Preparing students with disabilities for competitive, integrated employment is best achieved by focusing on the individual needs of each student. That requires shifting the education decision-making process to one that includes parents, teachers, and school stakeholders working in conjunction to achieve a truly child-centered approach. Doing so can help to inform, counsel, and guide students and their parents toward preparing for, and transitioning to, post-secondary education and working in a market-economy job for real pay. District schools that receive funding through the federal Individuals with Disabilities Education Act (IDEA) too often are unable to effectively identify and cultivate the talents and skills, gifts and calling, of students with disabilities, placing them at serious risk of segregation from the general population and relegating them to a life in sheltered workshops, surrounded only by other workers with disabilities.REF Enabling parents of children with special needs to move their federal IDEA funding to a school, service provider, or treatment plan of their choice is a long-overdue reform that would help parents to meet the unique needs of their child.

Currently, IDEA funding largely supports children in public schools; 43 states now allow students to attend public charter schools, and 29 states, the District of Columbia, and Puerto Rico offer some form of private school choice.REF One such private school choice program, now available in five states, is the education savings account (ESA) option. With an ESA, students with special needs (along with some other eligible populations in some states) can receive a portion of what the state would have spent on them in the public system in a restricted-use account. Parents can then use those funds for any education-related purpose, including private school tuition, online learning, and special education services and therapies. Although in many of these states private school choice options are specifically geared toward students with special needs, federal IDEA funding has yet to follow suit—limiting the education opportunities of students with developmental or physical disabilities. By making federal IDEA funding student-centered and portable in the form of ESA-style accounts for families, this federal support can become more effective at achieving the goal of preparing children with disabilities for integrated, competitive employment and independent living.

The Individuals with Disabilities Education Act

IDEA, signed into law in 1975 as the Education of All Handicapped Children Act, has been called “one of the most popular pieces of federal education legislation ever enacted.”REF Currently, public schools receive federal IDEA funding for special needs students ages three to 21 through a formula that provided $13.5 billion to states in fiscal year (FY) 2019. During the 2017–2018 school year, some seven million children received services at their public schools funded through IDEA.REF School districts are required under federal law to identify and evaluate students with special needs, and determine based on disability which children are eligible for IDEA special education services. Individualized Education Plan (IEP) teams develop an IEP for each child accessing IDEA services, specifying the services to be provided.

The law, designed both to provide additional funding from the federal level to children with special needs and to guarantee equal education rights to these students has four overarching provisions:

1. Students with special needs have a right to a free and appropriate public education (FAPE), made available in either a public or private school;
2. Schools must work with parents to design IEPs for students with special needs;
3. In school, children should be taught in the “least restrictive environment” possible; and
4. Parents have due-process rights under the law to appeal the education accommodations made or not made for their child.REF

The law’s popularity likely stems primarily from its legal establishment of the right to education for children with special needs. Prior to IDEA, an estimated four million children with special needs were denied access to K–12 education.REF In 1970, five years prior to the passage of the Education for All Handicapped Children Act, the precursor to IDEA, schools were educating just one in five children with special needs. Some states even had laws in place at the time excluding children who were blind, deaf, or who had developmental delays from accessing education.REF IDEA’s requirement that those children receive a “free and appropriate public education” changed the responsibility that schools had to these students.

Implementation has not been without its challenges, and despite the spirit of the law, families too often find themselves in costly litigation in an effort to secure the special education services to which their children are entitled in public schools. Parents and school officials can have differing views on how to best serve a child, and the resulting IEP protocol can end up being determined in the courtroom rather than the classroom.

For example, although school districts are required by law to pay for special education and related services for children with special needs—the FAPE requirement—if a child’s public school is unable to make FAPE available, the school district must pay for a “private placement,” enabling the child to attend a private school. The public school district and the child’s parents may disagree about whether the district has met its FAPE requirement, and whether the public school is in fact providing an appropriate education.

