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How Pennsylvania Funds Education for Students with Disabilities
This brief was produced by researchers at The Penn State University Evidence to Impact Collaborative with assistance from ASERT. EIC and ASERT are non-lobbying entities. The brief does not necessarily represent the opinions of ODP or DHS, which fund ASERT. The brief is intended to educate all Pennsylvanians about how special education is funded in the Commonwealth. The goal of this brief is to raise awareness of the impact of special education funding on students, families, schools, and communities.
Special education services and programs can lead to positive outcomes for students with disabilities. However, Pennsylvania’s current special education system struggles with funding shortages, resource gaps, and disparities between wealthy and less affluent school districts. At 19%, the percentage of Pennsylvania K-12 students who require special education services and accommodations is higher than the national average (Schaeffer, 2023). The state funds education services for its 324,000 students with disabilities with a mix of federal, state, and local sources:
- Federal: $5.9 million (Pennsylvania General Assembly, 2023)
- State: $1.5 billion proposed in 2025-2026 (Commonwealth of Pennsylvania, 2025a)
- Local: $3.7 billion (Education Law Center, 2022a)
Federal law mandates that all students with disabilities between the ages of 3 and 22 years have the right to a “free and appropriate public education” (FAPE; Dragoo, 2024). This obligation exists within a continuously evolving compliance landscape. Pennsylvania’s education funding system was once reported to be the most inequitable in the nation (Brown, 2015). A landmark Commonwealth Court ruling in 2023 mandated funding reform, prompting lawmakers to work toward closing the $5.1 billion public education funding gap – including special education – over seven years. These reforms have only begun to take shape within the 2023-2024 budget (Public Interest Law Center, 2023).
Meanwhile, Pennsylvania has become the “cyber charter school capital of the country,” and there is growing momentum for funding reform for cyber charter schools, alongside potential historic changes at the U.S. Department of Education (Public Interest Law Center, 2024a; PA Department of Education, 2025).
Pennsylvania students with disabilities
Among the nation’s schoolchildren with disabilities, approximately one-third (32%) have a specific learning disability (e.g., dyslexia), 19% have a speech or language impairment, 15% have chronic or acute health problems that affect their school performance (e.g., epilepsy), and 12% have autism (Schaeffer, 2023). Special education services such as Individualized Education Programs (IEPs) are intended to enhance educational outcomes for these students while providing structured support for their teachers, parents, and service providers.
Pennsylvania serves one of the largest populations of students with disabilities in the country (Schaeffer, 2023), and the number of K-12 students requiring IEPs and other special education supports continues to increase each year. During the 2022-2023 school year, for example, the state provided services to over 324,000 students with disabilities – approximately 19.3% of its public school population, compared to the national average of 15% (Pennsylvania School Boards Association, 2024; Schaeffer, 2023).
How special education is funded in Pennsylvania
Federal funding: The Individuals with Disabilities Education Act (IDEA), which mandates a “free and appropriate public education” (FAPE) for students between the ages of 3 and 22 years, is intended to be the main source of funding for special education services in Pennsylvania. The state distributes funds to eligible school districts based on formulas in the IDEA law (Individuals with Disabilities Education Act (IDEA), Part B, 2004).
- By law, the federal government must fund 40% of special education costs. However, IDEA is historically underfunded, providing closer to 13% (Graves, 2023).
- The pledge of 40% has never been met, but there have been multiple bills introduced in the U.S. House of Representatives and U.S. Senate to fully fund IDEA (Gorczynski, https://www.specialneedsalliance.org/blog/full-funding-of-the-idea-critical-for-our-children/).
State funding: Pennsylvania’s proposed 2025-2026 budget includes $1.5 billion in special education funding (Commonwealth of Pennsylvania, 2025a).
- State funding has not kept up with rising costs, leading to budget shortfalls in many school districts (Education Law Center, 2022b).
- In a 2023 landmark decision, the Commonwealth Court ruled that Pennsylvania’s method for funding K-12 education is unconstitutional and ordered the system to be reformed. The court found that students in low-wealth districts have been deprived of opportunities and resources available to students in high-wealth districts (Public Interest Law Center, 2023).
