Individuals with Disabilities Education Act (IDEA): Possible Voucher Issues

Individuals with Disabilities Education Act (IDEA): Possible Voucher Issues

Order Code RL31489
Report for Congress
Received through the CRS Web
Individuals with Disabilities Education Act (IDEA):
Possible Voucher Issues
Updated April 8, 2003
Richard N. Apling
Specialist in Social Legislation
Domestic Social Policy Division
Nancy L. Jones
Legislative Attorney
American Law Division
David P. Smole
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Individuals with Disabilities Education Act (IDEA):
Possible Voucher Issues
Summary
The 108th Congress is considering reauthorization of the Individuals with
Disabilities Education Act (IDEA) program (the main federal program providing
special education and related services to children with disabilities). Proposals that
would provide increased parental choice under IDEA are likely to be debated during
reauthorization.
This report provides background on current federal choice programs and on the
Florida McKay Scholarship program, which provides scholarships for children with
disabilities who are enrolled in the state’s public schools to attend other public
schools or to attend participating private schools. It also describes and analyzes
legislation introduced in the 108th Congress (e.g., H.R. 1373) that would authorize
school voucher programs under the IDEA. The report concludes with a discussion
of possible issues that a federal special education voucher program might raise.
Congressional consideration of school choice is not new. The No Child Left
Behind Act (P.L. 107-110), amended and reauthorized the Elementary and Secondary
Education Act (ESEA), to contain several provisions to maintain and expand federal
support of school choice for pupils and their families. For example, the ESEA
requires that students attending schools identified as needing improvement be
provided with the option of transferring to another school in the school district,
consistent with state law.
States and localities also operate school choice programs. The Florida McKay
Scholarship program provides school choice opportunities specifically for children
with disabilities. The program offers parents of children with disabilities the
opportunity to transfer their child to another public school or to enroll him or her in
a participating private school if they are not satisfied with their child’s educational
progress. The scholarship amount is the lesser of the tuition and fees of the private
school, or the amount of state funds the student would have generated if attending a
Florida public school. If the value of the scholarship is insufficient to cover the full
cost of the tuition of the private school, parents are permitted to contribute funds to
cover the shortfall. Over 8,000 students and more than 450 schools currently
participate in the program.
Proponents and opponents of voucher programs raise a number of important
issues, such as whether expanded school choices and the increased competition that
vouchers might engender would improve or weaken public education. A federal
voucher program for children with disabilities might raise additional issues. Perhaps
the key set of issues is the degree to which the rights and obligations conferred by
IDEA would continue to be provided by private schools accepting federal special
education vouchers.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of Federal Choice Programs and Proposals . . . . . . . . . . . . . . . . . . 2
Florida’s McKay Scholarship Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Legislation in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Selected Issues for Choice Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Background on School Choice Programs . . . . . . . . . . . . . . . . . . . . . . . 6
Overview of IDEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Possible Additional Issues with Respect to IDEA . . . . . . . . . . . . . . . . . 8
Would Students’ Rights Continue? . . . . . . . . . . . . . . . . . . . . . . . . 8
Would State and Local Funding Be Included? . . . . . . . . . . . . . . . 8
How Would Voucher Funding Be Structured? . . . . . . . . . . . . . . . 9
Could Least Restrictive Environments Be Provided? . . . . . . . . . . 9
Who Would Be Eligible for Vouchers? . . . . . . . . . . . . . . . . . . . . 10
Would Sufficient Choice Be Provided? . . . . . . . . . . . . . . . . . . . . 11
Is There an Incentive to Over-identify Children as Having
Disabilities and Would the Provision of Vouchers
Alleviate this Problem? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Individuals with Disabilities Education Act
(IDEA): Possible Voucher Issues
Introduction
Congress is considering reauthorization of the Individuals with Disabilities
Education Act (IDEA) program, the primary federal program providing special
education and related services to children with disabilities.1 Options being discussed
during IDEA reauthorization include increasing parental choice,2 which also was a
recommendation of the final report of the President’s Commission on Excellence in
Special Education.3
This report provides a brief overview of school choice programs, including
current and proposed federal programs and the Florida McKay Scholarship Program,
which provides vouchers for children with disabilities in the state of Florida. The
report provides a brief summary of general issues related to choice programs and a
discussion of additional issues related to school choice for children with disabilities.