Moreover, parents may enroll their child in a private school if they feel the public school is not meeting its FAPE obligations prior to receiving a referral from the school district, and then seek private school tuition reimbursement from the district after the fact (the tuition-reimbursement approach). A public school district can also determine that it is unable to provide FAPE to a child, and offer to place a child in a private school (the private-placement approach).

Disagreements between parents and the district over whether a school is providing FAPE, and subsequent disagreements about private placements or tuition reimbursements, can result in costly legal battles and significant time spent in the courtroom.REF Although cases involving litigation are rare, this does not necessarily indicate that most parents are satisfied. Rather, as professors Marcus Winters and Jay Greene explain, “Litigating against a school district costs time and money that many parents don’t have…. [D]etermined public schools can outspend and outlast almost any family.”REF

Private Placements. Under IDEA, there are two ways a student with special needs can be placed in a private school using public funding: (1) public school districts can pursue a private placement for a child with special needs whom they are unable to accommodate, or (2) a child’s parents can request that their child be enrolled in a private school (parental placement). Approximately 1.3 percent of students served under IDEA were parentally placed in a private school in the fall of 2017, the most recent year for which data are available.REF Families and districts can pursue private placements if a given district school lacks the facilities or specialized staff to meet the needs of a child with a disability. Students with special needs who are placed in a private school under IDEA’s private placement provisions are disproportionately students who have multiple disabilities, experience “emotional disturbance,” or are on the autism spectrum.REF

Regardless of whether it is the parent or district pursuing a private placement, the practice demonstrates that IDEA has a built-in mechanism for a child with special needs to attend a private school if the district cannot meet his or her needs. However, this process can be cumbersome for the parent, and can be dependent on the district for a referral—something a district may be reticent to do if it means a loss of that student’s funding. IDEA portability would give parents an automatic private placement option without having to debate the district or engage in protracted legal battles to secure services that are appropriate for their child.

Shifting from a system of funding schools to funding special needs students directly could diminish legal battles by enabling families to personally select the services that best meet the needs of their child. By enabling parents to receive their child’s portion of federal IDEA funding in the form of an ESA—instead of having those funds earmarked for public schools where their child may or may not be able to access the services he or she needs—parents would have the option of directing funds to schools, special education specialists, private tutors, and behavioral therapies of their choice. Portable IDEA funding could also enable youth who are among the most vulnerable IDEA recipients—those who qualify for Supplemental Security Income (SSI)—to increase their employment prospects, self-sufficiency, and post-secondary-education engagement as a result of receiving targeted services and supports.

Enabling Young SSI Recipients to Transition to Adulthood and Gainful Employment

Perhaps the most vulnerable students who are eligible for IDEA funding are those children who also qualify for SSI support due to meeting a range of complex income and asset criteria. There are roughly 1.1 million children on SSI,REF whereas more than 7 million children are eligible for IDEA funding. Even though SSI includes infants, it could be that one of every seven students who are eligible for IDEA funding represents an SSI recipient.

While the school system is technically supposed to provide SSI recipients a formal system of supports, in reality many school systems are unable to meet the individual needs of some children, particularly those with special needs. SSI recipients are more likely to be students in poorer school districts where they may face even fewer options for tailored services that meet their specific needs.REF

Urban researchers, citing a number of relevant studies concerning employment outcomes for SSI youth, point to vocational education as a driving factor in enabling SSI youth to transition to employment after graduation. And yet, movements toward teaching aimed at standardized test taking and to prepare children for college have led to a decline in vocational education in public schools,REF with especially harmful implications for students with certain intellectual and developmental disabilities. The Government Accountability Office pointed out that although youth with disabilities who are eligible for IDEA funding can be connected to vocational services through their schools, it is unclear how often such connections occur as neither schools nor the Social Security Administration collect such data.REF

In addition, past demonstration projects, such as the Youth Continuing Disability Review (YCDR), identified that major obstacles to helping adolescent SSI recipients transition to work included a lack of coordinated services across key stakeholders in the school system, as well as ignorance of special SSI program rules. The YCDR provided individual assessments, informed and encouraged participants and their parents to prepare for employment, and facilitated service connections.REF

In many of these institutional attempts to help young people with disabilities, the missing link appears to be parental involvement and facilitation. Parents play a critical role in the development of their children and accompany them through various stages of life. Parents also know the special needs and particular aptitudes and desires of their children best, and have a natural interest in seeing their children thrive and flourish.

