By Christina Fernandez, Grants Development Consultant
Special education funding in the United States continues to be a complex, evolving landscape shaped by decades of legislation, advocacy, and shifting priorities. Beginning with the Rehabilitation Act of 1973, students with disabilities were guaranteed a Free Appropriate Public Education (FAPE). This law prohibited discrimination based on disability and laid the groundwork for future legislation. By ensuring that students with disabilities had access to education and accommodations, the act marked a turning point in the public school system's approach to special education.
Building on this, the Education for All Handicapped Children Act of 1975, later renamed the Individuals with Disabilities Education Act (IDEA) in 1990, formalized the requirement that schools provide FAPE to students with disabilities and introduced the concept of Individualized Education Programs (IEPs). The IDEA governs how states and public agencies provide early intervention, special education, and related services to more than 8 million (as of school year 2022-23) eligible infants, toddlers, children, and youth with disabilities.[1] Today, annual funding levels vary widely throughout the country, depending on the priorities of the state. This article will provide an overview of what the public and private grant funding landscape looks like for special education and what we can expect to see in 2025 and beyond.
Federal Funding
IDEA continues to be the primary federal law governing special education. Through IDEA, there are two main funding buckets: Formula and Discretionary. Formula grants are allocated to states based on the amount of IDEA funding they received in FY 1999. If there is more money available for a given year compared to the previous year, additional funding is calculated based on the state's total number of children (ages 3-21) with disabilities and the total number of children living in poverty. Formula funding to states must be passed down to Local Education Agencies (LEAs) to help cover the cost of special education and related services, ensuring that schools can implement the requirements set out in IEPs. A portion of these grants also support early intervention services for children under the age of three who may be at risk of developmental delays. Moreover, Discretionary grants are awarded through a competitive process to state educational agencies, institutions of higher education, and other nonprofit organizations to support research, technology and media services, state personnel development, parent training, and information centers.[2] Typically, funding for these programs becomes available in the Spring with a deadline in the Summer.
While federal funding plays a significant role in supporting special education, it only covers a portion of the total costs. The federal government originally committed to funding 40% of average per-pupil spending to help cover expenses related to special education services, though, in practice the federal share is currently only at about 11%. This shortfall places additional pressure on state and local governments to fill in the funding gaps.
State Funding
State funding for special education varies dramatically, reflecting different legislative priorities, population needs, and approaches to funding allocations. According to the Education Commission of the States, there are 7 common funding mechanisms states generally use when funding special education.[3] Below are the three most common funding models states use:
- Multiple Student or Single Student Weights Funding: Most states use multiple student weight as their funding mechanism to account for students who might cost more to educate based on factors like severity of disability or resources needed. This ultimately leads to allocating more funds for students with greater needs. Other states use Single student Weight systems which provide funding for each student with a disability. Under this model, funding is weighted the same for each student regardless of needed resources.
- Census-Based Funding: In some states, it is assumed that each district has the same percentage of students with disabilities, rather than the actual number of students receiving services. This method can lead to underfunding in areas where disability rates are higher than anticipated.
- Resource-Allocation Funding: Under this model, the state distributes resources instead of dollars based on the number of students requiring special education services. For example, a state may provide one teacher and one aid for every student who may need individualized support. The motive behind this is to accurately reflect specific expenses associated with special education.
In addition to formula-based funding, states can also provide competitive funding opportunities to support specific project-based programming. These competitions can vary widely depending on the availability of funds and the state’s priorities.
Private Funding
In addition to public funding, private foundations have become an increasingly important source of grant funding for special education initiatives. Foundations such as the Learning Disabilities Foundation of America, Dorothea Haus Ross Foundation, the Charles Lafitte Foundation, and many other smaller regional organizations are dedicated to serving students with disabilities and promoting educational equity. These private funds are either distributed through a closed application process or through open competitions, and are used to support research and innovation in special education practices, teacher training, technology development, and inclusive classroom environments. The flexibility of private funding allows for innovative programs and tailored solutions to meet the needs of these students and provide them with support for long-term success.
Looking Ahead
As we look to the future of funding for special education, several trends are likely to shape this landscape. At the federal level, there are currently ongoing discussions about increasing IDEA funding to align with the original 40% commitment more closely, through legislation like the IDEA Full Funding Act. However, achieving this goal will require significant legislative and budgetary changes to the formula being used to calculate state allocations. In the meantime, federal funding increases to IDEA are modestly being made through the annual appropriations process.
State-level funding will continue to vary widely, with some states exploring new models to ensure a more equitable distribution of resources for special education. This may include adjustments to current funding formulas, especially as states respond to the growing needs of these students post-pandemic.
Private foundation funding will likely continue to support innovation in special education, particularly in areas like technology development and teacher training. As educational technology continues to evolve, these grants may play an essential role in expanding access to tools that can help students with disabilities succeed in the classroom.
Overall, the K-12 special education funding landscape is shaped by a combination of federal, state, and private sources, each playing a unique role in supporting the education of students with disabilities. As funding models continue to evolve and adapt, ensuring that all students have access to the services they need remains a critical priority for educators, policymakers, and advocates alike.
[1] https://sites.ed.gov/idea/about-idea/#IDEA-Purpose
[2] https://www2.ed.gov/about/offices/list/osers/osep/programs.html
[3] https://www.ecs.org/k-12-special-education-funding-state-profiles-archive/