1 H.R. 1350, 108th Cong., a bill to amend IDEA, has been introduced in the House and was
marked up the House Subcommittee on Education Reform on April 2, 2003. Full committee
markup is scheduled for April 9, 2003. This bill currently contains no provisions related to
parental choice. For a discussion of H.R. 1350, see CRS Report RL31830, The Individuals
with Disabilities Education Act (IDEA): Selected Changes that Would be Made to the Law
by H.R. 1350, 108th Congress, by Nancy Lee Jones and Richard N. Apling.
2 See, for example, Chester E. Finn, Jr., Andrew J. Rotherham, and Charles R. Hokanson,
Jr., “Conclusions and Principles for Reform.” In Chester E. Finn, Jr., Andrew J. Rotherham,
and Charles R. Hokanson, Jr. (eds.) Rethinking Special Education for a New Century
(Washington, D.C.: Thomas B. Fordham Foundation and Progressive Policy Institute, May
2001). See also Marie Gryphon and David Salisbury, Escaping IDEA: Freeing Parents,
Teachers, and Students through Deregulations and Choice, Cato Institute, Policy Analysis,
no. 444, July 10, 2002.
3 President’s Commission on Excellence in Special Education, “A New Era: Revitalizing
Special Education for Children and their Families” (July 1, 2002),
[http://www.ed.gov/inits/commissionsboards/whspecialeducation/reports/index.html]. The
Commission’s recommendation states in part: “IDEA should allow state use of federal
special education funds to enable students with disabilities to attend schools or to access
services of their families choosing, provides states measure and report outcomes for all
students benefitting from IDEA funds.” At 35.

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Overview of Federal Choice Programs and Proposals4
On January 8, 2002, the President signed P.L. 107-110 (H.R. 1), The No Child
Left Behind Act, which amended and reauthorized the Elementary and Secondary
Education Act (ESEA).5 P.L. 107-110 contains several provisions to maintain and
expand federal support of school choice for pupils and their families. It requires, as
part of Title I-A accountability provisions, that students attending schools identified
for school improvement after having not made adequate yearly progress (AYP) for
2 consecutive years be provided intradistrict public school choice, consistent with
state law. Further, it requires that students from poor families attending schools that
fail to make AYP for 3 consecutive years be provided the option of obtaining
supplementary or tutorial services from providers of their choice.6 Additionally, the
ESEA provides that public school choice must be made available to pupils who are
victims of violent crimes or who attend unsafe schools. The ESEA also authorizes
federal funding for the Public Charter Schools Program to assist charter school start-
up and for facilities; the use of Innovative Programs funds for activities to promote,
implement, or expand public school choice; Voluntary Public School Choice
Programs, which provide competitive grants for transportation in support of public
school choice and tuition transfer payments and school enhancements in schools
receiving transfer students; and the Magnet Schools Assistance program, under which
grants are provided to LEAs to create special curriculums designed to attract students
from different racial backgrounds. Previously, during floor debates of H.R. 1, both
the House and the Senate rejected amendments that would have authorized federal
aid to support private school choice programs.
On June 7, 2001, the President signed into law P.L. 107-16 (H.R. 1836), the
Economic Growth and Tax Relief Reconciliation Act of 2001. Among other
provisions, this legislation modified the Education Individual Retirement Account
authority to increase the annual contribution limit to $2,000 and to permit these
accounts to support qualified elementary and secondary school expenses. Qualified
expenses include “expenses for tuition, fees, academic tutoring, special needs
services in the case of a special needs beneficiary, books, supplies, and other
equipment” for attendance at public, private, or religious schools.7 Subsequently,
these accounts have been renamed Coverdell Education Savings Accounts.8
4 For further information on current education choice programs and proposals, see CRS
Issue Brief IB98035, School Choice: Current Legislation, by David P. Smole. For a
discussion of IDEA and NCLB see CRS Report RL31838, The Individuals with Disabilities
Education Act (IDEA): Implications of Selected Provisions of the No Child Left Behind Act
(NCLB), by Nancy Lee Jones and Richard N. Apling.
