North Carolina caps SPED funding at 13% of students; most districts over that number

June 19, 2026, How experts say NC can fix its special education problems | Charlotte Observer

North Carolina has fallen short in providing adequate services to its disabled students, the federal government ruled last fall. Experts say there are solutions.

The Charlotte Observer spoke with four parents in Union County Public Schools who complained the district presented barriers to their children receiving adequate support. But the Observer’s reporting found it’s not a problem unique to Union County: in 2025, the federal government cited the state as “needing assistance” in meeting federal special education standards. It’s one of 32 states and territories to be cited.

Experts told the Observer funding and staffing shortages present major challenges to providing exceptional children’s services, North Carolina’s name for special education.

They said reforms to the state’s funding model — like giving more funding to schools with students who have more complex needs — and making the appeals process easier for parents could offer a better way forward.

Per-pupil funding

Peggy Nicholson is a supervising attorney at Duke University’s Children’s Law Clinic, where law students and attorneys often represent families in cases involving access to EC services.

“One of the biggest challenges that affects pretty much every district that we work within is lack of resources to meet the needs of the children and families who are enrolled in the district,” Nicholson said. “We have historically underfunded our public schools, where most students with disabilities are served.” . . .

A possible solution, Nicholson said, is reforming the funding model North Carolina uses for students with disabilities. It currently centers on just the number of students served, not the specific needs of those students.

“Right now, every student gets the same kind of per-pupil expenditure, and it’s not taking into account students who might have really intense, complex educational needs that require a lot more resources,” Nicholson said.

North Carolina allocates $5,309 in supplemental funding for each student with an individualized education plan, or IEP, which is required for all students with special needs. That is regardless of the type of disability or needs of each individual student, which vary greatly.

Meanwhile, North Carolina also caps supplemental EC funding at 13% of a district’s student population. But only 21 of North Carolina’s 115 public school districts fall below that threshold.

So, even if more than 13% of a district’s students have IEPs – as is the case in 94 districts in the state – it will only receive supplemental funding for 13%.

Nicholson said reforms to how the state doles out special education funding is one possible solution. . . .

Teacher shortages are especially pronounced for EC roles in North Carolina: a state annual report found that one in five teaching vacancies in North Carolina during the 2023-24 school year were for EC staff. . . .

A school team reviews each child’s case and determines services they need to get a “free, appropriate public education” tailored to their needs, as they are entitled to by federal law.

However, when parents want to appeal a school’s decision, their main avenue in North Carolina is the court system, Nicholson said. . . .