The IEP process associated with IDEA funding prescribes a collaborative process for parents, educators, and other stakeholders to work together in defining educational and transitional goals and mechanisms to achieve them. Yet, in reality, parents are often treated as observers who are being informed about the IEP for their child rather than as active participants in its establishment and execution. James Austin provides insights from several studies that indicate that opportunities for parents to participate in the IEP process are “fairly rigid and intimidating” and that parents frequently “felt not treated as equal members of the planning process.”REF A child’s educational opportunity—and by extension her dreams and chance for a good life—can be lost when this happens.

Micro-ESAs that would put parents in charge of their children’s IDEA funding allocation carry the promise of enabling and motivating greater parental engagement, and of leading to better educational and employment outcomes for children with disabilities, including those who receive SSI.

From Funding Systems to Funding Students—the Research on Education Choice

A growing body of empirical evidence suggests that school choice policies increase parental satisfaction with their children’s schooling, lead to higher levels of academic achievement and attainment, reduce inequalities in the education options available to students, and, in general, enable students to be better matched with learning options that meet their unique needs.REF To date, researchers have conducted 16 randomized-controlled-trial (RCT) evaluations of the impact of private school choice programs on student academic achievement. Ten of the 16 find positive benefits on math or reading scores for some or all students,REF four find null effects,REF and two—unique to a program in Louisiana—find negative effects.REF (See Table 1.)

Researchers have conducted eight rigorous studies (including five RCTs and three matching studies) on the impact of private school choice on student academic attainment. Six find positive impacts on academic attainment for some or all students,REF two find null effects,REF and no studies to date have identified negative effects on academic attainment. (See Table 2.)

Yet, 95 percent of students ages six to 21 who received IDEA funding in fall 2017 were enrolled in traditional district schools.REF Despite students’ rights to a “free and appropriate education,” as directed by IDEA, many students with intellectual and developmental disabilities fail to receive adequate supports to enable their school-to-work or school-to-post-secondary-education transition. Empirical research shows that when parents can exercise school choice options, such as vouchers, tax credit scholarships, and ESAs, students are more likely to obtain necessary services, even in the absence of legal mandates. In a survey of participants in Florida’s McKay voucher program, only 30.2 percent of voucher participants said they received all services required under federal law from their public school, while 86 percent reported the private school they were able to attend through the McKay program provided all the services they promised to provide.REF

Indeed, the McKay voucher program has been particularly successful at meeting the needs of students with special needs. Researchers Marcus Winters and Jay Greene found that parents reported that their children received higher-quality services in the private school setting financed with their McKay vouchers than they had received in the public system. The scholarship program has also helped to level the playing field, with children from lower-income families obtaining access to private schools at about the same rate as children with special needs from higher-income families. As Winters and Greene explain, “by allowing private placement without the cost of a legal struggle, it increases access to private placement for lower-income families.”REF

IDEA Micro-ESAs: ESAs for a Customized Learning Experience

Federal policymakers could do a better job of serving students with special needs—and more readily guarantee that they are able to access a “free and appropriate public education”—by enabling eligible students to move their share of IDEA funding to education services and providers of choice. Public education means providing public funding so that the public can access education, not relegating students to government school services or a fraught litigation process in order to access the education dollars their taxes are underwriting. Separating the financing of IDEA from the delivery of services through the creation of micro-ESAs would be a significant step forward in modernizing IDEA to serve families today.