5 Note that IDEA (20 U.S.C. 1400 et seq.) is not part of ESEA, although children with
disabilities may participate in ESEA programs.
6 For further information on supplemental educational services, see CRS Report RL31329,
Supplemental Educational Services for Children from Low-Income Families Under ESEA
Title I-A, by David P. Smole.
7 Internal Revenue Code, Section 530(b)(4)(A)(i).
8 For further information on Coverdell Education Savings Accounts, see CRS Report
(continued...)

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On February 3, 2003, in his FY2004 budget request, the President proposed two
new initiatives supportive of school choice: a refundable tax credit for 50% of up to
the first $5,000 in costs associated with attending a different public or private school,
and paid by the taxpayer, for families whose children are assigned to a public school
that has failed to make AYP according to ESEA requirements; and a choice incentive
fund. Sundry bills have been introduced during the 108th Congress that would
provide increased federal support for school choice.9
Florida’s McKay Scholarship Program
In 2000, the Florida legislature established the John M. McKay Scholarships for
Students with Disabilities Program. The program was substantially revised in 2001.10
The program allows parents of disabled children who are dissatisfied with their
child’s progress to request that their child be placed in another Florida public school
or be provided with a scholarship to support the child’s attendance at a participating
private school in the state. The program is open to K-12 students with disabilities11
who attended a Florida public school in the prior school year. Students with
disabilities who are already enrolled in private schools are not eligible.
If the parent opts for a scholarship to a private school, the parent must obtain the
student’s admission to a participating private school and request the scholarship from
the school district at least 60 days prior to the first scholarship payment. In turn, the
school district must inform the parent of all options available, including enrolling in
another public school within the district or enrolling the student in a public school
in an adjacent school district that offers the services the child requires and that has
space available. Parents choosing either private school placement or placement in
another school district are responsible for transporting the child to the new school.
Parents also have the option of returning their child to the public school system or
choosing another participating private school if they continue to be dissatisfied with
services their child receives.
Both sectarian and non-sectarian schools may participate in the program.
However, all schools must meet certain state requirements in order to be eligible:
! “Demonstrate fiscal soundness,”
8 (...continued)
RL20289, Education Savings Accounts for Elementary and Secondary Education, by Bob
Lyke and James B. Stedman.
9 For further information on the administration’s school choice proposals, and legislation
on school choice in general introduced during the 108th Congress, see CRS Issue Brief
IB98035.
10 Fla. Stat. Ann. §229.05371.
11 The statute defines students with disabilities as those “who are mentally handicapped,
speech and language impaired, deaf or hard of hearing, visually impaired, dual sensory
impaired, physically impaired, emotionally handicapped, specific learning disabled,
hospitalized or homebound, or autistic.” (229.05371 (1)) Note that this definition differs
somewhat from the IDEA definition of a child with a disability (Section 602 (3)).

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! Notify the state department of education by May 1 of the preceding
school year of their intent to participate and grade levels and services
that will be available,
! Comply with federal antidiscrimination provisions with respect to
race, color, and national origin (20 U.S.C. 2000d),
! Meet state and local health and safety requirements,
! “Be academically accountable to the parent for meeting the
educational needs of the student,”
! Meet certain minimum teacher requirements,
! Comply with general Florida laws pertaining to private schools, and
! “Adhere to the tenets of its published disciplinary procedures prior
to the expulsion of a scholarship student.”
In addition, the parent and the student accepting a scholarship must fulfill
certain obligations and accept certain responsibilities. For example, the student must
attend the school throughout the school year unless excused for good cause, such as
illness, and must comply with the school’s rules of conduct. The parent must
participate in the school’s parent involvement activities, unless excused. Perhaps of
greatest importance, the statute notes that, in accepting a scholarship, the parent “is
exercising his or her parental option to place his or her child in a private school.”
The U.S. Department of Education (ED) has concluded that if the state of Florida and
local educational agencies (LEAs) in the state have made a free appropriate public
education (FAPE) available to eligible children with disabilities, as IDEA requires,
“but their parents elect to place them in private schools through the Scholarship
Program, then such children are considered ‘private school children with disabilities’
enrolled by their parents .... Under IDEA, such parentally placed private school
students with disabilities have no individual entitlement to ... special education and
related services in connection with those placements.”12 ED also points out that
federal nondiscrimination laws with respect to individuals with disabilities do not
apply directly to participating private schools because Title II of the Americans with
Disabilities Act (ADA) does not apply to private schools13 and Section 504 of the
Rehabilitation Act of 1973 depends on the acceptance of federal funds.14
The amount of the scholarship is the lesser of the private school’s tuition and
fees or the amount of state funds the student would have generated if attending a
Florida public school. If the value of the scholarship is insufficient to cover the full
cost of the tuition of the private school, the shortfall must be covered such as by
12 U.S. Department of Education letter to John W. Brown, School Board Attorney, Pinellas
County School Board, Largo, Florida, March 30, 2001. For a more detailed discussion of
IDEA and private schools see CRS Report 98-854, Individuals with Disabilities Education
Act: Services in Private Schools under P.L. 105-17, by Nancy Lee Jones.
13 Title II of the ADA, 42 U.S.C. §12131 et seq., prohibits discrimination against individuals
with disabilities by a public entity. A public entity is defined in relevant part as a state or
local government or any department, agency, special purpose district, or other
instrumentality of a state or states or local government.
14 Section 504, 29 U.S.C. §794, in relevant part prohibits discrimination against individuals
with disabilities in any program or activity that receives federal financial assistance.

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students’ parents, outside scholarships, or tuition reduction.15 Payments of the
scholarships are made quarterly in the form of an individual warrant to the parent,
which the parent then endorses over to the private school for deposit into its account.
In school year 2000-2001, the first year of the program, an estimated 1,000 students
and 139 schools participated. In the second year, increased numbers of both students
(5,000) and schools (400) participated.16 In school year 2002-2003, over 8,000
students participate in the McKay Scholarship program. The median scholarship
amount is $6,808 and total expenditures for the program will exceed $54 million in
school year 2002-2003.17
The McKay Scholarship program is considered by some as a model program for
providing greater school choice to parents of children with disabilities and by others
as one under which parents sometimes unwittingly give up rights afforded by the
IDEA. Some supporters of school choice would like to see the Congress turn to the
McKay Scholarship program as an example of school choice provisions that could
be incorporated into the IDEA during reauthorization.18 Some suggest that the
Congress amend the IDEA to allow states to opt out of IDEA requirements if they
implement school choice programs similar to Florida’s.19 Others see school choice
programs modeled after Florida’s as having the potential to undermine the
protections and educational benefits currently afforded under the IDEA and as not
holding private schools accountable.20 Supporters counter that private schools are
directly accountable to parents and should not be burdened with excessive regulatory
accountability requirements.
15 This is unlike the Florida Opportunity Scholarship program in which schools cannot
charge tuition greater than the value of the scholarship.
16 Testimony by Ms. Diane McCain before the House Subcommittee on Education Reform,
May 8, 2002. (Referred to hereafter as McCain Testimony). Some have attributed the
substantial growth in the number of participating students and schools to changes made in
the program in 2001. One significant change allows private schools to charge parents the
difference between the amount of the school’s tuition and fees and the amount of the
scholarship. Apparently in the first year of the program, schools could only charge parents
the amount of the scholarship. See “McKay Scholarships: Florida’s Special Vouchers.”
Draft paper by Carolyn D. Herrington and Virginia R. Weidner, College of Education,
Florida State University, January 2002. (Referred to hereafter as Herrington and Weidner.)
17 David F. Salisbury. “Lessons From Florida: School Choice Gives Increased Opportunities
to Children with Special Needs,” Cato Institute Briefing Papers, no. 81, March 20, 2003,
p. 5.
18 Krista Kafer, “Florida McKay Scholarship Program Provides Model for Federal
Legislation,” The Heritage Foundation, WebMemo #234, March 25, 2003.
19 David F. Salisbury. “Lessons From Florida: School Choice Gives Increased Opportunities
to Children with Special Needs,” Cato Institute Briefing Papers, no. 81, March 20, 2003,
p. 9.
