I remember looking into it, and at least in our state, speech services are treated differently. So a "speech kid" is not really looked at like other special education students, probably because most of them are ultimately exited by the time they are early to mid elementary. Maybe aeh can weigh in...

It doesn't sound like they are meeting his needs, regardless of how speech IEPs work. If he fits into a different category then they are required to put him there and give the necessary services.