Students with disabilities placed in private schools at parent expense can receive some publicly funded services under IDEA. The Code of Federal Regulations, for example, states that:129

If a child with a disability has FAPE available and the parents choose to place the child in a private school or facility, the public agency is not required to pay for the child’s education at the private school or facility. However, the public agency shall make services available to the child. . . . Each LEA shall provide special education and related services designed to meet the needs of private-school children with disabilities residing in the jurisdiction of the agency.

The Education Department General Administrative Regulations prescribe that a public agency "shall provide students enrolled in private schools with a genuine opportunity for equitable participation . . . and that such an opportunity must be comparable in quality, scope, and opportunity for participation to the program benefits that the (agency) provides for students enrolled in public schools."130 In general, school districts have interpreted these regulations narrowly, providing minimal support to private-school students.

Three federal court decisions in 1995, however, greatly expanded public services to students with disabilities. In K. R. v. Anderson Community Sch. Corp.(Indiana), the district court ruled that the public schools must provide a full-time aide to a seven-year-old student with severe disabilities. Following that 1995 ruling, Russman v. Board of Educ. of the Enlarged City Sch. Dist. of Watervliet (New York) and Cefalu v. East Baton Rouge Parish School Board (Louisiana) resulted in similar decisions.

All three cases were appealed. The K. R. decision was overturned by the 7th Circuit Court of Appeals in April 1996. In July 1996, the Russman decision was affirmed by the 2nd Circuit Courts of Appeal. As of July 1996, a decision was pending on the Cefalu case.

These cases may be ultimately decided in the U. S. Supreme Court. If the Supreme Court rules in favor of the parents, there could be a significant national expansion of IDEA entitlements to private-school students (including parochial-school students) whose parents place them in private schools.

This could result in one of two outcomes. The total cost of special-education could increase once IDEA services are extended to students in private schools who previously did not receive public funding for such services. Conversely, the total cost of special education could decrease as public-school students shift to the private sector where they continue to receive publicly funded services directly related to their disability, but tuition is privately paid. Under this scenario, the cost of educating a student with a disability would be shared between parents or guardians and public agencies.

Beyond the issue of IDEA entitlements, the cases described above also invoke constitutional issues since they involve parochial schools. In 1993, the U. S. Supreme Court in Zobrest v. Catalina Foothills School District ruled that the First Amendment does not prohibit a school district from paying the cost of a sign-language interpreter for a deaf student in a parochial high school.

By contrast, the 4th Circuit in Goodall v. Stafford County Sch. Bd. ruled against a student’s right to an interpreter. The 1995 decision found that the school board’s refusal to provide an interpreter did not violate the student’s free exercise of religion. The court also reaffirmed its previous ruling that IDEA did not guarantee services to individual students in private schools. According to legal observers, the contradictions involved in these rulings will likely be resolved at some point by the U. S. Supreme Court.