20 “Jeopardizing a Legacy: A Closer Look at IDEA and Florida’s Disability Voucher
Program,” People for the American Way Foundation and Disability Rights Education &
Defense Fund, March 6, 2003.

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Legislation in the 108th Congress
In the 108th Congress, legislation has been introduced (H.R. 1373) to amend the
IDEA to authorize funding for grants, contracts, and cooperative agreements with
eligible entities to support the planning, design, and implementation of state school
choice programs for students with disabilities.21 In states that have school choice
programs for students with disabilities, the bill would authorize the use of IDEA
funding to supplement state program funding. The bill also would provide that the
authorization of a parent to exercise private school choice under such a program
would fulfill the state’s obligation to provide a free appropriate public education to
the parent’s child while the child is enrolled in the private school, and would provide
that a private school’s acceptance of IDEA funding deems it to be providing a free
appropriate education and to be in compliance with Section 504 of the Rehabilitation
Act of 1973. The bill would also authorize the use of IDEA funding to support the
accommodation of students with disabilities who are eligible to receive supplemental
education services under ESEA.
Selected Issues for Choice Programs
This section begins with a brief overview of general issues sometimes raised
regarding school choice programs. It next provides a summary of IDEA
requirements and then a discussion of additional issues that could arise with respect
to a federal special education voucher program.
Background on School Choice Programs. In general, school choice
proposals have been made with an intent to increase the range and quality of
educational opportunities available to pupils, such as those from low-income
families, those who attend low-performing schools, and those whose families seek
an education provided by an entity other than their local public school. Some
proponents also have suggested that the availability of school choice will improve
public schools through market competition. Some opponents have expressed concern
about potential negative effects on public schools and their pupils, including the
redirection of public education resources and an erosion of the ideal of a common
public education for all. Additionally, some aspects of school choice have raised
constitutional questions, especially when involving religiously affiliated schools.22
Although a detailed discussion of this issue is beyond the scope of this report, the
Supreme Court recently held that a government educational assistance program does
not run afoul of the establishment clause if it is neutral with respect to religion and
provides assistance to a broad class of citizens who in turn direct the aid to schools
of their choice, which may include religiously affiliated schools.23
21 As noted supra, note 1, H.R. 1350, to bill to amend IDEA, has been introduced in the
House.
22 For a detailed discussion of these constitutional issues see CRS Report RL30165,
Education Vouchers: Constitutional Issues and Cases, by David M. Ackerman.
23 Zelman v. Simmons-Harris, 536 U.S. 639 (2002). For an overview of Zelman see CRS
Report RS21254, Education Vouchers: An Overview of the Supreme Court’s Decision in
(continued...)

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Overview of IDEA. School choice proposals could raise additional issues for
children with disabilities and their parents. To understand some of these issues, it is
necessary to have some understanding of the IDEA, the central federal statute dealing
with children with disabilities and special education. The IDEA both authorizes
federal funding for special education and related services24 and, for states that accept
these funds,25 sets out principles under which special education and related services
are to be provided. The requirements are detailed, especially when the regulatory
interpretations are considered. The major principles include requiring that:
! States and school districts make available a free appropriate public
education (FAPE)26 to all children with disabilities, generally
between the ages of 3 and 21; States and school districts identify,
locate, and evaluate all children with disabilities, regardless of the
severity of their disability, to determine which children are eligible
for special education and related services;
! Each child receiving services has an individual education program
(IEP) spelling out the specific special education and related services
to be provided to meet his or her needs; the parent must be a partner
in planning and overseeing the child’s special education and related
services as a member of the IEP team;
! “To the maximum extent appropriate,” children with disabilities
must be educated with children who are not disabled; and states
and school districts provide procedural safeguards to children with
disabilities and their parents, including a right to a due process
hearing, the right to appeal to federal district court and, in some
cases, the right to receive attorneys’ fees.27
23 (...continued)
Zelman v. Simmons-Harris. For a discussion of the impact of Zelman on the use of vouchers
see Andrew J. Rotherham, “Putting Vouchers in Perspective: Thinking About School
Choice After Zelman v. Simmons-Harris,” Progressive Policy Institute Policy Brief, July
2002.
