Texas ESA Program Guide: Complete 2026 Funding & Eligibility Details

Texas Education Freedom Accounts: The Complete 2026 Parent Guide

Everything Texas families need to know about the largest school choice program in American history—before applications open.

Last updated: November 2025

Texas is about to fundamentally change how families can pay for education.

Starting with the 2026-27 school year, the Texas Education Freedom Accounts (TEFA) program will deposit approximately $10,800 per student into parent-controlled accounts. Students with disabilities could receive up to $30,000. The state has committed $1 billion to fund an estimated 80,000 to 100,000 students in year one alone.

This isn't a pilot program or a limited scholarship. It's the largest day-one school choice initiative ever launched in the United States.

But here's what most Texas parents don't realize: the application window is expected to be just six to eight weeks. Families who prepare now will have a significant advantage when applications open in early 2026.

This guide covers everything you need to know—verified directly from the Texas Comptroller's office, Texas Education Agency, and Senate Bill 2—so you can make informed decisions for your family.

What Are Texas Education Freedom Accounts?

Texas Education Freedom Accounts are state-funded savings accounts that give parents control over their children's education dollars. Rather than funding flowing directly to school districts, TEFA deposits money into individual accounts that families can use for approved educational expenses.

The program was created by Senate Bill 2, passed by the 89th Texas Legislature and signed into law by Governor Greg Abbott on May 3, 2025. The Texas Comptroller of Public Accounts oversees the program, with day-to-day administration handled by Odyssey, a company that already manages similar programs in Iowa, Georgia, Louisiana, Utah, and Wyoming.

Think of it this way: instead of the state spending roughly $12,700 per student at public schools, TEFA allows eligible families to receive about 85% of that amount—approximately $10,800—to direct toward the educational options that work best for their children.

What Makes TEFA Different from Vouchers?

Traditional school vouchers typically cover only private school tuition. TEFA is more flexible. The funds can be used for:

• Private school tuition
• Homeschool curriculum and materials (up to $2,000)
• Tutoring services
• Educational therapies
• Career and technical education programs
• Online learning programs
• Textbooks and instructional materials
• Educational technology
• Transportation to approved providers
• School meals and uniforms

This flexibility means families can customize their approach. A student could attend a microschool three days per week and use remaining funds for specialized tutoring. A homeschool family could access $2,000 for curriculum while directing additional funds toward co-op classes or online courses. A child with learning differences could combine a specialized school with therapeutic services.

How Much Funding Will Families Receive?

The Texas Education Agency will finalize exact funding amounts in January 2026. Based on current guidance from the Comptroller's office, here's what families can expect:

Standard Funding: Approximately $10,800

State law sets the transfer amount at 85% of the statewide average of state and local funding per student in Texas public schools. Current estimates place this at approximately $10,800 per child attending an approved private school.

Students with Disabilities: Up to $30,000

Students with documented disabilities who have an Individualized Education Program (IEP) on file can receive significantly more—up to $30,000 annually. This amount is based on what the school district would have received in state special education funding for that student.

This is a critical distinction: to qualify for the higher funding tier, families must have an IEP from a Texas public school district or open-enrollment charter school. A private diagnosis alone isn't sufficient for the increased funding amount.

Homeschool Families: Up to $2,000

Families who homeschool can receive up to $2,000 per year specifically for homeschool expenses. This cap applies to homeschool-specific costs, but homeschool families can combine this with other eligible expenses (like tutoring or online courses) to access more of their funding.

How Funds Are Distributed

TEFA funds are deposited into a digital wallet managed through the Odyssey platform. Deposits occur on July 1, October 1, and in April. If a family enrolls mid-year, the amount is prorated based on enrollment date.

Unused funds roll over year to year with no limit while the student remains in the program. The funds are not considered taxable income under current guidance.

Who Is Eligible for TEFA?

Eligibility requirements are straightforward, but not everyone who applies will receive funding. Here's what you need to know.

Basic Eligibility Requirements

To apply for TEFA, a student must be:

• A U.S. citizen or lawfully present in the United States
• Eligible to attend a Texas public school, open-enrollment charter school, or pre-K program
• The child of a Texas resident (parent, guardian, conservator, or other person with legal authority)

This includes children of active-duty military parents stationed in Texas.

The Critical Caveat: It's Not Guaranteed

Unlike some other state programs, TEFA approval isn't automatic for everyone who qualifies. The program has a fixed budget of $1 billion for the first biennium. If applications exceed available funding, a lottery determines who receives accounts.

This is why understanding priority tiers matters—it directly affects your odds of receiving funding.

