Skip to main content

Texas School Choice Policies

Last updated: December 26, 2025

Federal and state policies have created unprecedented financial support for Texas families choosing faith-based education. The Trump administration's "One Big Beautiful Bill," signed into law on July 4, 2025, established the first federal tax credit scholarship program in American history. Combined with Texas's own education savings account program signed earlier that year, this creates a transformative environment for Christian microschools.

The Federal Tax Credit: $1,700 Per Donor​

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

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

Separate from the federal program, Texas passed Senate Bill 2 in May 2025, creating the Texas Education Freedom Account (TEFA) program. [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 $10,800 (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)
  • 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

Combined Impact for Texas Christian Microschools​

A Texas family could potentially benefit from both programs:

ProgramAmountSourceAvailable
Texas Education Freedom Account (TEFA)Up to $10,800/student ($30,000 with IEP)State funds2026-2027 school year
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 program is 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. Track SGO certification in Texas - Know which organizations will be distributing scholarships
  2. Understand eligibility requirements - Be prepared to help families navigate the application process
  3. Consider regulatory implications - Evaluate whether accepting scholarship students triggers any compliance requirements
  4. Build relationships with donors - The $1,700 tax credit makes donations to SGOs extremely attractive

Sources​

Primary Sources (Legislative Text)​

Federal:

Texas:

Official Government Sources​

Secondary Sources (Reporting & Analysis)​

Last updated: December 26, 2025. This is a rapidly evolving policy area. Verify current details before making decisions.