Who Pays for Special Education?
Updated: December 15, 2025. Reviewer: Dr. Rose Sebastian, Ed.D.
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Understanding the Funding of Special Education
Special education is very, very expensive. States provide it because, under IDEA, they have to. No one is sitting around saying yay, let me pay for a full time aide to help feed a student with limited mobility. Schools don’t have a lot of money and, without IDEA, we would likely to go back to the old days where students with more needs were excluded from schools and those with fewer needs got no supports at all. That was our national status quo before special education.
And states would, most likely, love to share the financial cost with families. But IDEA also covers that. The key guarantee in IDEA is a Free and Appropriate Public Education (FAPE). The key word here is free. That means at no cost to families. Unless they choose to skip the public part– if they choose to put their child in a private school (with some exceptions), the parent would then have to pay.
In 2000, special education cost between 10 thousand and over 20 thousand dollars a year per student. Costs have only increased since then
Which gets us back to the key question here. Who pays? The answer is a mixture of the federal government, the state government, the local education agency, and programs like Medicare. It’s a bit of a mess.
Who pays for special education?
Federal government
The federal government pays less than 2,000 dollars or so a year per student with an IEP.
State government
States vary in how much the fund public education and in how much they fund special education. One analysis found that, in 2020, states contributed anywhere between 5,000 and 25,000 per student. In some states, the state basically contributes nothing to special education while in others, the state covers most of the cost. In most states, however, state and federal contributions together equal less than half of the actual cost of special education.
Local school districts
Most special education costs are paid for by local school districts out of the same pot of property tax revenues that fund the general district budge. This chart shows the break down by state nicely. In many states, local school districts pay half or more of special education costs per pupil. That is why districts want LEAs (district representatives) at meetings. The district wants to make sure that its interests– which include its financial interests– are being represented. The law doesn’t say that students with disabilities get everything they need for maximum growth. The Supreme Court has ruled that students should get what is needed for some, not maximum, growth (458 U.S. 176, 1982). The difference between the two is often quite financially significant for school districts who are being asked to shoulder an enormous percentage of the costs of special education.
Medicaid
Some special education services are Medicaid reimbursable. What that means is that when schools provide medical services to students with disabilities, like supporting them with feeding tubes or providing occupational therapy, they can get some of the cost of those services back. It is a complicated process and many states and districts struggle or fail to fully take advantage of it. Texas got 741 million dollars of special education money back in 2021 through this program though so the money can be substantial