Priority Tiers: Who Gets Funded First?

If more families apply than available funding can support, the Comptroller's office will use a lottery system with priority tiers. Your position in this hierarchy significantly impacts your chances of approval.

Priority Tier 1: Siblings of Current Participants

After the first round of selections, siblings of children already in the program receive priority. If one child in your family is accepted, all siblings who applied should also receive accounts.

Priority Tier 2: Students with Disabilities (≤500% Federal Poverty Level)

Children with disabilities from households at or below 500% of the Federal Poverty Level receive the highest priority among new applicants.

For 2025, 500% FPL for a family of four is approximately $160,750. Most Texas families with children who have documented disabilities would fall into this tier.

Priority Tier 3: Low-Income Families (≤200% Federal Poverty Level)

Children from households at or below 200% FPL receive the next level of priority. For a family of four, this threshold is approximately $64,300 in annual income.

Priority Tier 4: Middle-Income Families (200-500% Federal Poverty Level)

Children from households earning between 200% and 500% FPL form the next priority group.

Priority Tier 5: Everyone Else (≥500% Federal Poverty Level)

Families above 500% FPL are still eligible, but face two important limitations:

1. No more than 20% of total program funds can be spent on this category in any given year
2. Within this tier, students who were enrolled in a Texas public school or charter for at least 90% of the preceding school year are prioritized over students already in private schools

What This Means Strategically

If your family falls into Priority Tier 5, approval isn't guaranteed. The 20% cap means that even if you meet all eligibility requirements, funding may not be available. Families in lower priority tiers should prepare thoroughly but also have contingency plans.

Conversely, families with children who have disabilities and meet the income requirements have excellent odds of approval given their Tier 2 status.

The Application Timeline: Critical Dates

The Comptroller's office has indicated applications will open in "early 2026" with funds available for the 2026-27 school year. Based on reporting from KPRC 2, which obtained rollout documents through a public information request, here's the expected timeline:

Fall 2025: Private School Registration Opens

Private schools can apply to become approved TEFA providers. Schools must meet specific requirements (detailed below) to accept TEFA funds.

January 2026: TEA Finalizes Funding Amounts

The Texas Education Agency will confirm exact per-student funding amounts for the 2026-27 school year.

Early 2026: Family Applications Open

The application portal is expected to launch in early 2026. Some reports suggest a window from approximately February 4 through mid-March, though exact dates haven't been officially confirmed by the Comptroller's office.

Spring 2026: Approval Decisions

Families should receive notification of their application status by approximately May 1, 2026.

May 15, 2026: Rules Finalized

The Comptroller must finalize all program rules by this date.

July 1, 2026: Funds Deposited

First deposits hit approved accounts. The Odyssey payment platform launches.

The Timing Challenge

Here's a practical concern: many private schools have admissions deadlines in January or February—before families will know whether their TEFA applications are approved. You may need to apply for school admission, potentially pay deposits, and commit to enrollment before knowing if state funding will come through.

Discuss this timing issue with prospective schools. Ask about:

• Conditional enrollment pending TEFA approval
• Refund policies if TEFA isn't approved
• Whether they're registering as TEFA providers
• Their experience with ESA programs from other states

What Expenses Does TEFA Cover?

The program covers a broad range of educational expenses. According to the Texas Private Schools Association and official Comptroller guidance, eligible expenses include:

Tuition and School Fees

• Private school tuition at approved providers
• School breakfasts and lunches
• Uniforms
• Registration and enrollment fees

Academic Support

• Tutoring services from approved providers
• Online education programs
• Textbooks and instructional materials
• Curriculum packages (for homeschool, up to $2,000 cap)

Technology

• Computer hardware required by providers
• Educational software
• Technology devices prescribed by a physician (capped at 10% of annual account balance)

Specialized Services

• Educational therapies for students with disabilities
• Speech therapy, occupational therapy, and related services
• Therapies not covered by government benefits or private insurance

Career and Technical Education

• Approved CTE programs
• Vocational training

Transportation

• Transportation to and from approved education providers

What's NOT Covered

Funds cannot be used for:

• Personal or family expenses unrelated to education
• Cash withdrawals
• Payments to family members (within third degree of consanguinity)
• Items that are then sold within 12 months
• Non-approved vendors or providers

Accounts will be regularly audited for compliance. Misuse of funds can result in penalties including repayment requirements and removal from the program.

Special Needs Families: Maximizing Your TEFA Funding

If your child has a disability, TEFA could be transformational—but accessing the full $30,000 requires proper documentation.

