Special Education What the Research Says

Federal Special Ed. Funding Is Woefully Inequitable, New Studies Show

By Mark Lieberman — June 01, 2022 5 min read
A paraprofessional guides a student back to his gym class while participating in remote learning at his home in Wharton, N.J.
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Joe Biden promised during his presidential campaign to fully fund the federal government’s $38 billion in obligations to students with disabilities. But two new research papers say dumping more money into existing funding formulas only widens gaps that shortchange students with disabilities, students from low-income families, and students who live in large states.

More than 7 million students, or roughly 15 percent of the nation’s K-12 population, currently qualify for special education services. While that population has increased and costs of services have soared in recent years, federal funding for those services has stayed largely flat in the past two decades.

The Biden administration’s fiscal year 2023 budget proposal would raise the annual amount of state grants for special education from $13.3 billion to just over $16 billion.

But in one paper published in May by the Annenberg Center at Brown University, and a pre-print paper set for publication in the American Journal of Education, researchers Tammy Kolbe from the University of Vermont, Elizabeth Dhuey from the University of Toronto Scarborough, and Sara Menlove Doutre from WestEd argue that funding increases alone won’t alleviate disparities across states.

That’s because the largest set of funds within the Individuals with Disabilities Education Act grant program pass through a formula that hasn’t been updated in more than two decades.

Unlike the federal Title I program, which sends money directly to districts with high-need students, the federal government sends money for students with disabilities to states, which then distribute the funds to districts.

In 1999, facing concerns that states were overidentifying students with disabilities in order to extract more federal funding, lawmakers implemented a complex formula that aims for parity among states. The formula combines a base amount with additions to reflect U.S. Census counts of the number of students overall, and students in poverty, in each state.

The formula now draws on population data that’s between one and two decades old. Good intentions have gone astray, researchers argue. They found that while IDEA allocations used to be fairly consistent state by state, gaps in the amount of money states have received since 1999 have widened considerably.

How an outdated funding formula punishes states with big needs

Bigger states’ IDEA funding has increased at a much lower rate than smaller states. Thanks to enrollment changes that have played out since the Census counts powering the formula, the same is true for states with larger populations of students overall, and of students with disabilities.

For instance, Vermont’s annual allocation increased in the last 20 years by $382 per student, while Florida’s only increased by $198 per student. Wyoming now receives more than triple its 1999 allocation per student who qualifies for special education services, while the current allocation for Pennsylvania, which has nearly 10 times more students with disabilities, is less than double its 1999 haul.

The result, Kolbe said, is that two identical districts with the same number of students and the same proportion of high-need students could get dramatically different amounts of IDEA grant funding if one is in a small state like Vermont and the other is in a large state like Pennsylvania.

The formula also sends fewer dollars per student to states with higher concentrations of student poverty. States with the largest proportions of students from low-income families got 16 percent less IDEA funding per student, and 10 percent less per student who qualifies for special education services, than states with the lowest proportions of students from poor families.

The inequities compound at the district level, adds Kolbe, an associate professor of educational leadership and policy studies at the University of Vermont, and one of the nation’s foremost researchers of special education finance. States are required to distribute their IDEA allocations to districts uing the same formula the federal government uses to send money to states. Kolbe’s team will explore those inequities in another paper out this summer.

A law long overdue for revisiting

The Individuals with Disabilities Education Act (IDEA), established under a different name in 1975, requires schools to provide an equal education to that growing population of students, even if it means spending much more.

The law authorizes the federal government to contribute funds that equal 40 percent of the nation’s average K-12 spending per student—but the federal government has never come close to that target. States and districts make up the difference, often by cutting other necessary services that aren’t mandated by law.

In Pennsylvania, for instance, local districts’ spending on special education doubled between 2008 and 2019 to roughly $3.6 billion, while federal spending barely budged from $400 million, according to data from the state education department.

The federal government hasn’t revisited IDEA since it was last reauthorized in 2004, and it hasn’t revised the current formula since its 1999 inception. Early indications of plans for reauthorization that emerged in 2019 haven’t yet come to fruition.

When that reauthorization eventually happens, Kolbe’s team is urging policymakers to tackle the substance of the formula rather than simply adding more money to what’s already there.

A prudent reform, they argue, would be to factor in the varying costs of providing special education services across states and regions.

The challenge, Kolbe admits, is that there’s little consensus about how much special education actually costs.

“We don’t have good benchmarks for that, and we need them desperately,” she said.

Kolbe says her team’s research shows that efforts to prioritize equity don’t always work out in practice, and need to be examined regularly.

“If we’re going to have that conversation about putting more money in, we’d better have a funding formula that’s distributing those dollars in ways that truly equalize opportunity, rather than make it the case that the state in which a child lives matters,” Kolbe said.

A version of this article appeared in the June 15, 2022 edition of Education Week as Federal Special Ed. Funding Is Woefully Inequitable, New Studies Show


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