The Individuals with Disabilities Education Act (IDEA) Funding: A Primer

Since the enactment of the Education for all Handicapped Children Act (P.L. 94-142) in 1975, the predecessor legislation to the Individuals with Disabilities Education Act (IDEA), the federal government has played a prominent role in encouraging the principle of educational equality for children with disabilities through a permanent, broad-scale federal assistance program. The IDEA is a grants statute that provides federal funding for the education of children with disabilities and requires, as a condition for the receipt of such funds, that states agree to provide a free appropriate public education (FAPE) to every eligible child. FAPE means specially designed instruction, provided at no cost to the parents, that meets the needs of each individual child with a disability served under the IDEA. The IDEA, most recently reauthorized by P.L. 108-446 in 2004, was appropriated approximately $15.4 billion in FY2025. The largest part of the IDEA is Part B, Assistance for Education of All Children with Disabilities, which covers special education for children and youth with disabilities between the ages of 3 and 21. Approximately 95% of total IDEA appropriations fund the two Part B programs—the Section 611, grants-to-states program and the Section 619, preschool grants program. Part B was funded at $14.6 billion in FY2025, and in the 2023-2024 school year (SY), approximately 7.9 million children ages 3 through 21 received educational services under it. In addition to the Part B grants-to-states program, which provides special education and related services to school-aged children, the IDEA contains two programs for young children with disabilities. Part C authorizes federal funding for early intervention services to infants and toddlers with disabilities ages birth to three years, and Part B Section 619 authorizes supplementary grants to states for preschool programs serving children with disabilities ages three through five. Each IDEA program serving children and youth with disabilities has followed a similar funding pattern. Appropriations for IDEA Part B (Sections 611 and 619) and Part C increased steadily from each program’s inception until the early 2000s. Since the IDEA’s most recent reauthorization in FY2004, the funding for both Part B and Part C programs has fluctuated. The IDEA has two formulas for determining how to allocate grants to states under Part B: one for years when the appropriated amount available for grants to states is greater than or equal to the amount available for grants to states in the previous year, and one for years when the amount available for grants to states is less than the amount available for grants to states the previous year. In years when the appropriated amount for Part B increases or remains the same, each state receives its base-year (FY1999) grant amount plus a share of the new money (i.e., the amount above the FY1999 appropriation), based on the state’s share of the national child population and national population of children living in poverty, adjusted according to maximum and minimum grant calculations, and ratably reduced when necessary. In years when the appropriated amount for Part B decreases, each state receives its base-year grant amount plus a share of the new money the state received the previous year, which has been ratably reduced in proportion to the total new money available for the current year. This report will examine the development of the allocation formula for the Part B grants-to-states program, the major changes to the formula over the past 50 years, current funding levels and trends, and how allocations are currently calculated. Issues concerning the funding of special education and related services of interest to Congress will also be discussed.