(The Center Square) – The second round of Texas Education Freedom Accounts (TEFA) Education Savings Account notifications are going out this week for the 2026-2027 school year.
Notifications are going out to more than 53,000 students this week of their acceptance to TEFA, from Monday, May 4, through Wednesday, May 6.
Texas’ first school choice program launched in February with 274,183 students applying. The number of applicants set a national record for the first year of a new school choice program, the state comptroller’s office said.
Two weeks ago, the first round of students, more than 42,600, was notified, The Center Square reported. They included students and their siblings with qualifying disabilities in households at or below 500% of the federal poverty level.
This week, the second round is being notified, those from households with incomes at or below 200 percent of the federal poverty level, or $66,000 per year for a family of four, the comptroller’s office said.
Last year, the Texas legislature established taxpayer-funded Education Savings Accounts through TEFA. It allows families to enroll their children in a school of their choice, pay for private school tuition, homeschool expenses, tutoring, career and technical education programs, among other expenses.
The legislature allocated $1 billion to fund TEFA to support up to roughly 100,000 students. The program allocates roughly $30,000 for disabled students, $10,000 for other students and $2,000 for homeschool students. Eligibility is based on economic need, prioritizing disabled and low-income students, divided in tiers.
Because demand exceeded slots, more than half of eligible applicants were waitlisted. After Tier 1 students received notifications and accepted, the total number of Tier 2 students exceeded available funding. As a result, accepted applicants were chosen by a random lottery, as required by state law, the comptroller’s office said.
Republicans, including Gov. Greg Abbott, who advocated for TEFA, argued ESAs would help low-income and minority families leave failing public schools to attend a school of their choice. According to the data, the majority of Tier 2 applicants, 65%, already attend private school; 35% are homeschooled.
They were also not new private school or homeschool students. Based on 2024-2025 school year data, 68% of Tier 2 applicants were already attending private school or were already being homeschooled, the comptroller’s office said. Overall, the majority of applicants, more than 77%, were existing private school students, The Center Square reported.
The overwhelming majority of applicants did not leave a public school to apply to TEFA. Less than 1% of Texas’ 5.5 million students enrolled in public schools and charter schools applied for TEFA, according to state data.
The comptroller’s office also published racial demographics about second tier applicants. The are white (36%), Hispanic (28%), Black (17%), multiracial (12%), Asian/Pacific Islander (7%), and American Indian/Alaskan Native (less than 1%). When racial groups are combined, minority applicants outnumber white students by two-thirds.
The comptroller’s office also published location demographics about applicants. The majority of families who applied are living in school district areas in cities, with the most living in Houston, Dallas, San Antonio and Forth Worth.
It also explains the lottery and waitlist process being managed by a third-party contractor, Odyssey. The New York company was selected to manage TEFA and receives 5% of the $1 billion allocated to TEFA, or $50 million over a two-year period, as stipulated by law.
Odyssey is conducting the lottery “using a process tested and evaluated by a team of data scientists and data management experts in the comptroller’s office,” the comptroller’s office said. Comptroller staff, state auditor’s staff and advisers from Ernst & Young observed the lottery, the comptroller’s office said.
“All applicants were included in the lottery and assigned a sequential position using a random number generator. Siblings were grouped according to the applicant in their household with the highest priority tier and highest sequential position. Tier 2 students were given awards in sequential order until available funding was allocated,” it said.
Families who’ve received TEFA notices have until July 15 to confirm enrollment in a participating private school, continue homeschooling or opt out of TEFA, the comptroller’s office said. Parents also have 30 days after notification to appeal their child’s funding amount, application priority or ineligibility. If they win their appeal, their child will receive an award or be placed on the waitlist, according to lottery results.