24 Related services (for example, physical therapy) assist children with disabilities to benefit
from special education (20 U.S.C. §1401(22)).
25 Currently all states receive IDEA funding.
26 It should be emphasized that what is required under IDEA is the provision of a free
appropriate public education. The Supreme Court in Board of Education of the Hendrick
Hudson Central School District v. Rowley, 458 U.S. 177 (1982), held that this requirement
is satisfied when the state provides personalized instruction with sufficient support services
to permit a child to benefit educationally from that instruction and that this instruction
should be reasonably calculated to enable the child to advance from grade to grade. IDEA
does not require that a state provide sufficient resources and services to maximize the
potential of children with disabilities.
27 For additional information on IDEA requirements, see CRS Report RL31259, Individuals
with Disabilities Education Act: Statutory Provisions and Selected Issues, by Nancy Lee
Jones and Richard N. Apling.

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Possible Additional Issues with Respect to IDEA. Because of the
unique nature of IDEA as both a grants program and also a civil rights act, additional
issues could arise with respect to a federal voucher program for children with
disabilities.
Would Students’ Rights Continue? One set of issues with respect to a
potential IDEA voucher program involves the extent to which the rights of children
with disabilities and their parents guaranteed under IDEA would continue under a
federal special education voucher system. Apparently, IDEA requirements and
protections do not apply to the Florida voucher program, because federal funds are
not included in the voucher payments and because parents are determined to have
unilaterally decided to place their children in private schools. However, under an
IDEA voucher program, federal funds potentially could flow to private schools. A
central question likely would arise concerning what student and parental rights and
private school obligations would remain attached to those funds.
Clearly, any legislative language on this issue would be key in making the
determination of what rights would apply. However, it should be noted that the
student and parental rights at issue would include not only those delineated in IDEA
but also those contained in other civil rights statutes, notably Section 504 and the
Americans with Disabilities Act, as well as constitutional rights. Although ED states
that Section 504 and Title II of the ADA are not directly applicable to the Florida
McKay program, the rationale for that conclusion is that the McKay program receives
no federal funds. If federal IDEA funds were involved, that rationale would no
longer apply. In addition, private schools are covered under Title III of the ADA.28
However, Title III specifically exempts entities controlled by religious organizations
from coverage29 thus limiting ADA coverage of religiously affiliated schools. H.R.
1373 provides that the authorization of a parent to exercise private school choice
would fulfill the state’s obligation to provide a free appropriate public education.
The bill also would deem private schools accepting vouchers to be providing a free
appropriate education and to be in compliance with Section 504. H.R. 1373 does not
discuss compliance with Title III of the ADA.
Would State and Local Funding Be Included? Regardless of the receipt
of federal funds, certain constitutional rights regarding an education for children with
disabilities may apply. The constitutional rights of children with disabilities to
receive an education if education is being provided to children without disabilities
were examined in two seminal cases: PARC v. State of Pennsylvania30 and Mills v.
Board of Education of the District of Columbia.31 In essence, these cases found
constitutional due process and equal protection violations when children with
disabilities were denied education and were the impetus to the enactment of P.L. 94-
28 See 42 U.S.C. §12181 which defines public accommodation in part as “a nursery,
elementary, secondary, undergraduate, or postgraduate private school, or other place of
education.”
29 42 U.S.C. §12187.
30 343 F.Supp. 279 (E.D. Pa. 1972).
31 348 F.Supp. 866 (D.D.C. 1972).

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142, the original IDEA legislation. Although there have been few interpretations of
these constitutional rights since they were codified in the statute, it is likely that
courts would find some rights to exist even in the absence of IDEA although the
exact parameters of these rights are difficult to determine. One of the issues vouchers
would raise in this context is whether states and LEAs would be obligated to provide
funds to follow the child with a disability to a private school in addition to a voucher
for federal IDEA funds. It could be argued, based on PARC and Mills, that if a state
chooses to educate children without disabilities, it must also educate children with
disabilities and the existence of a federal voucher does not negate that responsibility.
On the other hand, it could be argued that if the state was willing to provide a free
appropriate public education and the parents opted to place their child in a private
school with the federal voucher, there are no other obligations on the state.
