Education planning, by which we financial-planning professionals and our clients mean primarily planning to fund postsecondary education for children or grandchildren, is its own module within comprehensive financial planning. That is because, for many students and their families, postsecondary education will require a significant outlay. The same is true for students with intellectual and developmental disabilities who want to attend an inclusive post-secondary education program or IPSE. This blog will examine some of the ways to pay for it.
First of all, it is very important to know if the IPSE you are planning to attend is a Comprehensive Transition and Postsecondary or “CTP” program. All CTPs are IPSEs, but not all IPSEs are CTPs. “CTP” is a US Department of Education designation. It requires the IPSE to have certain specific features. From the Code of Federal Regulation (CFR.gov):
The following definitions apply to this subpart:
(a) Comprehensive transition and postsecondary program means a degree, certificate, nondegree, or noncertificate program that—
(1) Is offered by a participating institution;
(2) Is delivered to students physically attending the institution;
(3) Is designed to support students with intellectual disabilities who are seeking to continue academic, career and technical, and independent-living instruction at an institution of higher education in order to prepare for gainful employment;
(4) Includes an advising and curriculum structure;
(5) Requires students with intellectual disabilities to have at least one-half of their participation in the program, as determined by the institution, that focuses on academic components through one or more of the following activities:
(i) Taking credit-bearing courses with students without disabilities.
(ii) Auditing or otherwise participating in courses with students without disabilities for which the student does not receive regular academic credit.
(iii) Taking non-credit-bearing, nondegree courses with students without disabilities.
(iv) Participating in internships or work-based training in settings with individuals without disabilities; and—
(6) Provides students with intellectual disabilities opportunities to participate in coursework and other activities with students without disabilities.
CTP designation is of enormous importance, because students with intellectual disabilities, who attend a CTP program, are eligible for Federal PELL grants (assuming they are otherwise eligible according to their families’ financial circumstances) and may be eligible for related state grants. Students may also be eligible for Federal Work Study opportunities. Note that students attending a CTP are NOT eligible for subsidized student loans. It is also important to note that the student must have evidence of an intellectual disability.
State-Level Vocational Rehabilitation agencies may or may not fund students with disabilities to attend an IPSE program whether or not it is a CTP program. While all state VR agencies will fund students with disabilities to obtain a degree (Associate’s, Bachelor’s, or higher) or a technical certification, specific to a particular industry or trade, it varies greatly whether they will fund students to attend non-degree IPSE programs. Some VR agencies will fund IPSE programs that offer industry-specific, non-degree credentials, such as a culinary or horticultural certificate. Some may be willing to fund the work-integrated learning aspect of the program, such as internship-related classes and job coaching. Thus far, in my home state of Illinois, the state VR agency has refused to fund most students with disabilities attending an IPSE program, although a few individual students have managed to obtain funding on case-specific bases.
A few states permit students with disabilities to use Medicaid Waiver dollars to fund at least part of an IPSE program; however, this is significantly less common that VR funding. Medicaid Waivers are structures that allow people with disabilities to use Medicaid money to fund supports and services in the community, including daily living supports and employment supports, both of which may be part of an IPSE. Students with disabilities, particularly those over the age of 18, may also be eligible for Supplemental Security Income (a Federal means-tested program administered by the Social Security Administration), Social Security Disability Insurance from their own work records, or so-called Childhood Disability Benefits (aka Disabled Adult Child Benefits) on their parents’ work record. These income streams can be used to fund a student’s IPSE experience.
Most students with disabilities are eligible to open a 529A (ABLE) account. Funds may be contributed to an ABLE by either the student her/himself or by any other person up to an amount of $18,000/year (2024), with additional contributions possible for working students. Funds may be invested and will grow tax-deferred. Both basis and growth are distributed tax-free for “Qualified Disability Expenses”, of which one is education and related expenses, such as housing, books, materials, and fees.
Of course, families can always save for their student’s postsecondary education in a traditional 529 College Savings Plan. Students with disabilities may be eligible for scholarships offered by the college or university offering the IPSE. Some students with disabilities may be eligible for private-sector scholarships, as well. Obtaining these requires research and timely application, as they may be limited and highly competitive. And, of course, like any other student, a student with a disability might be able to hold a part-time job to contribute to her/his own education funding.
A well-designed IPSE program can offer students with disabilities significant opportunities to build their employment and independent-living skills. The cost of an IPSE program can range from a few thousand dollars a year for a commuter, community-college-based program to tens of thousands of dollars per year for programs that support students to live on campus full-time. IPSE programs also range in length from several quarters or semesters to a full four years. More and more IPSE programs of more and more varieties are coming online at more and more colleges and universities. Not surprisingly, then, more and more students with disabilities and their families are considering attending an IPSE as a step to bridge from high school to adult life. As with any large purchase, it is works best to plan in advance how to cover the cost of an IPSE.
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