More Money Is Not Enough: (Re)Considering Policy Proposals to Increase Federal Funding for Special Education

Purpose: New policy proposals to increase funding for the Individuals with Disabilities Education Act (IDEA)—including recent efforts by the Biden-Harris administration to “fully fund” IDEA—bring a new sense of urgency to understanding how federal special education dollars are distributed among states. In this study, we evaluate whether the existing formula equitably distributes IDEA funding and show how potential future funding increases would be allocated. Research Methods/Approach: We apply concepts and empirical methods used in K–12 education finance policy research to evaluate the extent of existing variation in federal grant aid among states and whether systematic differences exist among states in the allocation of IDEA funding according to relevant need and other factors. Policy simulations illustrate how the distribution of funding among states will be affected by proposed increases in IDEA appropriations if the current formula is used. Findings: The existing formula results in substantial disparities among states and systematically disadvantages large states and states with more poor, disabled, and non-White children. Policy simulations show that increasing federal funding without modifying the formula used to calculate state grants will perpetuate and even exacerbate existing funding disparities. Simply adding additional dollars to existing appropriations without modifying the current formula works against policy makers’ goals to equitably distribute IDEA funding to states. Implications: Moving forward, achieving goals for equitably allocating IDEA funding will require changes to the statutory formula used to calculate states’ grant allocations.