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U.S. Department of Education: Promoting Educational Excellence for all Americans

Costs and Benefits of Non-statutory Final Regulatory Provisions

The following is an analysis of the costs and benefits of the non-statutory final regulatory provisions that includes consideration of the special effects these changes may have on small entities.

The final regulations primarily affect SEAs and LEAs, which are responsible for carrying out the requirements of Part B of the Act as a condition of receiving Federal financial assistance under the Act. Some of the changes also affect children attending private schools and consequently indirectly affect private schools.

For purposes of this analysis as it relates to small entities, the Secretary has focused on LEAs because these regulations most directly affect local public agencies. The analysis uses a definition of small school district developed by the NCES for purposes of its recent publication, Characteristics of Small and Rural School Districts. In that publication, NCES defines a small school district as "one having fewer students in membership than the sum of (a) 25 students per grade in the elementary grades it offers (usually K-8) and (b) 100 students per grade in the secondary grades it offers (usually 9-12)". Using this definition, approximately 38 percent of the Nation's public agencies in the 2002-2003 Common Core of Data were considered small and served three percent of the Nation's students. Approximately 17 percent of children in small districts had IEPs.

Both small and large districts will be affected economically by the final regulations, but no data are available to analyze the effect on small districts separately. For this reason, this analysis assumes that the effect of the final regulations on small entities will be roughly proportional to the number of children with disabilities served by those districts.

For school year 2006-2007, we project that approximately 48.6 million children will be enrolled in public elementary and secondary schools. Using the NCES definition and assuming that all districts grew at the same rate between school years 2002-2003 and 2005-2006, we estimate that in the 2006-2007 school year, approximately 1.46 million children will be enrolled in small districts. Based on the percentage of students in small districts with IEPs in 2002-2003, we estimate that in the 2006-2007 school year, these districts will serve approximately 248,000 children with disabilities of the 6.947 million children with disabilities served nationwide.

There are many provisions in the final regulations that will result in economic impacts, both positive and negative. The following analysis estimates the impact of the final regulations that were not required by the Act: