Texas Education Freedom Accounts (TEFA): How Texas’s ESA Works for 2026-27

Quick answer: Texas Education Freedom Accounts (TEFA) is the state’s education savings account program, created by Senate Bill 2 in 2025 with $1 billion in funding and run by the Texas Comptroller of Public Accounts. For 2026-27, awarded students get $10,474 for an accredited participating private school, up to $30,000 for a private school student with a disability and an IEP on file, or $2,000 for homeschool and other nonpublic settings. The first application window ran February 4 to March 31, 2026, and families can join an interest list for 2027-28.

Texas launched one of the largest new school choice programs in the country for the 2026-27 school year. The Comptroller’s office says it received more than 274,000 applications in the first cycle and has made over 100,000 awards. Because funding was limited, a lottery with priority tiers decided who received accounts, and many families remain on a waitlist.

This guide explains how TEFA works for parents: who can take part, how much money each type of student receives, how the lottery worked, what the funds can pay for, when money arrives, and what the program says about the 2027-28 year. It is part of our series on state education funding programs for parents, which compares ESAs, vouchers and tax-credit scholarships across the country.

Last verified October 2026 against the official program site, educationfreedom.texas.gov, and the program’s parent application guide and news updates. Program rules, amounts and dates can change by law or rule, so confirm details with the Texas Comptroller before making decisions. This article is general information, not legal, tax or financial advice, and it does not take a position on school choice policy.

What TEFA Is and Who Runs It

TEFA is an education savings account (ESA). Instead of sending a fixed voucher to a school, the state deposits money into an account that parents use for approved education expenses. That structure lets families who choose a private school, homeschooling or another nonpublic setting pay for tuition, materials, tutoring, therapies and other approved costs. Our explainer on the difference between ESAs, vouchers and tax-credit scholarships sets out how this model compares with others.

The official TEFA site states that the Texas Legislature passed Senate Bill 2 in 2025 and provided $1 billion to create the program. The Texas Comptroller of Public Accounts oversees it, and Odyssey was selected as the certified educational assistance organization (CEAO) that helps administer accounts and the online marketplace under the Comptroller’s oversight. All approved purchases and tuition payments go through the Odyssey platform.

Oversight

The program site explains that the Comptroller must contract with a private entity to audit accounts and program eligibility at least once a year. The State Auditor also performs periodic audits to check eligibility and confirm that money is spent on approved expenses.

Who Is Eligible

Eligibility is broad. According to the program site, a child can participate if they are a U.S. citizen or lawfully present in the United States and are eligible to attend a Texas public school district, open-enrollment charter school or public pre-K program. Children of active-duty members of the U.S. armed forces are included. The parent applying must be a Texas resident.

Pre-kindergarten is narrower

State law ties pre-K eligibility to the rules for free public pre-K. For 2026-27, the program says a child had to turn three before September 1, 2026 and fall into at least one category, such as being unable to speak and understand English, being economically disadvantaged (household income below 185% of the federal poverty level), being homeless, having a parent on active military duty or injured or killed on active duty, being in the conservatorship of the Department of Family and Protective Services, being the child of a Star of Texas Award recipient, or being the child of a public school classroom teacher in a district that offers free pre-K.

Documentation the program asked for

The program site lists the most common reasons applicants were found ineligible in the first cycle: they did not meet pre-K rules, income could not be confirmed, citizenship or lawful presence could not be confirmed, or Texas residency could not be confirmed. Income had to be verified with a federal Form 1040 tax return for 2024 or 2025; pay stubs and W-2s were not accepted. Residency could be shown with a Texas driver license or state ID, or with a utility bill, lease or mortgage statement, or voter registration certificate.

How Much Money Students Receive

Award amounts depend on the educational setting the family chooses. The program site and the TEFA parent application guide list these 2026-27 amounts:

Setting	2026-27 amount	Notes
Accredited participating private school (including participating pre-K or kindergarten programs)	$10,474	Set at 85% of the estimated statewide average state and local funding per student, as calculated by the Texas Education Agency
Private school student with a disability	Up to $30,000	Requires an IEP on file with the Texas Education Agency by the end of the application period; amount based on the funding the child’s district would receive for IEP services
Homeschool or other nonpublic setting	$2,000	For children not enrolled in a public school or participating private school or pre-K program

Changing settings after you apply

According to the application guide, once the application window closes, a family can change from “private school” to “homeschool/other” and receive the lower $2,000 amount, but cannot make a change that increases funding. The program’s lottery update adds that students had to opt in and select a participating school or homeschool/other by July 15 to receive funding.

The Lottery and Priority Tiers

Demand far exceeded available money, so the Comptroller used a lottery within priority tiers set by state law. For the 2026-27 year, the program site lists this order:

1. Children with a disability in households with income at or below 500% of the federal poverty level.
2. Children in households with income at or below 200% of the federal poverty level.
3. Children in households with income between 200% and 500% of the federal poverty level.
4. Children in households with income at or above 500% of the federal poverty level, with priority inside this group for children who were enrolled in a Texas public or charter school for at least 90% of the prior school year. Funding for this group may not exceed 20% of the money appropriated for the year.

Federal poverty guidelines used for these tiers are set each year by the U.S. Department of Health and Human Services.