Mechanics of an IDEA Micro-ESA. Despite legal protections in IDEA, the Americans with Disabilities Act, and the Workforce Innovation and Opportunity Act, too many youth with disabilities still fail to make a successful transition to post-secondary education and work. Updating the distribution of IDEA funding to make it student-centered and portable will give families additional tools to contract with the services and schools that are best positioned to meet the needs of their child. Currently, public schools receive federal IDEA funding for students with special needs ages three to 21 who have an IEP, through a formula that provided $13.5 billion to states in FY 2019, $12.8 billion of which funded Part B of the law. Approximately 95 percent of IDEA funding flows through Part B (Assistance for Education of all Children with Disabilities), which is determined by a state’s population of children ages three through 21 with disabilities in conjunction with the state’s share of children ages three through 21 living in poverty. During the 2017–2018 school year, some seven million children received services at their public schools funded through IDEA.REF Congress should modernize the existing IDEA program to allow students to access at least 90 percent of their federal per-pupil IDEA funding in the form of a micro-ESA. Eligible students could remain in their public school or private school placement, but would be able to use their micro-ESA to pay for special education services of their choice. Eligible students could also exit the public system completely, taking their share of IDEA funding with them to a private school or education option of choice. These micro-ESAs could be used to pay for private tutors, private school tuition, behavioral therapists, educational supports such as manipulatives (for instance, number cubes, clocks, and color tiles) and educational technology, and other services and products to help them succeed. Other services and products could include:

• Curriculum and textbooks
• Assistive technology, such as a talking computer
• Physical education instructors
• Applied behavioral therapy
• Occupational therapy
• Speech, vision, and hand therapy
• Individual private school courses
• Online courses
• Equine therapy and therapeutic riding
• Fees for diagnostic testing, advanced placement tests, and nationally norm-referenced tests
• Music, art, dance, and drama instruction
• Credentialed private tutors and tutoring centers

Award amounts would vary by state, with the amount of allocation based on the existing IDEA formula (a state’s population of children ages three through 21 with disabilities in conjunction with the state’s share of children ages three through 21 living in poverty). However, instead of funds automatically flowing to the district school to which an eligible student is currently assigned, at the parent’s discretion, the family could choose to receive those funds in the form of a micro-ESA. Families satisfied with the FAPE services provided by their district school could continue in that existing arrangement, with the school receiving the student’s IDEA funds to provide education services and required accommodations. Unused funds could also be allowed to roll over from year to year, and to roll into a college savings account.

For example, 90 percent of the per-pupil federal IDEA funds equated to approximately $2,100 in Alabama in FY 2019. For students in Illinois, 90 percent of IDEA funding equaled approximately $1,600; in Texas, approximately $2,200; and in Nevada, approximately $1,500 per child, per year.

Five states—Arizona, Florida, Mississippi, North Carolina, and Tennessee—operate ESA programs today. Arizona, which pioneered the approach in 2011, provided states and federal policymakers a guidebook on how to maintain high levels of transparency over the taxpayer funds allocated through the program. Account funds can only be spent on approved education-related services, products, and providers; any misuse of funds is rectified with the next ESA distribution into a parent’s account; and ESAs are subject to audits by the Arizona Department of Education. If the state uncovers evidence of substantial misuse, the department can refer the account holder to the attorney general.

The Next Generation of Special Education Services. Modernizing the federal IDEA program to better meet the needs of children with special needs is a first and critical step in supporting these students. States should also follow the lead of Arizona, Florida, Mississippi, North Carolina, and Tennessee and enact state-level ESA programs for students with special needs.

Existing ESA programs in the states are largely geared toward improving later life outcomes for students with special needs. Making federal IDEA dollars portable in the form of micro-ESAs, enabling families to use these funds to pay for private special education services and therapies, would fit neatly within the current landscape of public programs intended to promote student transition from school to meaningful employment. Most important, it would clear away barriers—financial and legal—to students getting the education services to which they are entitled under law. It is an IDEA whose time has come.

Lindsey M. Burke, PhD, is Director of the Center for Education Policy and Will Skillman Fellow in Education, of the Institute for Family, Community, and Opportunity, at The Heritage Foundation. Romina Boccia is the former Director of the Grover M. Hermann Center for the Federal Budget, of the Institute of Economic Freedom, at The Heritage Foundation.