NCPA - National Center for Policy Analysis


September 21, 2004

Over the past 10 years, Michigan has enrolled more than 22,000 additional students in special-education programs who should not have been classified that way, according to a study from the Manhattan Institute. Those additional students cost local, state and federal governments nearly $131 million extra per year.

Jay P. Greene and Greg Forster argue that the "bounty system" Michigan has in place, which pays school districts for every additional student enrolled in special education, is the reason for the additional cost of the program. Michigan has had such a system in place since 1991.

In states where schools had a financial incentive to identify more students as disabled and place them in special education, the percentage of all students enrolled in special education grew significantly more rapidly over the past decade, say the authors:

  • Nationwide, the percentage of students enrolled in special education grew from 10.6 percent to 12.3 percent between 1991 and 2000.
  • In Michigan alone, the number of children served by the Individuals with Disabilities Education Act (IDEA), the federal special-education law, jumped 27 percent between 1991 and 2000.
  • Currently, more than 12 percent of Michigan youths below age 21 are enrolled in IDEA.

Part of the reason for the special-education population growth in Michigan and nationwide is the placement of children classified as learning disabled on the rolls, say the authors.

  • In 1976-77, there were fewer than 800,000 IDEA children -- those categorized with specific learning disabilities -- in the entire country.
  • That number nearly doubled by 1980-81, making it the largest single IDEA category that year.

Over the ensuing 20 years, an increasing number of children have been diagnosed with learning disabilities, until today more than 45 percent of all IDEA students have such a designation.

Source: "Thousands Unnecessarily Assigned to Special-ed." Michigan Education Report, Summer, 2004; and Jay P. Greene and Greg Forster, "Effects of Funding Incentives on Special Education Enrollment," Manhattan Institute, Civic Report No. 32, December 2, 2002.

Study Manhattan Institute


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