How awards were made

The program’s lottery update explains that all eligible tier 1 applicants and their siblings received awards. Every student was assigned a random lottery number, siblings were grouped with the highest-priority applicant in the household, and tier 2 students were funded in lottery order until money ran out. Everyone not awarded was placed on a waitlist by tier and lottery position. The Comptroller also set aside a reserve to cover successful appeals, with any leftover reserve used for more awards from the waitlist.

The waitlist

According to the program’s waitlist information, waitlisted students show as “eligible” in the program platform with no funding amount displayed. The Comptroller periodically reviews funding and issues more awards when students opt out, when private school applicants switch to the lower homeschool amount, or when appeals are resolved. Recent news on the program site reports additional awards issued to tier 3 students from the waitlist. Families awarded later may receive a prorated amount, depending on timing.

Appeals

Families who believe an eligibility decision was wrong must appeal within 30 days of being notified, and the program says appeal decisions are final. Appeals are meant to correct processing errors, not to submit information that was missing when the application was filed.

What TEFA Funds Can Pay For

TEFA money can only be spent on approved expenses through the program marketplace. Odyssey’s help center lists eligible expenses under the program’s administrative rule, Texas Administrative Code §16.406. They include:

• Tuition and fees at a participating private school
• Fees for dual-credit courses, online courses or programs, and programs leading to industry-based credentials approved by the Texas Education Agency
• Textbooks, instructional materials and uniforms required by an enrolled school, course or higher education provider
• Fees for classes or services from a school district or charter school, when they do not count the child in average daily attendance
• Academic assessment costs
• Tutoring from a private tutor or teaching service, where the tutor holds an active teaching certificate
• Fee-for-service transportation to and from approved education providers
• School breakfast or lunch provided by a private school
• Educational therapies, such as speech, occupational, physical or behavioral therapy, for fees not covered by Medicaid, CHIP, other government benefits or private insurance
• Computer hardware, software and technology required by the student’s private school or homeschool program and used mainly for education, limited to 10% of the annual award
• Services from approved online or out-of-state providers registered to do business in Texas
• Other education-related expenses approved by the Comptroller

Notes for homeschool families

For a homeschooled child, the 10% technology limit means up to $200 of the $2,000 award can go to qualifying technology. Purchases have to come from approved vendors in the marketplace. Our guide to what education savings account funds can pay for compares allowed expenses across states, and our article on whether homeschoolers can use state education funds explains how Texas’s approach differs from states that exclude homeschoolers.

When the Money Arrives

The program site lists the 2026-27 funding schedule:

• July 1, 2026: Private school students received the first 25% of their award, and homeschool or other students received 100% of their award.
• October 1, 2026: Private school students receive the second 25%.
• February 1, 2027: Private school students receive the remaining 50%.

A Comptroller news release from June 30, 2026 reported that nearly 73,000 accounts were set to receive initial funding on July 1. Awards issued later from the waitlist follow the program’s notices for timing and any proration.

Private school requirements

Families choosing a private school should confirm the school participates. The program site says participating private schools must be located in Texas, be accredited by an organization recognized by the Texas Private School Accreditation Commission or another accreditor recognized by the Texas Education Agency, have operated continuously for at least two school years before applying, and give a nationally norm-referenced assessment each year to participating students in grades 3 through 12. Private schools apply on a rolling basis. The site also offers a map-based finder for participating schools and education service providers.

What to Know About 2027-28

The first application window has closed, and the program site invites families who missed it to join a 2027-28 interest list for updates. Some rules for future years are already written into the program description.

Continuing families. Participants in good standing stay in the program automatically, and families only need to confirm they want to continue.

Year 2 priority order. After the first year, applicants are first sorted into these groups, then ranked within each group using the year 1 tiers: siblings of participating children, new eligible applicants, and former participants who left the program to enroll in a public or charter school. If a child is accepted, any eligible sibling who applies in the same period is also accepted.

Planning steps. Families thinking about applying for 2027-28 can prepare by keeping a complete federal tax return available, confirming residency documents, checking whether an IEP is on file with the Texas Education Agency for a child with a disability, and researching participating schools or providers. Our step-by-step ESA application checklist covers documents and deadlines that apply in most states.

FAQ

Frequently Asked Questions

How much is a Texas Education Freedom Account worth?

For 2026-27, the program lists $10,474 for students at accredited participating private schools, up to $30,000 for private school students with a disability and an IEP on file with the Texas Education Agency, and $2,000 for homeschool and other nonpublic settings.

Can homeschoolers get TEFA money?

Yes. Awarded homeschool students receive $2,000 a year, paid in full at the start of the school year, for approved expenses bought through the program marketplace.

Is it too late to apply for 2026-27?

The 2026-27 application window ran from February 4 to March 31, 2026 and is closed. Families can join the program’s 2027-28 interest list for updates on the next cycle.

Do families have to reapply every year?

No. According to the program site, participants in good standing stay in the program and only need to confirm they want to continue.

Who runs the TEFA program?

The Texas Comptroller of Public Accounts oversees the program, and Odyssey helps administer accounts and the marketplace as the certified educational assistance organization.

Is TEFA money taxable?

This article does not give tax advice. Ask a tax professional or check official guidance before filing. N: Last verified October 2026. This article summarizes information published by the Texas Comptroller’s TEFA program and its administrator. It is not legal, tax or financial advice. Confirm current rules, amounts and deadlines at educationfreedom.texas.gov.