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Texas School Choice Policies

Last updated: January 8, 2026

Texas now has two major funding sources for families choosing faith-based education. The state's Texas Education Freedom Account (TEFA) program launches in Fall 2026. The federal Educational Choice for Children Act (ECCA) follows in 2027. Together, they create a transformative environment for Christian microschools.

Texas Education Freedom Account (TEFA): Up to $10,000+ Per Student​

Texas passed Senate Bill 2 in May 2025, creating the Texas Education Freedom Account (TEFA) program. This is the most immediate opportunity for Texas families. [Source: SB 2 Full Text]

TEFA Award Amounts​

Per Texas Education Code Sec. 29.361(a), as amended by SB 2:

Student TypeAnnual Amount
Students in accredited private schoolsUp to $10,474 (85% of statewide funding per student)
Students with disabilities (with IEP)Up to $30,000
Homeschool students$2,000

[Source: Texas Comptroller Final Rules, Nov. 25, 2025]

How TEFA Works​

  • Funds can cover: private school tuition, meals, uniforms, tutoring, textbooks, instructional materials, transportation, educational therapies, online education programs, and computer hardware/software
  • Unused funds roll over year to year with no limit
  • The program launched with $1 billion in funding for the 2026-2027 school year (approximately 90,000 scholarships available)

Priority Eligibility​

  1. Students with disabilities whose family income is at or below 500% of Federal Poverty Guidelines
  2. Children whose family income is at or below 200% of FPG
  3. Children whose family income is between 200% and 500% of FPG
  4. All other students (no more than 20% of spots, priority to those switching from public schools)

Key Dates​

  • September 1, 2025: Law takes effect
  • December 9, 2025: Private schools invited to join program
  • February 4, 2026: Family applications open (program managed by Odyssey)
  • March 17, 2026: Application window closes
  • Fall 2026: First year TEFA funds can be used

Administration​

  • Administered by the Texas Comptroller of Public Accounts
  • Program managed by Odyssey (program manager)
  • Certified Educational Assistance Organizations (CEAOs) support families and process reimbursements
  • Private schools must administer a nationally norm-referenced assessment in grades 3-12

The Federal Tax Credit: $1,700 Per Donor (Starting 2027)​

The Educational Choice for Children Act (ECCA), embedded in the One Big Beautiful Bill (Section 70411/110109), allows individual taxpayers to receive a dollar-for-dollar tax credit of up to $1,700 for donations to qualified Scholarship Granting Organizations (SGOs). [Source: H.R.1 Full Text]

How It Works​

  1. A taxpayer donates to a state-approved SGO
  2. The taxpayer receives a 100% tax credit (not just a deduction) for that donation, up to $1,700
  3. The SGO distributes scholarship funds to eligible families
  4. Families use the scholarship for private school tuition, homeschool expenses, tutoring, and other educational costs

Key Details​

  • Effective date: January 2027
  • Credit amount: $1,700 per individual taxpayer (likely $3,400 for married couples filing jointly)
  • Carry forward: Donations exceeding $1,700 can be carried forward for up to five years
  • No aggregate cap: Unlike earlier versions of the bill, there is no limit on total national tax credits
  • Permanence: The program has no sunset clause

Eligibility for Families​

Students must meet these criteria to receive scholarships:

  • Eligible to enroll in a public school (includes current private school and homeschool students)
  • Family income at or below 300% of local area median income
  • Located in a state that has opted in to the program

Texas Has Opted In​

On December 10, 2025, Governor Greg Abbott announced that Texas will participate in the federal program when it launches in 2027. Texas is the largest state to confirm participation. [Source: Governor's Office Press Release]

This means:

  • Texas families earning up to 300% of local median income can apply for federal scholarships
  • SGOs will be certified in Texas to receive tax-credited donations
  • Christian microschools in Texas can accept students using these scholarships

Combined Impact for Texas Christian Microschools​

A Texas family could potentially benefit from both programs:

ProgramAmountSourceAvailable
Texas Education Freedom Account (TEFA)Up to $10,474/student ($30,000 with IEP)State fundsFall 2026
Federal Tax Credit Scholarships (ECCA)Varies by SGOPrivate donations with federal tax creditJanuary 2027

What This Means for Christian Microschools​

For families:

  • Reduced financial barriers to choosing faith-based education
  • Potential to combine state ESA funds with federal scholarship funds
  • Access to educational options previously out of financial reach

For microschool operators:

  • Larger pool of families who can afford tuition
  • More stable revenue as families access multiple funding sources
  • Reduced dependency on a small number of full-pay families

For donors:

  • A way to support Christian education at zero net cost (dollar-for-dollar tax credit)
  • Direct impact on scholarship availability for families in their community

Open Questions​

The programs are new and details are still being clarified:

  • Can families stack state and federal scholarships? Likely yes, but regulations are pending
  • Which SGOs will be certified in Texas? To be determined before 2027 launch
  • Will accepting scholarships trigger federal regulations for schools? The final bill removed some earlier provisions, but questions remain about Title IX, Section 504, and other federal requirements
  • How will homeschools qualify? Depends on state definitions and SGO policies

What Christian Microschools Should Do Now​

  1. Apply for TEFA eligibility - Schools must be approved by Odyssey to accept TEFA funds
  2. Track SGO certification in Texas - Know which organizations will distribute federal scholarships in 2027
  3. Understand eligibility requirements - Be prepared to help families navigate the application process
  4. Consider regulatory implications - Evaluate whether accepting scholarship students triggers any compliance requirements
  5. Build relationships with donors - The $1,700 tax credit makes donations to SGOs extremely attractive

Sources​

Primary Sources (Legislative Text)​

Texas:

Federal:

Official Government Sources​

Secondary Sources (Reporting & Analysis)​

Last updated: January 8, 2026. This is a rapidly evolving policy area. Verify current details before making decisions.