  • Least Restrictive Environment (LRE). ...
  • Appropriate Evaluation. ...
  • Parent and Teacher Participation. ...
  • Procedural Safeguards.

What is the most important role of a special education teacher? ›

Special education teachers typically do the following: Assess students' skills and determine their educational needs. Adapt general lessons to meet students' needs. Develop Individualized Education Programs (IEPs) for each student.

What are the 5 factors that make special education special? ›

Answer and Explanation: The behavior, limited English proficiency, blind or visually impaired, communication needs or deaf or hard of hearing, and assistive technology are the five factors that IEP team must determine to make special education effective for the students with disabilities.

What are some interesting facts about special education? ›

95% of school-age students served under IDEA are enrolled in regular schools. The most prevalent disability among students in the US is a specific learning disability. The US federal government allocated $17.1 billion for special education in 2022. The median annual salary for special education teachers is $61,820.

What is an example of a special education goal? ›

Some examples of possible IEP goal focus areas identified within the present levels are: Reading comprehension, fluency skills, communication, time-management, self-advocacy, self-regulation, organization, independent travel, interpersonal and social skills, college and career exploration, math skills, fine motor ...

Why is it important for special education students to have goals? ›

As a special education teacher, it is mandatory to set appropriate goals on your Individualized Education Program (IEP) annually. Appropriately setting well-thought-out goals on the IEP allows students, with any disability, to achieve success, growth, and increase positive behaviors.

Which do you think are the most important goals of early childhood special education? ›

Cognitive or intellectual development is one of the biggest goals of early childhood special education. This deals with strengthening and growing a child's ability to think, reason, and understand concepts.

Where do special education teachers make the most money? ›

Maryland has the highest special education teacher salary of $76,282. Mississippi has the lowest special education teacher salary of $38,081. The national average salary for special education teachers is $54,290.

Where is the highest demand for special education teachers? ›

Here Are the Best States for Special Needs Teachers In 2023:
  • Texas. Texas. ...
  • Kentucky. Kentucky. ...
  • New Hampshire. New Hampshire. ...
  • North Dakota. North Dakota. ...
  • Missouri. Missouri. ...
  • Minnesota. Minnesota. ...
  • West Virginia. West Virginia. Total Special Needs Teacher Jobs: ...
  • Iowa. Iowa. Total Special Needs Teacher Jobs:
Apr 6, 2021

Which state is best for autistic child? ›

Colorado, New York, Maryland, and Connecticut typically rank high as the states providing the most benefits to autistic people in all age groups.

What is the #1 least educated state? ›

West Virginia is the least educated U.S. state, with an overall score of 23.15. West Virginia ranks last for Educational Attainment with the lowest shares of people with associate's degrees or some college experience and those with bachelor's degrees, at 20.6%.

What state is ranked 50 in education? ›

State Rankings
StateAcademic Performance RankOverall Rank
South Carolina4149
47 more rows
Nov 1, 2019

What state has the highest school funding? ›

In 2022, New York spent around 29,897 U.S. dollars per pupil on public elementary and secondary schools - the most out of any state. The District of Columbia, Vermont, New Jersey, and Massachusetts rounded out the top five states for elementary and secondary school expenditure per pupil.

Which is the largest disability category in US schools? ›

Specific Learning Disabilities (SLD) is by far the largest category of disability within the Individuals for Disabilities Education Act.

What state has the most special education teachers? ›

Top States for Special Education Teachers

States with the most special education teachers include New York, Texas, California, Illinois, and New Jersey. These states also have the greatest projected increase in employment for special education teachers between 2018 and 2028.

Is special education free in USA? ›

Special education is instruction designed to meet the individual needs of children with disabilities. This is done at no cost to the parents. Special education may include individualized instruction in the classroom, at home, in hosptials or medical instutions, or in other environments.

What percentage of the funding for education comes from federal sources? ›

Federal funds made up just $57.8 billion or 7 percent of total education funding during the 2019–2020 school year; federal dollars supplement state resources by narrowing funding gaps for at-risk students.

What percentage of a school budget is funded by the federal government? ›

State and local role in education funding

According to the US Department of Education, the Federal Government contributes about 8% to funding US public schools. To fund the remaining balance per student in the public education System, state and local governments are mandated to allocate money towards education.

How much does the US government fund education? ›

Each year federal agencies receive funding from Congress, known as budgetary resources . In FY 2023, the Department of Education (ED) had $174.97 Billion distributed among its 10 sub-components. Agencies spend available budgetary resources by making financial promises called obligations .

What percent of the federal government budget is earmarked for education? ›

The federal government supports education by providing about 7.9 percent of the funding for K-to-12 schooling, helping students finance higher education through loans and grants, and giving favorable tax treatment to educational institutions. CBO analyzes the budgetary costs and other effects of those federal policies.

Does spending more on education improve academic achievement? ›

The state's big increases in spending could bring better academic results, but only if the money is laser-focused on uplifting children who have been left behind, rather than subtly diverted into other purposes, as various independent studies have indicated, including a scathing 2019 report from the state auditor's ...

Which state spends the least on education? ›

Facts and Findings
  • Alaska spends the most on students overall at a total of $53,124 per student between K-12 and postsecondary education.
  • Idaho spends the least amount on education overall at $19,661 per student.
  • Between the highest-spending state (Alaska) and the lowest-spending (Idaho), the spending gap is $33,463.
Nov 2, 2022

What country spends the most on education per student? ›

Out of the OECD countries, Luxembourg was the country that spend the most on educational institutions per full-time student in 2019. On average, 22,000 U.S dollars were spent on primary education, nearly 25,000 U.S dollars on secondary education, and around 52,000 U.S dollars on tertiary education.

Is there a correlation between money and education? ›

Households with higher levels of education tend to have more liquid assets to withstand financial storms, diversify their savings (investments), and maintain low levels of debt relative to assets. These financial behaviors are effective strategies for building income into wealth.

What is the largest percentage of the federal budget? ›

What does the government buy?
  • 19 % Social Security.
  • 15 % Health.
  • 14 % Income Security.
  • 12 % National Defense.
  • 12 % Medicare.
  • 11 % Education, Training, Employment, and Social Services.
  • 8 % Net Interest.
  • 4 % Veterans Benefits and Services.

What government spends the most on education? ›

Norway and Chile reported the highest total expenditures on education institutions as a percentage of GDP (both 6.6 percent), followed by Israel and New Zealand (both 6.2 percent), the United Kingdom (6.1 percent), and the United States (6.0 percent).

How much does the US government spend per child on education? ›

How much does the government spend on education? In the fall of academic years 2017-2018, the average school budget spent by the United States was $14,891 per pupil enrolled in public elementary and secondary schools. Computed based on average daily attendance, per-pupil expenditure amounted to $15,946 (NCES, 2020).

How much does the US government profit from student loans? ›

Education originally estimated these loans to generate $114 billion in income for the government. Although actual costs cannot be known until the end of the loan terms, as of fiscal year 2021 these loans are estimated to cost the federal government $197 billion.

What percent of US taxes go to education? ›

Funding Sources
StateFederal sources (%)State sources (%)
South Carolina8.847.5
47 more rows
Jun 3, 2019

What is in $1.7 trillion bill? ›

President Joe Biden signed into law a $1.7 trillion yearlong federal government spending package on Thursday, after the House and Senate passed it last week. The legislation includes $772.5 billion for nondefense discretionary programs and $858 billion in defense funding.

How much of the federal budget is education vs defense? ›

According to data, the military budget is 11 percent ($755 billion) while spending on education is about 4 percent ($297 billion).


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