Education Savings Account Program

  • Education Savings Account (ESA)
  • Enacted 2019
  • Launched 2021

Tennessee’s Education Savings Account Program is a state-funded Education Savings Account program that is available to students from low- and middle-income households in Chattanooga, Memphis, and Nashville who are switching out of a public district or charter school or are eligible for the first time to enroll in a Tennessee school. Education Savings Account students who enroll in private schools may also use the Education Savings Account funds for various K–12 and higher education expenses in addition to private school tuition and fees.  

Although this program remains subject to litigation, the lower court refused to block its implementation and ruled that opponents had no legal standing to oppose the program in a court of law. The program was upheld. Possible appeal of this ruling is pending. The state is moving forward to implement the program, and parents should anticipate that funding may be available for the 2023–24 school year. 

We do not administer this program.

Jump Links

  • 2nd

    Tennessee’s Second Education Savings Account Program 

  • 1,972

    Participating students (2023-24).

  • 68%

    of Families in Hamilton County (Chattanooga), Nashville and Shelby County (Memphis) Income Eligible 

  • $9,049

    Maximum Education Savings Account Value  

  • 82%

    Maximum Value as a Percentage of Public School Per-student Spending 

Percent of Tennessee students eligible for the Education Savings Account Pilot Program

Student Funding

The Education Savings Account amount is equal to the state and local Basic Education Program (BEP) per-pupil amount of a student’s home district or the statewide average BEP ($8,192), whichever amount is less. Families may pay for tuition and educational services in excess of the maximum Education Savings Account amount.  

Funds are deposited into families’ Education Savings Accounts at least four times per school year to help parents pay for private school tuition and fees. Funds may also be used for textbooks, state-approved tutoring and therapy services, transportation to educational institutions or services, computer hardware and software, school uniforms, summer education programs and higher education expenses.  

(Last updated May 10, 2023) 

Student Eligibility

Students must be eligible to enroll in either the Hamilton County (Chattanooga), Shelby County (Memphis) or Metro Nashville school districts, or the Achievement School District. In addition, students must have attended a Tennessee public school during the prior school year, or any year during the 2019-20 through 2021-22 school years, or be newly eligible to attend a Tennessee public school, or was newly eligible to attend public school any year during the 2019-20 through 2021-22 school years, and come from households earning less than 200 percent of the federal free lunch program ($111,000 for a family of four in 2023–24).   

Participating students must be enrolled in a state-approved private school in order to continue receiving Education Savings Account funds. If students move into a different school district while receiving an Education Savings Account, they are no longer eligible. Absent this stipulation and annual income verification, returning students are guaranteed Education Savings Accounts.  

For the first year, there is a 5,000-student enrollment cap. If there are more applications than 75 percent of that figure, the cap is allowed to grow by 2,500 students a year until reaching 15,000 students. If there are more applications than Education Savings Accounts available, the state will conduct a lottery that prioritizes (1) siblings of Education Savings Account recipients, (2) students zoned to a priority school as designated by the Tennessee Department of Education, (3) students directly certified to receive benefits from the Supplemental Nutrition Assistance Program (SNAP) program, and then (4) all other eligible students. 

(Last updated May 10, 2023) 

EdChoice Expert Feedback

Like Iowa’s ESA program, students participating in Tennessee’s pilot Education Savings Account for low-income students in Chattanooga, Memphis, and Nashville must be enrolled in a private school. Policymakers could do more to expand educational opportunity. 

Eligibility for the scholarships is limited to students in Chattanooga, Memphis, and Nashville from households earning less than 200 percent of the federal free lunch program ($111,000 for a family of four in 2022–23). About two-thirds of students in Chattanooga, Memphis, and Nashville are eligible to receive a scholarship. The Education Savings Account program is still subject to litigation, but the state is moving forward with implementation. Additionally, less than 1 percent of students statewide participate in Tennessee’s Individualized Education Account program. 

The maximum scholarship size is projected to be about $8,200, which is 82 percent of the average expenditure per student at Tennessee’s district schools. Enrollment is capped at 15,000 students in year 5 and beyond, which is less than 7 percent of the K–12 student population in Chattanooga, Memphis, and Nashville. 

In order to expand access to educational choice, Tennessee policymakers should dramatically increase funding for the scholarships and expand eligibility to all students (prioritizing scholarships based on need). 

In addition to tuition or fees at a private school, parents may also use ESA funds for textbooks required by the school, tutoring services, transportation to and from a participating school or provider, fees for early postsecondary opportunity courses and examinations required for college admission, computer hardware and technological devices (purchased through the school), uniforms, tuition and fees for approved summer education programs and specialized afterschool education programs (not including afterschool childcare), tuition, fees, and textbooks at an eligible postsecondary institution, approved educational therapy services, and fees for the management of the ESA by a private or non-profit financial management organization (not to two percent of the funds deposited in a fiscal year. 

Tennessee’s Education Savings Account program imposes some unnecessary and counterproductive regulations. For example, the program requires Education Savings Account students to take the state’s standardized test. Instead of mandating a single test, policymakers should allow parents and schools to choose from a variety of nationally norm-referenced tests. 

(Last updated May 10, 2023) 

Rules and Regulations

  • Income Limit: 200 percent x free lunch  
  • Prior Year Public School Requirement: Yes, with exceptions 
  • Geographic Limit: Chattanooga, Memphis, and Nashville  
  • Enrollment Cap: 15,000 students (year 5 and thereafter)  
  • Education Savings Account Cap: approximately $7,300 (2020–21)  
  • Testing Mandates: State test 


School Requirements 

  • Be approved to participate by the state department of education   
  • Comply with all state and federal health and safety laws applicable to nonpublic schools  
  • Administer annually to participating students the Tennessee Comprehensive Assessment Program (TCAP) tests for math and English language arts  
  • May not share or refund Education Savings Account funds to a participating family  
  • Meet state and federal nondiscrimination policies 
  • Not employ any staff member that advocates for or belongs to a political party advocating for the overthrow of the American form of government 
  • Conduct criminal background checks on employees  
  • Maintain a school year that satisfies the state’s compulsory school attendance requirement  

(Last updated May 10, 2023) 

Governing Statutes

Tenn. Code Ann. § 49-6-2601–2612

(Last updated March 1, 2023)