How is special education funded?

If your child has an Individualized Education Program (IEP) — or you’re just starting to explore what support might look like — you’ve probably wondered how special education services get paid for. It’s a fair question. The honest answer? It’s complicated.

Every child with a disability has the right to a free appropriate public education (FAPE). That right comes from a federal law passed in 1975, now called the Individuals with Disabilities Education Act (IDEA) — the same law behind IEPs. 

Meeting that right costs money. That’s why IDEA came with a funding promise. But as Anya Kamenetz, the host of the podcast Zero Reject explains, “Congress committed to fund 40 percent of the average per-student cost for special education. They have never, ever come close to that.” 

Today, more than 7.5 million K–12 studentsopens in a new tab get special education services. Here’s how federal, state, and local funding work together to pay for those services, and what could change soon.

IDEA is the federal special education law in the United States. It has four parts, and three of them include funding:opens in a new tab 

• Part A states the rules of the law itself. 

• Part B gives states grants to help educate students with disabilities, ages 3 to 21. 

• Part C gives funding for infants and toddlers with disabilities.

• Part D gives grants for research in special education and training for special education teachers.

Part B is the biggest piece of IDEA funding. In 2025, it made up about 95 percent of the $15.4 billionopens in a new tab Congress provided for IDEA. Each state’s share depends mostly on two things: how many school-age children live there, and how many of those children live in poverty. States with more children — or more children in poverty — receive more funding to support the needs of those students. IDEA also says that states can’t give less money than the year before.opens in a new tab

But Part B funding doesn’t cover enough of the costs of providing services to students with disabilities. States and districts fill the funding gap. 

Since IDEA became law in 1975, federal funding has covered less than 13 percent of that cost, according to a Bellwether Education Partnersopens in a new tab analysis. But federal dollars are only part of the picture. 

That’s why funding and services can look different from state to state and district to district. Experts say there’s a real gap between what districts actually spend and what federal and state dollars cover. As Tammy Kolbe,opens in a new tab a special education funding expert at the American Institutes for Research, explains, “We don’t really understand how much is spent on special education.”

States decide how much to give local districts for special education. According to Chris Duncombe and Katja Krieger, policy experts at the Education Commission of the States,opens in a new tab most states use one of five general approaches. 

• Extra “weight” per student: Several states add money for students with disabilities by giving them additional “weight” in their funding formula. This means counting each student with a disability as worth more than one student.

• Multiple weights: Other states have several weights to account for different costs for different services.

• Estimated counts: Instead of counting exactly how many students need services, some states estimate the number. Then they base funding on that estimate.

• Funding based on last year: Many states give districts money based on how much they received the year before.

• Extra money for high-cost cases: Some states give extra money for very costly services, in addition to their formula and grants.

Most states don’t cover the remaining costs after federal funds. Only a few states base their funding on districts’ actual costs.

“States should have a clear understanding of what it actually costs to provide high-quality services to students,” says Duncombe. He adds that once researchers have a clearer picture of what special education actually costs in each district, states could use better funding strategies.opens in a new tab These could include adding multiple weights to the funding formula and helping with high-cost services. 

To meet IDEA’s requirements, local districts take on most of the cost of providing services for students with disabilities. 

According to Krista Kaputopens in a new tab of Bellwether Education Partners, in FY2023, the average cost of providing special education services per student was $17,528, according to a recent analysis by Bellwether Education Partners. Only about $6,775 of that was covered by federal and state funds.

Most school districts fund their budgets through local revenue streams, especially property taxes. Districts can also use parcel taxes to fund school programs. These are local, voter-approved flat property assessments that pay for specific projects. Often, districts in wealthier areas are more likely to pass these types of taxes. 

Some districts also collect a percentage of sales tax for schools, particularly for specific uses such as new buildings. 

No matter how districts fund themselves, they still have to fill gaps left by federal and state funding. 

Federal education funding for special education for 2027 is still up in the air. Congress has proposed $15.5 billionopens in a new tab — close to what Congress approved for FY2026 and FY2025. The Trump Administration’s Budget proposes $15.99 billion. Congress still has to vote on the final FY2027 spending bill.

The Trump budget also proposes folding the Preschool Grants Program and Part D into Part B, without adding any additional funding. But that budget has to be approved by Congress. 

The Trump administration has been shifting U.S. Department of Education responsibilities to other agencies and cutting most of its staff. This means less support for special education programs. 

“States often want guidance on how to administer the funding in the state and comply with the law,” says Carrie Gillispie,opens in a new tab a policy analyst at New America.opens in a new tab In the past, the Education Department would send out letters if states weren’t following the law properly — and offer to help. “With fewer people, it’s just more difficult to offer to help,” adds Gillispie. With less federal oversight, the state you live in — and how it already handles funding — matters even more.

Trump’s budget also proposes zero funding for research and teacher preparation.opens in a new tab That could shrink the special education teacher pipeline and grants for teacher preparation. It could also cut money for researchers to understand what works for students with disabilities.

The IDEA Full Funding Act, H.R. 2598,opens in a new tab is a proposed federal bill that would increase federal funding for special education. It was introduced in the House in April 2025. 

The bill would phase in full federal funding over 10 years, through regular, mandatory funding increases. It’s a bipartisan bill — sponsored by Reps. Jared Huffman (D-CA) and Glenn “GT” Thompson (R-PA). It’s still under review in the House Committee on Education and Workforce. 

There’s also a companion bill in the Senate, S. 1277, opens in a new tabled by Sen. Chris Van Hollen (D-MD).

Changes to the federal budget and bills like the IDEA Full Funding Act take time to move through Congress. But remember: IDEA is still the law. Funding formulas don’t change an individual child’s legal right to services under IDEA. Districts still have to provide FAPE for every student with a disability. 

If you’re worried about funding affecting your child’s IEP, talk with your district. You can also contact your U.S. representative or senators about bills like these. We’ll also update this article as things change. 

Thumbnail image credit: FatCamera via Getty Images