- The Commonwealth did not appeal the decision, and the 2023-2024 and 2024-2025 state budgets heralded historical increases in education funding, including a $100 million increase in special education in 2024-2025 (Commonwealth of Pennsylvania, 2024), though significant gaps remain.
- Passed as part of the 2023-2024 budget, the first effort in funding reforms included $426 million to help close the $5.1 billion funding gap. Lawmakers intend to close the gap over seven years (Public Interest Law Center, 2024b). The 2024-2025 budget provided $526 million toward the gap (Hall & Karbal, 2024), and the 2025-2026 budget proposal includes another $526 million (Commonwealth of Pennsylvania, 2025b).
Local funding: Underfunding at the federal and state levels requires school districts to bridge the gap. Local school districts are funded largely by property taxes, creating disparities between schools with high property wealth and those with low property wealth.
- Low-wealth school districts are often forced to make accommodations to fund special education, such as increasing caseloads for special education teachers, using outdated resources, or cutting funds for maintenance or extracurricular activities (Education Law Center, 2018).
Cyber charter schools in Pennsylvania
- Pennsylvania has the second-largest cyber charter school enrollment in the U.S. and is known as the “cyber charter school capital of the country” (Public Interest Law Center, 2024a). As of January 2025, there are 59,913 students enrolled in PA cyber charter schools, with about 21.8% of those students receiving special education supports (PA Department of Education, 2025; PA Coalition of Public Charter Schools, 2019).
- Currently, local school districts fund cyber charter schools based on their actual per-student cost, which averages around $22,000. However, an audit of the 2023 fiscal year found that payments varied widely, ranging from $6,975 to $25,150 for general education students and from $18,329 to $60,166 for special education students (PA Department of Education, 2025).
- The proposed 2025-2026 state budget would reform how cyber charter schools receive funding by standardizing the rate for general education students at $8,000 and introducing a formula to determine payments for special education students. This formula would be based on the actual percentage of students with disabilities in each school district (Commonwealth of Pennsylvania, 2025b).
Looking forward
Ensuring the special education system is adequately resourced can help improve outcomes for students with disabilities. Understanding how services and programs are funded and impacted by changing regulations and policies at all levels of government is key to assessing needs and opportunities to support hundreds of thousands of Pennsylvania students.
IDEA: Individuals with Disabilities Education Act. The original version of this law was the 1975 federal Education For All Handicapped Children Act, which mandated K-12 special education (I. U.S. Department of Education, n.d.).
FAPE: Free and Appropriate Public Education. The official term in IDEA, giving students with disabilities the right to free public education supported by an Individualized Education Program and services such as speech therapy (O. for C. R. U.S. Department of Education, n.d.).
IEP: Individualized Education Program
Commonwealth of Pennsylvania. (2024). Governor Shapiro Signs Bipartisan 2024-25 Budget, Investing in Economic Development, K-12 and Higher Education, and Public Safety to Create Freedom and Opportunity for All Pennsylvanians [news release]. https://dced.pa.gov/newsroom/governor-shapiro-signs-bipartisan-2024-25-budget-investing-in-economic-development-k-12-and-higher-education-and-public-safety-to-create-freedom-and-opportunity-for-all-pennsylvanians/#:~:text=In%20the%202023%2D24%20budget,save%20school%20districts%20millions%20annually
Commonwealth of Pennsylvania. (2025a). Education Budget. Education Budget. https://www.pa.gov/agencies/education/programs-and-services/schools/grants-and-funding/school-finances/education-budget.html
Commonwealth of Pennsylvania. (2025b). Gov Josh Shapiro’s 2025-2026 Budget Tracker. https://www.pa.gov/governor/governor-shapiro-s-budget/budget-details.html#accordion-1193ab5deb-item-afcf18cf0c
Dragoo, K. (2024). The Individuals with Disabilities Education Act (IDEA), Part B: Key Statutory and Regulatory Provisions (R41833). Congressional Research Service. https://crsreports.congress.gov/product/pdf/R/R41833
Education Law Center. (2018). Shortchanging Children with Disabilities: State Underfunding of Special Education in Pennsylvania. https://www.elc-pa.org/wp-content/uploads/2018/10/Special-Education-Report-Online.pdf
Education Law Center. (2022a). Fixing the Special Education Funding Gap. https://www.elc-pa.org/wp-content/uploads/2022/05/Special_Ed_Report_PASWEDU_Law_Center_2022-5-24.pdf
Education Law Center. (2022b, May 24). Fixing the special education funding gap. https://www.elc-pa.org/wp-content/uploads/2022/05/Special_Ed_Report_PASWEDU_Law_Center_2022-5-24.pdf
Gorczynski, L. (https://www.specialneedsalliance.org/blog/full-funding-of-the-idea-critical-for-our-children/). Full Funding of the IDEA Critical for Our Children [Special Needs Alliance]. Full Funding of the IDEA Critical for Our Children.
