← Return to Resource Hub
Special Education at a Crossroads: What the FY25 Federal Budget Means for Districts
Marker teamed up with the LDA to unpack what the FY25 budget means for SpEd teams nationwide.
On March 20, 2025, Congress passed the final FY25 Labor-HHS-Education Appropriations Bill. While it includes some increases to federal education funding, the outlook for special education is sobering. In a year marked by inflation, staffing shortages, and growing student needs, special education leaders are being asked to do more—with less targeted support.
Here’s what district leaders need to know—and how to start planning for the challenges ahead.
1. IDEA Funding Still Falls Far Short of What’s Needed
The bill allocates $15.5 billion to IDEA Part B—a modest $175 million increase over FY24. But this barely moves the needle on federal responsibility. Despite the 40% federal share originally promised when IDEA was passed in 1975, the current contribution remains stuck around 13%.
For districts already stretched thin, this means continuing to subsidize federally mandated services using local funds, grant dollars, or general education budgets. Without full funding, the gap between legal obligations and resourcing will continue to grow—placing unsustainable pressure on special education teams.
2. Staffing Crisis Persists Despite New Investment
While the bill includes $90 million for IDEA Part D’s Personnel Preparation program, the scale of the investment does not match the magnitude of the staffing shortage. Districts are still struggling to recruit and retain qualified special educators, SLPs, and school psychologists—and many lack the internal capacity to build their pipelines.
Without meaningful structural support, federal dollars may fall short of driving the systemic change needed to solve the workforce crisis. Leaders should push at the state level for initiatives that make these funds usable—such as partnerships with local universities, licensure streamlining, or retention bonuses.
3. Key Grant Programs Offer Flexibility—but Require Proactive Action
The bill includes $2 billion for Title IV-A grants and $1.38 billion for the Education Innovation and Research (EIR) program. These flexible funds can be used to support tools that improve efficiency and access, such as AI-powered assistive technologies, IEP management software, and automated documentation tools.
However, these funds are not SpEd-specific. Without direct advocacy, special education priorities may be overlooked in local allocations. Leaders should coordinate now with district grants, federal programs, and IT teams to ensure their needs are reflected in spending plans.
4. Expect Increased Accountability—Without Increased Support
The federal shift toward outcome-based spending means districts may soon be asked to show how funding improves student learning—not just procedural compliance. In theory, this is a positive move. But in practice, it risks increasing administrative burden without the resources to meet it.
Districts need better tools and automation to meet rising expectations without overloading staff. Solutions like AI-assisted report writers can reduce documentation time and free up educators to focus on instruction, compliance, and student support.
5. Future Cuts Could Hit Special Education Even Harder
While FY25 funding is relatively stable, future risks are already emerging. The White House has proposed consolidating many K–12 programs in FY26—including IDEA personnel grants—into a single block grant. If passed, this could reduce transparency and weaken protections for special education.
Such changes would give states more discretion over how they spend federal dollars—but would also make it harder for districts to advocate for the funding they need. Without dedicated line items, special education services could become even more vulnerable to competing district priorities.
What Now: Preparing for Leaner Years Ahead
Special education leaders are facing a pivotal moment. Despite marginal funding increases, the direction of federal policy signals a need for districts to adapt quickly—and creatively.
Start by:
- Auditing current staffing models and identifying gaps
- Exploring how general grant funds can be applied to SpEd tools and infrastructure
- Piloting low-lift technologies to reduce burnout and increase team capacity
- Partnering across departments—finance, HR, federal programs—to advocate for smarter allocation of flexible dollars
Above all, this is a moment for leadership. The system is not moving fast enough to meet student needs. Districts that act now—by getting creative, staying informed, and advocating loudly—will be best positioned to protect and strengthen services for students with disabilities.
This post was developed in collaboration with the Learning Disabilities Association (LDA) and Marker Learning to support special education leaders in navigating the evolving federal landscape. Stay tuned for updates and advocacy resources in the months ahead
Written by The Marker Learning Team in partnership with the Learning Disabilities Association of America (LDA)
