Education Savings Account Pilot Program
- Education Savings Account (ESA)
- Enacted 2019
- Launched 2021
Tennessee’s Education Savings Account Pilot 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.
Tennessee’s Second Education Savings Account Program
of Families in Hamilton County (Chattanooga), Nashville and Shelby County (Memphis) Income Eligible
Maximum Education Savings Account Value
Maximum Value as a Percentage of Public School Per-student Spending
Percent of Tennessee students eligible for the Education Savings Account Pilot Program
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)
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
- 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)
(Last updated March 1, 2023)
On November 23, 2022, The Chancery Court of Davidson County, in Metropolitan Government of Nashville and Davidson County et al. v. Tennessee Department of Education, et al., consolidated with McEwen v. Bill Lee, Governor, granted the state defendants and intervenors motions to dismiss plaintiffs amended complaints. The court held that plaintiffs lack standing to sue, and in the alternative, held that their claims lack ripeness to sue. This case may be appealed.
The case began in this court in 2020 (see below), proceeded to the Tennessee Court of Appeals and Supreme Court on the issue of home rule only, and was then remanded back to the Chancery Court for consideration of remaining issues. The Chancery Court refused plaintiffs’ request to issue an injunction against the program pending outcome of remaining litigation, and steps are now being taken to implement the program. The Metropolitan Govt of Nashville and Davidson County, et.al. v. Tennessee Dept of Education, Chancery Court of Davidson County, Case No. 20-0143-II consolidated with McEwen et.al. v. Bill Lee, Governor, Chancery Court of Davidson County, Case No. 20-0242-II..
This case began in February of 2020. A second case, Roxanne McEwen v. Gov Bill Lee, Chancery Court of Davidson County, Case No. 20-0242-II, was filed in March of 2020 by a group of parents that also challenged the Home Rule provision, and claimed the program diverted public education funds to private schools, provided different treatment of public and private schools, and included no anti-discrimination and civil rights protections. Although both cases were heard at the trial court level, the court allowed only the Home Rule issue to proceed NS held the remaining legal complaints pending outcome of the Tennessee Supreme Court’s decision about Home Rule. In May 2020, the lower court ruled that the ESA Pilot violated the Home Rule provision. The Metropolitan Govt of Nashville and Davidson County, et.al. v. Tennessee Dept of Education, Chancery Court of Davidson County, Case No. 20-0143-II.
The Tennessee Court of Appeals agreed with the Chancery Court and in September 2020 ruled against the program. The Metropolitan Govt of Nashville and Davidson County, et.al. v. Tennessee Dept of Education, Court of Appeals of Tennessee at Nashville, Case No. M2020-00683-COA-R9-CV.
On May 18, 2022, the Tennessee Supreme Court in Metropolitan Government of Nashville and Davidson County et al. v. Tennessee Department of Education, et al., ruled against plaintiffs’ challenge of the state’s ESA Pilot voucher program. The sole issue under consideration by the Tennessee Supreme Court was whether the program violates the Tennessee Constitution’s Home Rule provision, which prohibits the legislature from targeting a particular county for legislation without a vote of citizens in that county approving the measure. The ESA Pilot only applies to the two counties bringing this litigation. The Court held that the ESA pilot voucher does not violate the state constitution’s home rule provision and directed that the case be remanded back to the trial court to consider remaining challenges. Metropolitan Government of Nashville and Davidson County et al. v. Tennessee Department of Education, et al., Tennessee Supreme Court, Docket Number M2020-00683-SC-R11-CV.
(Last updated January 5, 2023)