Texas Education Freedom Accounts: What Parents Need to Know About TEFA

What TEFA Actually Is

The Texas Education Freedom Accounts program is a state-funded Education Savings Account system created by Senate Bill 2, signed into law during the 89th Texas Legislature in 2025. The Texas Comptroller of Public Accounts administers the program, with Odyssey serving as the certified educational assistance organization handling day-to-day operations — applications, the spending platform, and vendor management.

The state committed $1 billion for the 2026–2027 school year, making TEFA the largest single-year school choice launch in the country. During the inaugural application window (February 4 through March 31, 2026; the original March 17 deadline was extended), over 274,000 students applied. The Comptroller awarded more than 100,000 initial accounts through a priority lottery system.

Three Award Tiers

TEFA funding depends on where and how your child learns:

• Accredited private school students receive up to $10,474 per year — 85% of the statewide average per-pupil funding. This is disbursed in three tranches: 25% on July 1, 25% on October 1, and 50% on February 1.
• Private school students with an active IEP can receive up to $30,000 annually, reflecting what their home district would have generated in special education funding.
• Homeschool students receive a flat $2,000 per student, disbursed as a single lump sum on July 1. This cap applies regardless of disability status — a homeschooled child with an IEP still receives $2,000, not $30,000.

That last point surprises many families. The $30,000 special education tier requires enrollment in an accredited private school, not home instruction.

How the Money Works

TEFA operates through a direct-payment digital wallet on the Odyssey platform. Parents don't spend out of pocket and get reimbursed — the final administrative rules explicitly prohibit direct reimbursements. Instead, you browse approved vendors in the Odyssey marketplace and the state pays them directly.

Approved expenses include tuition and fees at accredited private schools, curriculum and textbooks, tutoring from approved providers subject to the rule against payments to a person related to the participant within the third degree by consanguinity or affinity, educational therapies (speech, OT, ABA) when not covered by government benefits or the child's private insurance, standardized testing fees, AP and SAT/ACT exam fees, and technology hardware and software required by an education service provider or vendor or prescribed by a physician, capped at 10% of your annual award. For homeschoolers, that 10% tech cap means $200 total.

The state can't convert TEFA funds to cash, and you can't sell or trade items bought with the money.

Who Qualifies

Four requirements apply to every applicant:

1. The parent or guardian must be a Texas resident
2. The child must be a U.S. citizen, national, or lawfully present non-citizen
3. The child must be eligible to attend a Texas public school (or Pre-K under specific criteria)
4. The child cannot be simultaneously enrolled in a public school or charter school

Pre-K applicants (ages 3–5) need to meet at least one of eight additional criteria — including military family status, eligibility for free/reduced lunch, or foster care involvement.

The Priority Lottery

When applications exceed available funding (they did in the inaugural year), a tiered lottery determines who gets accounts first:

• Tier 1: Students with disabilities, household income at or below 500% of the Federal Poverty Level
• Tier 2: Low-income students, household income at or below 200% FPL
• Tier 3: Middle-income students, income above 200% and at or below 500% FPL
• Tier 4: Upper-income students, income above 500% FPL — capped at 20% of total program funds

In Year 2 and beyond, siblings of participating children receive first priority; eligible siblings who apply during the same period as a child accepted into the program are also accepted. New applicants receive the next priority, followed by former participants who returned to public or charter school.

What Homeschool Families Should Know

Accepting TEFA doesn't change your legal homeschool status under Leeper v. Arlington ISD. You remain classified as a private home school. SB 2 companion legislation HB 2674 explicitly prohibits state agencies from regulating non-participating homeschools. TEFA participants must follow the program's spending and account rules, but homeschool participants do not have an annual TEFA testing requirement.

The assessment requirement applies to participating private schools for students in grades 3–12; TEFA does not add an annual testing requirement for homeschool participants. Standard Leeper homeschooling also has no state testing requirement.

Getting Started

The official portal at educationfreedom.texas.gov carries application-cycle information. For the inaugural cycle, applicants needed Texas ID and residency documentation, a 2024 or 2025 IRS Form 1040 or the Comptroller's Income Affidavit for AGI verification, and — for Tier 1 priority — approved disability documentation. The increased special education award required a current IEP on file with TEA.

If you're considering applying but aren't sure how the process, spending rules, or legal implications work for your family's situation, the Texas Education Freedom Accounts (TEFA) Parent Guide walks through every step — from document preparation through renewal and exit.

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