Graves, K. (2023, November 20). Funding Falls Short for Students with Disabilities. NAESP. https://www.naesp.org/blog/funding-falls-short-for-students-with-disabilities/
Hall, P., & Karbal, I. (2024, July 11). Gov. Shapiro signs 2024-25 Pennsylvania budget, calls it a ‘major victory.’ Pennsylvania Star Capitol. https://penncapital-star.com/government-politics/pa-legislature-moves-toward-thursday-night-vote-on-gov-shapiros-second-budget/
Individuals with Disabilities Education Act (IDEA), Part B, 20 U.S.C. § 1400 (2004).
PA Coalition of Public Charter Schools. (2019). Pennsylvania’s Public Cyber Charter Schools & Special Education. https://pacharters.org/wp-content/uploads/2019/05/SPED_v.2-002.pdf
PA Department of Education. (2025). Cyber Charter Annual Report. https://www.pa.gov/agencies/education/programs-and-services/instruction/elementary-and-secondary-education/charter-schools/reports-data-and-resources.html
Pennsylvania General Assembly. (2023). 2023 Act 1A. https://www.legis.state.pa.us/cfdocs/legis/LI/uconsCheck.cfm?txtType=HTM&yr=2023&sessInd=0&smthLwInd=0&act=1A&chpt=2&sctn=15&subsctn=0
Pennsylvania School Boards Association. (2024). 2024 State of Education report. https://www.psba.org/wp-content/uploads/2024/01/2024-State-of-Education-report.pdf
Public Interest Law Center. (2023, February 7). Pennsylvania’s School Funding System Declared Unconstitutional In Historic Victory For Students. https://pubintlaw.org/cases-and-projects/pennsylvanias-school-funding-system-declared-unconstitutional-in-historic-victory-for-students/
Public Interest Law Center. (2024a). Fighting for Transparency in Cyber Charter Spending. https://pubintlaw.org/cases-and-projects/establishing-transparency-in-cyber-charter-spending/#:~:text=Pennsylvania%20has%20been%20dubbed%20the%20%E2%80%9Ccyber%20charter,schools%20is%20often%20hard%20to%20come%20by.
Public Interest Law Center. (2024b, June 10). Breakthrough! PA House Approves Comprehensive School Funding Plan In Bipartisan Vote. https://pubintlaw.org/cases-and-projects/breakthrough-pa-house-approves-comprehensive-school-funding-plan-in-bipartisan-vote/
Schaeffer, K. (2023, July 24). What federal education data shows about students with disabilities in the U.S. Pew Research Center. https://www.pewresearch.org/short-reads/2023/07/24/what-federal-education-data-shows-about-students-with-disabilities-in-the-us/
Special_Ed_Report_PASWEDU_Law_Center_2022-5-24.pdf. (n.d.). Retrieved February 6, 2025, from https://www.elc-pa.org/wp-content/uploads/2022/05/Special_Ed_Report_PASWEDU_Law_Center_2022-5-24.pdf
U.S. Department of Education, I. (n.d.). About IDEA. IDEA. https://sites.ed.gov/idea/about-idea/#IDEA-History
U.S. Department of Education, O. for C. R. (n.d.). Disability Discrimination: Providing a Free Appropriate Public Education. U.S. Department of Education. https://www.ed.gov/laws-and-policy/civil-rights-laws/disability-discrimination/disability-discrimination-key-issues/disability-discrimination-providing-free-appropriate-public-education-fape