The Individuals with Disabilities Education Act (IDEA) supports special education services through two principal formula programs: Grants to States (Part B, Sec. 611) and the Preschool Grants program (Part B, Sec. 619). These federal funds are intended to be combined with state and local resources to ensure a free appropriate public education — FAPE — for eligible children with disabilities. This article breaks down who must be served, how awards are calculated, the limits on state and local use, and the types of activities that may be paid with these federal dollars.
Grants to States: scope, eligibility, and distribution
The Grants to States program provides formula-based allocations to the 50 states, the District of Columbia, Puerto Rico, the Department of the Interior, Outlying Areas, and the Freely Associated States to address the excess costs of special education for children with disabilities. To receive funds, a jurisdiction must make FAPE available to all children with disabilities ages 3 through 21, with limited exceptions for ages 3–5 or 18–21 when state law, practice, or court order makes services inconsistent. A state that does not provide FAPE to three- through five-year-olds cannot receive base payment funds attributable to that age group or preschool program funds.
How the federal formula works
Allocations under Sec. 611 begin with each state’s historic baseline equal to what it received in fiscal year 1999. When the program appropriation grows above the prior year, the increase is divided so that 85% of the additional funds are distributed using each state’s share of children in the general population in the age range for which the state guarantees FAPE, and 15% are allocated using each state’s share of children in poverty in that age range. Specific provisions apply to the Freely Associated States and to a statutory 1.226% set-aside for the Department of the Interior.
State and local requirements and allowable state reserves
Most federal dollars must flow to Local Educational Agencies (LEAs), but states may reserve funds for statewide activities. The statute requires states to maintain their level of state finance for special education year to year and imposes a local maintenance of effort requirement on LEAs to keep total special education spending (state plus local) steady across years. LEAs may use up to 15% of their allocation — minus any amount used to reduce maintenance of effort — for early intervening services that support students who need extra academic or behavioral help but are not identified as needing special education.
State set-asides and optional high-cost fund
States may set aside a portion of their state-level reservation for a targeted fund to help LEAs serve high-cost children with disabilities. If a state creates such a fund, it may reserve more for state activities overall but must dedicate at least 10% of the amount held for state-level activities to the high-cost fund. Some state-reserved funds must be directed to monitoring, enforcement, complaint investigation, and creating the mediation process required under IDEA.
Preschool Grants (Part B, Sec. 619): preschool-age support and rules
The Preschool Grants program specifically targets children with disabilities ages 3 through 5, and a state must serve all eligible children in that age range and hold an approved Part B application to receive funds. States may, at their option, include children identified as having developmental delays under state definitions and assessment procedures and may serve two-year-olds who will turn three during the school year if consistent with state policy. IDEA emphasizes inclusion: children with disabilities should be educated with their non-disabled peers to the maximum extent appropriate, though states are not required to operate public preschool programs for the general population.
Preschool funding formula and state use limits
Preschool allocations begin with a baseline equal to each state’s fiscal year 1997 award. When appropriations rise above that base, 85% of the increase is apportioned by each state’s share of three- to five-year-olds in the general population and 15% by their share of three- to five-year-olds in poverty. States must pass most funds to LEAs but may retain up to an amount equal to 25% of their FY1997 grant for state-level activities, with administrative costs capped at 20% of that reservation. The formula includes protections so every state shares in increases and caps rapid shifts in allocations; it also guarantees a minimum share of any overall increase equal to one-third of one percent (0.333%).
What the funds can buy and how they are timed
Both programs are forward-funded: a portion of each fiscal year’s appropriation becomes available for obligation on July 1 of that fiscal year. For the Grants to States program, funds remain available for 15 months; preschool funds generally remain available through September 30 of the following year. Permitted expenditures include salaries for special education teachers and related services staff (for example, speech-language pathologists and psychologists), direct services, technical assistance, personnel preparation, positive behavioral interventions, and classroom technology improvements. State-level reserves can also support monitoring, mediation, and enforcement activities essential to implementing IDEA obligations.
Understanding these rules helps states, LEAs, and families know how IDEA funding is distributed and spent, and what legal and fiscal responsibilities accompany the money. Careful tracking, adherence to maintenance of effort requirements, and transparent use of state set-asides are central to ensuring that federal funds reach the children they are intended to serve.
