State Fiscal Year (SFY) 2026 Special Education Tuition Fund Applications

To: Special Education Directors, Business Managers, and SEDRA Contacts
From: Division of School Finance, Special Education Funding and Data

This memorandum outlines the department’s procedure for submitting Special Education Tuition Fund Applications for state fiscal year (SFY) 2026.

Minnesota Statutes establish the requirements for a local educational agency (LEA) to receive funds for special student placements. It is the LEA’s responsibility to report the students’ enrollment periods listed on the applications correctly in the Minnesota Automated Reporting Standards System (MARSS).

The state aid category (SAC) is used to determine which LEA generates state aid for students and which students are eligible to generate aid. A change in the SAC requires closing the current enrollment status record and creating a new enrollment record. If the status start or status end dates fall outside the normal school year, MARSS records must be adjusted to fit the reporting school’s calendar. Summer membership should not be included in MARSS.

If a regular year membership (RSY) is not entered in MARSS, no aid will be generated and a special education tuition fund application cannot be processed. If RSY application start and end dates do not match the membership start and status end dates, the application cannot be processed. Please note that if the student is not in MARSS, the student’s information will not show up on the end-of-the-year MARSS reports used to verify the accuracy of an LEA’s data.

Special Expenditure Application Out-of-State Tuition for Minnesota Residents 2025-26

Court action places these students in a care and treatment facility in a state that does not have a reciprocity agreement with Minnesota. The resident district reports students in MARSS using SAC 14.

Local educational agencies (LEAs) must work with contracting public, private or voluntary agencies to have invoices split out between eligible special education costs and those that are general education.

LEAs will only enter the special education share in the Special Education Data Reporting Application (SEDRA). LEAs will use expenditure information to identify and resolve contracted student placements discrepancies on their Special Education/Uniform Financial Accounting and Reporting Standards (UFARS) Comparison Report prior to system close.

Entering the expenditure in SEDRA ensures LEAs have entered RSY records in MARSS for RSY application period. LEAs must also verify Extended School Year (ESY)/Summer Session placement residency is correct.

Special Expenditure Application Court Placed Non-Minnesota Residents with Individualized Education Programs (IEPs) 2025-26

Court action or Minnesota Human Services Agency from outside Minnesota places students who are not a Minnesota resident in a care and treatment facility in Minnesota. Report the students in MARSS using SAC 15.

Special Expenditure Application Special Pupils with Individualized Education Programs (IEPs) 2025-26

Court action or Minnesota Human Services Agency places students with IEPs in a state institution, a licensed residential facility, or foster facility for care and treatment. The Minnesota serving district reports the students in MARSS using SAC 27 or 28. For students who have been placed out-of-state, the resident district reports the student using SAC 14.

Special Expenditure Application Special Pupils without Individualized Education Programs (IEPs) 2025-26

Court action or Minnesota human service agency places students without IEPs in a state institution, a licensed residential facility, or foster facility for care and treatment. The Minnesota service district reports the students in MARSS using SAC 27 or 28. For students who have been placed out-of-state, the resident district reports the students using SAC 14.

Special Education Tuition Fund Applications

If the application is not complete, or the LEA does not attach required documentation, MDE cannot process or approve the application.

The Special Education Tuition Fund Applications are posted to MDE website on the Special Education > State Funding page.

For more information, please see Section 20 – Special Education Tuition Fund Applications of the Special Education Funding Guide (From the MDE homepage (https://education.mn.gov) > Districts, Schools and Educators > Business and Finance > School Finance > Special Education > State Funding/Code Sheets).

Please see Section 20 – Special Education Tuition Fund Applications for eligibility requirements.

Special Expenditure Applications for Student Placements (Special Pupils) Webinar

Attend this webinar to learn more about how to report Special Pupils for Care and Treatment in MARSS. Learn which students may be eligible for additional aid. See how enrollment data is used to record expenditures in SEDRA. The session will cover the specific student characteristics and the process of applying for state aid. You will also learn what happens after an application is reviewed. Presentation material and information on joining the webinar will be sent to registered participants the day before.

Register: Join the September 23, 2026, Special Expenditure Applications for Student Placements (Special Pupils) webinar

Registration Deadline: September 22, 2026

If you have any questions, please contact the Special Education Funding and Data Team.