--- title: How is special education funded? description: No single source pays for your child’s special education services. Here’s how federal, state, and local funding fit together, and what could change in 2027. slug: how-is-special-education-funded author: Carly Berwick, PhD reviewer: Dia Jackson, MT, EdD published: '2026-09-28T00:00:00.000Z' thumbnail: https://cdn-images.understood.org/p0qf7j048i0q/1S92ntoMCLQq03QbvabT7O/78037c7a3fe0e17720e5192fc63cc25a/GettyImages-1457754070__1_.jpg source_url: https://www.understood.org/en/articles/how-is-special-education-funded lang: en --- # How is special education funded? ## Quick take - IDEA promised that federal funding would cover 40 percent of special education costs. But it’s never come close to that. - States and local districts cover most of the costs of special education, and funding varies widely by state and district. - Changes to federal funding are still being decided for 2027. But they won’t change your child’s legal right to special education services. 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](https://www.understood.org/en/podcasts/undefined/undefined) 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 students](https://nces.ed.gov/programs/coe/indicator/cgg/students-with-disabilities/) get special education services. Here’s how federal, state, and local funding work together to pay for those services, and what could change soon. ## How does federal funding for students with disabilities work? [IDEA](https://www.understood.org/en/articles/individuals-with-disabilities-education-act-idea-what-you-need-to-know) is the federal special education law in the United States. It has [four parts, and three of them include funding:](https://sites.ed.gov/idea/statuteregulations/)  - 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 billion](https://www.congress.gov/crs-product/R44624) 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.](https://sites.ed.gov/idea/statute-chapter-33/subchapter-ii/1411) 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 Partners](https://bellwether.org/publications/who-pays-for-special-education/) 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,](https://www.air.org/experts/person/tammy-kolbe) a special education funding expert at the American Institutes for Research, explains, “We don’t really understand how much is spent on special education.” ## How does state funding for students with disabilities work? 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,](https://www.ecs.org/) 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.](https://www.ecs.org/wp-content/uploads/PB-0626_Funding-Special-Education-Services_rev0726.pdf) These could include adding multiple weights to the funding formula and helping with high-cost services.  ## How do local districts fund services for students with disabilities? To meet IDEA’s requirements, local districts take on most of the cost of providing services for students with disabilities.  According to [Krista Kaput](https://bellwether.org/experts/krista-kaput/) 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.  ## What’s changing in FY2027, and how might it affect services? Federal education funding for special education for 2027 is still up in the air. Congress has proposed [$15.5 billion](https://appropriations.house.gov/sites/evo-subsites/republicans-appropriations.house.gov/files/evo-media-document/fy27-labor-health-and-human-services-education-and-related-agencies-subcommittee-mark.pdf) — 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](https://www.understood.org/en/articles/department-of-education-closes-ieps) 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,](https://www.newamerica.org/people/carrie-gillispie/) a policy analyst at [New America.](https://www.newamerica.org/insights/moving-special-education-from-the-education-department-will-harm-millions-of-students-with-disabilities/) 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.](https://www.ed.gov/media/document/fy-2027-presidents-budget-113611.pdf) 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 The IDEA Full Funding Act, [H.R. 2598,](https://www.congress.gov/bill/119th-congress/house-bill/2598/all-actions) 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, ](https://www.congress.gov/bill/119th-congress/senate-bill/1277)led by Sen. Chris Van Hollen (D-MD). ### What these changes mean for families 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](https://www.understood.org/en/articles/what-is-and-isnt-covered-under-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* --- ## Frequently asked questions ### Is IDEA fully funded? No. The federal government promised to cover 40 percent of the extra cost of special education. But it has actually covered less than 13 percent of that cost since IDEA became law in 1975. ### Does this funding promise cover 504 plans too? No. IDEA’s funding — including the 40 percent promise — is specifically for services provided under an IEP. A [504 plan](https://www.understood.org/en/articles/what-is-a-504-plan) comes from a different law ([Section 504 of the Rehabilitation Act](https://www.understood.org/en/articles/section-504-of-the-rehabilitation-act-of-1973-what-you-need-to-know)). It doesn’t come with its own dedicated federal funding stream. Schools must pay for all 504 plan accommodations out of their general operating budget. ### How much does the federal government pay for special education? In FY2025, the federal government spent about $15.4 billion on special education. Proposals for FY2027 range from $15.5 billion (Congress) to $15.99 billion (Trump’s budget). Either way, it’s far short of the 40 percent IDEA promised. --- ## Explore related topics and articles - [What is the Individuals with Disabilities Education Act \(IDEA\)?](https://www.understood.org/en/articles/individuals-with-disabilities-education-act-idea-what-you-need-to-know) - The Individuals with Disabilities Education Act \(IDEA\) gives kids and parents rights in the special education process. But it does so much more. - [What you need to know about federal funding for special education](https://www.understood.org/en/podcasts/the-opportunity-gap/what-you-need-to-know-about-federal-funding-for-special-education) - [School choice and special education: What to know about public, charter, and private schools](https://www.understood.org/en/articles/school-choice-special-education) - Public, charter, and private schools handle special education differently. Your child’s rights depend on which one you pick. Here’s what to know. --- ```json [{"@context":"https://schema.org","@type":"WebPage","@id":"https://www.understood.org/en/articles/how-is-special-education-funded#webpage","url":"https://www.understood.org/en/articles/how-is-special-education-funded","description":"No single source pays for your child’s special education services. 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