The IEP Requirement

To qualify for funding above the base amount (approximately $10,800), your child must have an Individualized Education Program (IEP) from a Texas public school district or open-enrollment charter school.

This is non-negotiable for the higher funding tier. A private diagnosis, doctor's letter, or out-of-state documentation isn't sufficient.

What If Your Child Doesn't Have an IEP?

State law (Senate Bill 2) requires public school districts to provide special education evaluations for children seeking TEFA funding—even if the child has never attended public school.

According to the Texas Education Agency's guidance:

1. You can request an evaluation from your local school district
2. The district must evaluate the child if there's reason to suspect a disability
3. If eligible, the district will develop an "EFA IEP" specifically for TEFA purposes
4. Districts receive $1,000 per initial evaluation completed (under House Bill 2), creating an incentive to process requests

The EFA IEP: What It Includes

The TEFA-specific IEP is streamlined compared to a standard IEP. It includes:

• Schedule and delivery of services needed
• Accommodations and modifications
• Supplementary aids and services
• Instructional arrangement code for funding calculation

It does NOT require:

• Present levels of academic achievement
• Annual IEP goals
• Statewide assessment statements

Start the Process Now

Evaluations take time. If your child may have a disability but doesn't currently have an IEP, contact your local school district now to request an evaluation. The difference between $10,800 and $30,000 in annual funding makes this process well worth pursuing.

Private School Requirements

Not every private school will participate in TEFA. Schools must meet specific requirements and choose to opt in.

Schools Must Be:

1. Located in Texas - Out-of-state schools are not eligible (though out-of-state online programs may apply for approval)
2. Accredited - Schools must be accredited by an organization recognized by:

• Texas Private School Accreditation Commission (TEPSAC), or
• Texas Education Agency

1. Established - Schools must have been in continuous operation for at least two school years before their application
2. Testing-Compliant - Schools must annually administer a nationally norm-referenced assessment to TEFA students in grades 3-12

Schools Must Also:

• Conduct national criminal background checks (including fingerprinting) for all staff
• Adhere to applicable nondiscrimination laws
• Not refund or rebate any portion of ESA payments to parents

Participation Is Optional

Private schools choose whether to accept TEFA funds. Some schools may not want to meet the requirements. Others may offer scholarships to cover any gap between TEFA funding and their tuition.

Before committing to any school, verify:

1. Are they registered (or registering) as a TEFA provider?
2. What is their tuition relative to TEFA funding?
3. How will they handle the gap if tuition exceeds TEFA amounts?
4. Do they have experience with ESA programs from other states?

The Application Process: What to Expect

The application will be managed through an online portal designed by Odyssey and accessible via the Texas Comptroller's website.

Key Application Facts

• One application per child - You must submit a separate application for each child
• Not first-come, first-served - The program uses a lottery system, though submitting early is recommended to avoid technical issues
• Siblings approved together - Once one child is awarded a TEFA, siblings who applied will also receive accounts
• Annual confirmation only - After initial approval, families don't need to reapply each year; just confirm intent to continue

Required Documentation (Anticipated)

While the exact requirements will be confirmed when the portal launches, expect to provide:

• Proof of Texas residency
• Student identification/birth certificate
• Income documentation (for priority tier placement)
• IEP documentation (if applicable for disability funding)
• Enrollment verification from an approved school

Parent Certifications

As part of the application, parents must certify under penalty of perjury that they will:

• Only request payment for approved education-related expenses
• Not attempt to withdraw cash or seek reimbursement
• Not sell items purchased with program money within 12 months
• Notify Odyssey within 30 days if the child enrolls in public school, graduates, or becomes ineligible
• For students in grades 3-12 at private schools, authorize the school to provide assessment results to the program

Once You're Approved: How the System Works

After approval, you'll access your TEFA account through Odyssey's mobile-first platform.

Your Digital Wallet

Each approved student gets a secure digital wallet with:

• Real-time balance tracking
• Transaction details
• Access to an e-commerce marketplace
• Ability to manage multiple students from one parent account

Making Payments

Depending on the expense type, you'll either:

1. Direct payment - Pay approved providers directly through the platform
2. E-commerce - Purchase approved materials through the Odyssey marketplace
3. Reimbursement - Some expenses may require submitting receipts for reimbursement

Ongoing Requirements

To remain in good standing:

• Use funds only for approved expenses
• Respond to any audit requests
• File annual intent to continue
• Report any changes in eligibility status within 30 days

Action Plan: What to Do Right Now

The families best positioned when applications open will be those who prepare now. Here's your timeline:

