Education Savings Account Pilot Program
- Enacted 2019
- Launched 2021
Tennessee’s Education Savings Account Pilot Program is a state-funded voucher program that is available to students from low- and middle-income households in 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. Voucher students who enroll in private schools may also use the voucher funds for various K–12 and higher education expenses in addition to private school tuition and fees. The program is currently inoperable pending litigation.
We do not administer this program.
Tennessee’s First School Voucher Program
of Families in Nashville and Shelby County (Memphis) Income Eligible
Maximum Voucher Value (2020–21)
Maximum Value as a Percentage of Public School Per-student Spending
Percent of Tennessee students eligible for the Education Savings Account Pilot Program
The voucher 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 (about $7,300 in 2020–21), whichever amount is less. Families may pay for tuition and educational services in excess of the maximum voucher 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.
Students must be eligible to enroll in either the Shelby County (Memphis) or Metro Nashville school districts. In addition, students must have attended a Tennessee public school during the prior school year or be newly eligible to attend a Tennessee public school and come from households earning less than 200 percent of the federal free lunch program ($68,120 for a family of four in 2020–21).
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 a voucher, they are no longer eligible. Absent this stipulation and annual income verification, returning students are guaranteed vouchers.
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 vouchers available, the state will conduct a lottery that prioritizes (1) siblings of voucher recipients, (2) students zoned to a priority school as designated by the Tennessee Department of Education, and (3) students directly certified to receive benefits from the Supplemental Nutrition Assistance Program (SNAP) program.
EdChoice Expert Feedback
Although billed as an Education Savings Account, unlike ESA programs in other states, students participating in Tennessee’s pilot voucher for low-income students in 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 Memphis and Nashville from households earning less than 200 percent of the federal free lunch program ($68,120 for a family of four in 2020–21). About 69 percent of students in Memphis and Nashville are eligible to receive a scholarship. Statewide, only 0.2 percent of students participate in this program. The voucher program is currently on hold pending a lawsuit. Statewide, less than 0.1 percent of students participate in Tennessee’s Individualized Education Account program.
The maximum scholarship size is projected to be about $7,300, which is about 83 percent of the average expenditure per student at Tennessee’s district schools. Enrollment is capped at 5,000 students, which is less than 3 percent of the K–12 student population in 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).
Tennessee’s voucher program imposes some unnecessary and counterproductive regulations. For example, the program requires voucher 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.
Rules and Regulations
- Income Limit: 200 percent x free lunch
- Prior Year Public School Requirement: Yes
- Geographic Limit: Memphis and Nashville
- Enrollment Cap: 5,000 students (escalator)
- Voucher Cap: $7,300 (2020–21)
- Testing Mandates: State
- 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
On November 24, the Tennessee Attorney General filed an appeal to the Tennessee Supreme Court, asking the court to consider the adverse decision delivered by the Tennessee Court of Appeals in The Metropolitan Government of Nashville and Davidson County et. al. vs. Tennessee Department of Education et. al. The State seeks to overturn the Court of Appeals ruling that the Tennessee ESA Pilot program is local in effect, applicable only to Davidson and Shelby Counties in their governmental capacities, and as such, is unconstitutional under the Tennessee Constitution Article XI, Section 9, Home Rule provision, which protects local control over local legislation. The Tennessee Supreme Court has discretion whether to accept the case. If rejected, the adverse of the Court of Appeals will stand. Pending. The Metropolitan Government of Nashville and Davidson County et. al. vs. Tennessee Department of Education et. al., Tennessee Court of Appeals, Case number M2020-00683-COA-R9-CV.
This case began on February 6, 2020, when Metro Nashville and Shelby County, Tennessee sued the state, contending that Tennessee’s ESA Pilot voucher program violated numerous sections of the Tennessee Constitution. In particular, it was alleged that Tennessee’s new voucher violates the state constitution’s home rule provision forbidding legislation targeting a specific county because, “it is local in form and effect, not of general application but rather applicable and designed to be applicable to two particular counties…”
On May 4, 2020, the Chancery Court of Davidson County ruled that the Tennessee voucher violated the Home Rule provision of the state constitution. The court also ruled that the program could not continue pending the outcome of litigation. The court reserved other issues raised in the lawsuit, choosing to rule only on the Home Rule claim.
The case was appealed, and on September 29, 2020, the Tennessee Court of Appeals affirmed the ruling of the lower court. The Court of Appeals also denied the state’s request to continue the program pending the outcome of litigation.
In a separate case filed on March 2, 2020, the ACLU of Tennessee, Southern Poverty Law Center (Mississippi), and the Education Law Center (New Jersey), sued Tennessee Gov. Bill Lee, also opposing Tennessee’s Education Savings Account voucher program. They allege the program violates the following articles of Tennessee’s state constitution: 1) Article XI, Section 9, the same “Home Rule” provision being litigated in Metro Nashville vs. TN Dept of Education; 2) Article XI, §12, the “Education Clause” requiring a “system of free public schools,” and Article I, §8 and Article XI, §8 “equal protection” provisions requiring that free public schools offer substantially equal opportunities for adequate education to all students; 3) Article XI, §12 requiring a single system of public schools, 4) Article II, §24, the “Appropriation of Public Moneys” provision requiring an appropriation for the first year of the program. They also allege violation of the BEP statutory school funding formula in that it does not provide for funding any schools other than public schools.
The Chancery Court of Davidson County heard arguments for this case at the same time as arguments were presented in the Metro Nashville case, but the court decided to hold this case and the remaining issues presented until after a higher court has finalized the ruling on whether Tennessee’s voucher violates the Home Rule provision. Pending. Roxanne McEwen et. al. vs. Bill Lee et. al., Chancery Court for Davidson County; Case No. 20-0242-II.