How Would Voucher Funding Be Structured? Other issues could arise
with respect to the mechanism for providing vouchers and the amount of the voucher.
Would states continue to receive their full IDEA formula allocation and then
distribute some portion of that allocation to parents via vouchers; or would the
federal government establish a separate source of funding to provide vouchers
directly to parents? What would be the amount of the voucher? For example, would
each child receive a voucher for the same amount, or would the amount of the
voucher be related to the type of disability? What could the voucher be used for?
For example, the voucher could be limited to tuition, or it could be used for other
expenses, such as transportation. Could private schools charge more than the amount
of the voucher (with parents making up the difference), or would tuition be limited
to the amount of the voucher? H.R. 1373 would allow federal funds allocated to
states under Section 611 of the IDEA to be used to supplement state voucher funds.
Could Least Restrictive Environments Be Provided? To the extent
that IDEA guarantees continued to be provided under an IDEA voucher program,
another set of issues could involve the student make-up of participating private
schools. As noted above, a basic principle of IDEA is that children with disabilities
are to receive services in the “least restrictive environment” (LRE). This means that
“to the maximum extent appropriate” children with disabilities are to be educated
with their nondisabled peers in regular classrooms. “Only when the nature or
severity of the disability ... is such that education in regular classes with the use of
supplementary aids and services cannot be achieved satisfactorily” can the child be
placed in a separate classroom or in a special school.32 “Inclusion” or
“mainstreaming” with children who are not disabled is not a problem for public
schools, at least in one sense, since children with disabilities usually account for 10%
or 12% of the overall enrollment.
In considering the effects of a voucher program, one might look to the
experience of public charter schools in serving students with disabilities. According
to the ED’s Evaluation of the Public Charter Schools Program, in many instances,
students with disabilities are attracted to charter schools, which often offer programs
32 See 20 U.S.C. 1412(a)(5(A).

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targeted to such students.33 However one also could imagine, under a voucher
system, private schools that specialize in serving children with certain disabilities.
(Such schools exist now for serving certain relatively severely disabled children.)
These specialized private schools might attract few, if any, nondisabled children.
Thus children in such schools might not be educated with their nondisabled peers,
even if those children’s disabilities were mild enough to permit their being educated
full time in regular public classrooms.34
Who Would Be Eligible for Vouchers? Another set of issues involves the
criteria under which parents and students could participate in an IDEA voucher
program. As discussed above, some federal public choice programs are linked to
evidence over time of school failure. For example, the No Child Left Behind Act
would only authorize intradistrict public school choice for students attending schools
that had been identified for school improvement after not making adequate yearly
progress for 2 consecutive years. On the other hand, the Florida McKay Scholarships
are available to parents who express dissatisfaction with their child’s educational
progress.35 The nature of participation criteria could significantly influence the
popularity of an IDEA voucher program. For example, some could argue that the
popularity of the Florida program can be attributed, in part, to the ease with which
parents can demonstrate eligibility. Eligibility for Florida’s other voucher program
— Opportunity Scholarships — is based on school performance. To be eligible to
transfer to a high performing public school or receive a voucher to attend a private
school, a student must be attending a school that has failed, i.e., it is rated as an “F”
school for 2 years in a 4-year period. Perhaps because an entire school must fail,
rather than just a parent being dissatisfied, participation in this program, according
to at least one report, is more modest: during its first year, only two schools were
judged as “failures” and only about 140 students either transferred to a higher
performing public school or took advantage of the voucher to attend a private
33 Lee Anderson, et. al., A Decade of Public Charter Schools: Evaluation of the Public
Charter Schools Program: 2000-2001 Evaluation Report, SRI International, November
2002, pp. 16-18.
34 One exception to the LRE requirement in the statute involves a child with a disability who
has been convicted as an adult and incarcerated in an adult prison. Based on a demonstrated
“bona fide security or compelling penological interest that cannot otherwise be
accommodated” the IEP team may modify this (and other) requirements of IDEA (20 U.S.C.
1414(d)((6)(B)).