This Week

• [ ] Sign up for official updates at comptroller.texas.gov/programs/education/esa
• [ ] Calculate your family's Federal Poverty Level tier to understand your priority status
• [ ] If your child may have a disability but no IEP, contact your local school district to begin the evaluation process

This Month

• [ ] Research private schools, microschools, and learning options in your area
• [ ] Contact prospective schools to ask:
• Are you registering as a TEFA provider?
• What is your tuition for 2026-27?
• What is your admissions timeline?
• How do you handle the TEFA timing gap?
• [ ] Tour 2-3 schools that align with your child's needs
• [ ] Gather residency and identification documents

December 2025 - January 2026

• [ ] Confirm your target school is registered as a TEFA provider
• [ ] Complete any required IEP evaluations
• [ ] Organize all application documentation
• [ ] Apply to schools (even before knowing TEFA status, if required by their deadlines)

When Applications Open (Early 2026)

• [ ] Submit your application as soon as the portal opens
• [ ] Apply for ALL eligible children
• [ ] Keep copies of all submitted documentation

After Approval (May-June 2026)

• [ ] Set up your Odyssey account
• [ ] Confirm enrollment with your chosen school
• [ ] Understand the payment process before July 1

Frequently Asked Questions

Is my child eligible if they're already in private school?

Yes. Children currently in private school can apply for TEFA. However, in Priority Tier 5 (families above 500% FPL), students transferring from public school are prioritized over students already in private school.

Can I use TEFA for homeschooling only?

Yes, but homeschool-specific expenses are capped at $2,000 annually. You can combine homeschooling with other approved expenses (tutoring, online courses, part-time enrollment) to access more funding.

What if my child attends school part-time?

TEFA's flexibility accommodates hybrid models. A student could attend a microschool three days per week and homeschool two days, using TEFA funds for both components.

Can I use TEFA for out-of-state online programs?

Potentially, if the provider applies for approval and is accepted into the program. The Comptroller's FAQ confirms that online programs can apply to participate.

What happens if I'm not approved in the lottery?

Families who apply but aren't selected will be placed on a waitlist. You'll need to apply again the following year if a spot doesn't open.

Do I need to reapply every year?

No. Once approved, families remain in the program by confirming their intent to continue annually. You don't need to complete a new full application.

What happens to unused funds?

Unused funds roll over year to year with no limit while your child remains eligible and participates in the program.

Are TEFA funds taxable?

No, TEFA funds are not considered taxable income under current guidance.

Can I combine TEFA with other scholarships?

This depends on the specific scholarship and school policies. Many private schools offer additional financial aid that can be combined with TEFA to cover any tuition gap.

What if my child returns to public school?

You must notify Odyssey within 30 days if your child enrolls in public school. TEFA funds cannot be used while enrolled full-time in public school.

Resources and Official Links

Official Sources

• Texas Comptroller TEFA Portal: comptroller.texas.gov/programs/education/esa
• Texas Comptroller FAQ: comptroller.texas.gov/programs/education/esa/faq.php
• Texas Education Agency SB 2 Guidance: tea.texas.gov (search "Senate Bill 2 Education Savings Accounts")

Sign Up for Updates

The Comptroller's office maintains several email lists:

• Parent/student updates
• Private school updates
• Education service provider updates
• Public school/charter school updates

Sign up at the TEFA portal to receive notifications when applications open and as implementation details are finalized.

Additional Resources

• Texas Private Schools Association: texasprivateschools.org/families/school-choice
• Biggie Microschool Directory: biggieschools.com (filter for Texas TEFA-accepting schools)

The Bottom Line

Texas Education Freedom Accounts represent a fundamental shift in how families can access and pay for education. With approximately $10,800 per student (up to $30,000 for students with disabilities) and $1 billion in first-year funding, this program creates options that didn't exist before.

But opportunity favors the prepared.

The application window will be brief. Priority tiers matter. IEP evaluations take time. Private schools have their own admissions deadlines. The families who benefit most from TEFA will be those who start preparing today.

Whether you're exploring microschools, considering a specialized program for your child's learning differences, or simply want more control over your child's educational path, now is the time to research, plan, and prepare.

Applications are expected to open in early 2026. That's closer than it sounds.

This guide is provided for informational purposes and reflects information available as of November 2025. Program details may change as implementation continues. Always verify current information through official Texas Comptroller sources at comptroller.texas.gov.

Related Articles:

• Part 1: Understanding ESAs & Eligibility
• Part 2: ESA Application & Payment Process
• What Is a Microschool? Complete Parent Guide

Ready to find schools that accept TEFA? Search Texas microschools and private schools on Biggie.