The National Deaf Children's Society (NDCS) analysis of government data, found that the average GCSE grade for deaf children is 3.9, which used to be known as a grade D.
For a child without special educational needs or a disability, the average grade is 5 - a strong C under the old system.
Councils are facing a colossal shortfall in SEND funding, and the Local Government Association (LGA) has repeatedly issued warnings on the impact.
The LGA has estimated the shortfall could amount to £1.6bn by 2021.
NDCS chief executive Susan Daniels warned it would take more than two decades to close the attainment gap, adding: "The government is starving local councils of funding, meaning their support is cut back and their specialist teachers are being laid off.
"Deafness is not a learning disability, but deaf children are still falling a whole grade behind their classmates.
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