35 Apparently the original statutory language tied eligibility to a student’s academic
performance: scholarship availability required that “the student’s academic progress in at
least two areas has not met expected performance levels for the previous year as determined
by the student’s IEP — or, absent specific performance levels identified in the IEP, the
student performed below grade level on state or local assessments and the parent believes
that the student is not progressing adequately towards his/her IEP goals ....” Quoted in “The
Little-Known Case of America’s Largest School Choice Program” by Daniel McGroarty in
Rethinking Special Education for a New Century, Thomas B. Fordham Foundation and
Progressive Policy Institute. Chester E. Finn, Andrew J. Rotherham, and Charles R.
Hokanson, Jr., eds., p. 303.

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school.36 Issues for a parental IDEA voucher program include whether eligibility will
be based on individual or school performance or on parental dissatisfaction with the
FAPE being provided. In addition, would children with disabilities previously placed
in private schools by their parents be eligible? Under the McKay Scholarship
program, such children are not eligible.
Would Sufficient Choice Be Provided? A related issue is the extent to
which private schools will choose to participate in an IDEA voucher program. The
McKay Scholarship experience suggests that participation rates can be quite high if
eligibility requirements are modest, and schools are permitted substantial flexibility.
Indeed this is one argument for vouchers and other choice programs, such as charter
schools; namely, that by reducing regulatory requirements, schools are freed to be
more creative and provide better education. However, the degree of freedom from
legal requirements may be inversely related to the degree to which IDEA guarantees
and protections follow the child and the IDEA funding to the private school. One can
surmise that the greater the degree to which federal statutes and regulations are
applicable to publicly funded children with disabilities served in private schools, the
more likely some or many private schools will choose not to participate.
Is There an Incentive to Over-identify Children as Having
Disabilities and Would the Provision of Vouchers Alleviate this
Problem? A recent study by the Manhattan Institute for Policy Research has argued
that the increase in the enrollment of children in special education programs is
impacted by financial incentives created by special education funding.37 This
conclusion is not universally accepted and others have argued that the increase in the
numbers of children enrolled in special education is due to the increased number of
children with disabilities.38 If this enrollment increase is seen as a significant issue,
a related issue of whether the provision of vouchers would lead to greater or lesser
36 Herrington and Weidner, p. 1. Students from 10 failing schools will be eligible for
Opportunity Scholarships in school year 2002-2003. (For further information, see
[http://www.opportunityschools.org/Info/OSP/default.asp].)
37 Jay P. Greene and Greg Foster, “Effects of Funding Incentives on Special Education
Enrollment,” Manhattan Institute for Policy Research (Dec. 2002)
[http://www.manhattan-institute.org/html/cr_32.htm]. This issue has been examined at the
federal level. Because of concerns that a formula based on the number of children with
disabilities could provide incentives for “over-identifying” such children, Congress, in the
1997 IDEA Amendments (P.L. 105-17), authorized a new funding formula for the grants-to-
states program, which became effective in FY2000. Prior to that year, grants-to-states funds
were distributed based on states’ shares of children with disabilities. The 1997
Amendments changed the formula so that all “new” money (i.e., the amount above the
FY1999 amount allocated to states) would be distributed based on states’ share of the
relevant overall population (85% of “new” money) and on states’ shares of children living
in poor families (15% of “new” money). For a more detailed discussion of the IDEA
funding formula see CRS Report RL31480, Individuals with Disabilities Education Act
(IDEA): State Grant Formulas, by Richard N. Apling.
38 Sheldon Berman, Perry Davis, Ann Koufman-Frederick, and David Urion, “The Rising
Cost of Special Education in Massachusetts: Causes and Effects,” in Rethinking Special
Education for a New Century, ed. Chester E. Finn, Jr., Andrew J. Rotherham, and Charles
R. Hokanson, Jr., Fordham Foundation and Progressive Policy Institute, May 2001.

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increases likely would arise. The Manhattan Institute study argued that a private
school scholarship program similar to the Florida McKay Scholarship Program
would “mitigate perverse incentives from state special education funding.”
In brief, current and proposed federal choice programs providing educational
options to a broad array of students and the Florida McKay Scholarship program can
inform a congressional deliberation on an IDEA voucher program. At the same time,
the special needs and unique rights of children with disabilities and their parents
suggest that additional issues are likely to be considered in any debate on such a
program.