Funding for Texas’ $1 billion education savings account program is expected to dry up before it reaches all low-income applicants, the state comptroller’s office announced April 2.
The big picture
More than a quarter of a million students applied for the first year of Texas Education Freedom Accounts, which will give participating families access to state funds to send their children to private school or homeschool them. Applications closed March 31 after the deadline was extended by two weeks due to concerns that Islamic private schools had been excluded from the program.
Texas law states that any school-age child who is a U.S. citizen, resides in Texas and is eligible to attend a Texas public school, open-enrollment charter school or prekindergarten program can apply for education savings accounts.
The comptroller’s office deemed about 247,000 applicants eligible for program funding and said another 2,210 students’ applications were under review. Nearly 25,000 students did not qualify to participate, including about 19,000 prospective pre-K students who must meet stricter eligibility requirements under state law.
Most eligible students will be placed on a waitlist for the 2026-27 school year, as the $1 billion program is expected to serve between 90,000 and 100,000 students. State officials said all funds are expected to go to students with disabilities, their siblings and children from low-income families.
“It’s always hard to have to turn people away,” Travis Pillow, a program spokesperson with the comptroller’s office, told Community Impact. “We don’t want any families who are turned away in year one due to lack of available funds to get discouraged. This is Year 1 of a brand new program, and for us to see this level of demand and have to prioritize available funding to a very high-needs group is a very encouraging first step.”
Keep reading for details on the acceptance process and next steps for families.
How it works
The comptroller’s office is currently reviewing applications to confirm eligibility, Pillow said. The education savings account program is designed to prioritize students in the following order:
Tier 1 includes students with disabilities whose annual household incomes are at or below 500% of the federal poverty line, or about $165,000 for a family of four. Nearly 30,000 applicants are in this tier, the comptroller’s office said.Tier 2 includes children with household incomes at or below 200% of the federal poverty line, which is about $66,000 for a family of four. About 79,000 students are in this tier.Tier 3 includes families earning between 200%-500% of the federal poverty line.Tier 4 includes families above 500% of the federal poverty line.If a child is accepted into the program, their eligible siblings who applied will be automatically accepted, Pillow said. Families will be notified beginning this month if they are accepted into the program, and participants will start receiving funding in July.
The comptroller’s office said it anticipates accepting the nearly 30,000 eligible applicants in the first priority tier. Officials will then run a randomized lottery to determine which of the roughly 79,000 Tier 2 applicants make it into the program, although funding is expected to run out before reaching some low-income families. Students who are not selected in the lottery or fall in a latter tier will be put on a waitlist.
Applicants may get off the waitlist if accepted families opt out of the program, decide to switch from private education to homeschooling or do not find an education option that works for them, Pillow said.
Students with disabilities can receive up to $30,000 each in ESA funding, depending on their individual needs. To qualify, a student’s parents must submit an Individualized Education Program, or IEP, that was completed by their local public school district within the past three years, per state law. Families were allowed to provide other disability documentation to be prioritized in the lottery, but an up-to-date IEP is required before families can access the additional funds, Community Impact previously reported.
Other accepted students will receive $10,474 to spend on private school tuition and related expenses, or up to $2,000 for homeschooling.
Looking ahead
Once students are accepted and the lottery is complete, the size of the program’s waitlist could shape how much lawmakers choose to spend on education savings accounts during the 2027 legislative session. Program funding is currently capped at $1 billion, with the nonpartisan Texas Legislative Budget Board previously projecting that demand would drive lawmakers to expand it to $3.3 billion by 2028 and $4.8 billion by 2030.
“The hardest vote that legislators took in favor of this program is the one they already took to pass it [in 2025],” Pillow said. “Now that there’s real people that are benefiting and people have seen the scale of the demand that’s out there, I think that’s going to create a lot of positive energy around continuing to grow this program.”
Pillow predicted that demand for education savings accounts will rise in future years, noting that some families were “hesitant to apply in Year 1” or didn’t hear about the program until after applications closed.
“A lot of the time, it takes a while to earn the trust of all the families in school that might want to participate,” he told Community Impact. “So I think that there’s a lot of parents who maybe didn’t necessarily apply in Year 1, who will be interested in the years to come. … Our goal is to continue to support this program and to work with the legislature to continue to find ways to make sure that we’re meeting as much of the demand as we possibly can,” Pillow said.
Ahead of next year’s legislative session, Texas lawmakers are slated to hold hearings on the program’s future, with Lt. Gov. Dan Patrick asking state senators to make recommendations on “how the legislature can enhance and expand upon Texas’ historic and successful school choice program.”
Dee Carney, who leads a watchdog group called the Texas Center for Voucher Transparency, questioned when those hearings would take place. She noted that outside of the program application, families must separately apply to private schools and have until July 15 to indicate which private school they will send their children to.
State law does not require private schools to accept all interested students, Community Impact previously reported.
“Will they be held after we have those … July data points as to who the private schools accepted?” Carney said in an interview with Community Impact. “If it’s before, then you’re really still just talking applications. So we will be watching those hearings very closely to see what new data or new insights the comptroller has at that point.”
By the numbers
About one-fourth of program applicants were enrolled in a public school during the 2024-25 school year, according to the comptroller’s office. Pillow said another quarter of interested families have young students who were not previously in school and “are just getting started with their … educational journey,” while the other half of applicants are currently enrolled in a private school or homeschool.
“This is about what you would expect to see in Year 1—there’s kind of a built-in audience for this program among people who are already homeschooling or already attending private school,” he said. “And then there’s a small number of people who are maybe currently enrolled in public school and looking to make a change.”
State data shows that 57% of public school applicants fall within the first two tiers for the program lottery based on their disability status and household income.
If a student leaves their public school to pursue private education or homeschooling through the ESA program, their parents must officially withdraw them from public school, Pillow noted. He said the comptroller’s office will “perform checks in the fall and again in the spring” to verify that no student participating in the ESA program is also enrolled in a public school.
Roughly 77% of applicants said they intended to use ESA funds to help cover private school costs, while other applicants said they would use the money for homeschooling, per state data.
Families who want to use state funds for pre-K programs submitted over 36,000 applications, which is more than those interested in other grade levels. Half of pre-K applicants were deemed ineligible for the program under state law, which requires them to meet stricter eligibility requirements than other applicants, such as learning English, receiving free or reduced-price school meals or having a parent in the military.
About 45% of program applicants were white, state data shows, while 23% were Hispanic and 12% were Black. Eleven percent of applicants identified as multiracial, 8% identified as Asian/Pacific Islander and 1% identified as American Indian/Alaska Native.
In comparison, during the 2024-25 school year, about 24% of Texas public school students were white, 54% were Hispanic and 13% were Black, according to Texas Education Agency data. About 60% of students in that school year were considered economically disadvantaged, which refers to children eligible for free and reduced-price school meals.
Pillow said program participants will likely have different demographics and “be a more disadvantaged group than the group that applied.”
“I think the legislature struck a very wise balance, where if there’s going to be limited funds available, those limited funds should go to the students with the greatest need,” he said. “That’s going to start with students with disabilities, who often have the most to gain from a customized, parent-directed education, then moving to low-income families, who often have the fewest options in terms of where they go to school.”
Carney said she was interested to see if Texas would “follow the pattern we’ve seen in other states” once families are accepted and begin using program funds. In several states with similar programs, enrollment data shows that a majority of participants were already enrolled in private schools when they joined the program.
In 2023, the first year of Arkansas’ education freedom account program, 95% of participating students had not previously attended a public school, the Arkansas education department reported. This includes students already enrolled in private schools and those attending school for the first time.