Tennessee enacted the nation’s fourth education savings account (ESA) program in 2015. The program, which launched in 2016, gives parents of students with special needs access to an Individualized Education Account (IEA). An IEA can be used for a variety of educational expenses, including private school tuition, private tutoring, learning therapies and more. Learn more about this program’s funding, eligibility and regulations in this section.
America’s fourth education savings accounts (ESA) program
137 participating students (2018–19)
2 percent of students eligible statewide
18 participating schools (2019–20)
Average account value: $5,830 (2018–19 projected)
Average base account value as a percentage of public school per-student spending: 63 percent
Tennessee’s Individualized Education Account (IEA) Program provides parents funds to pay for a variety of educational services for their children, including private school tuition, tutoring, online education, curriculum, therapy, post-secondary educational institutions in Tennessee and other defined educational services. The program launched in 2016–17.
An IEA is funded at an amount equivalent to 100 percent of the state and local funds reflected in the state funding formula that would have gone to the student had he or she attended a zoned public school, plus special education funds to which the student would otherwise be entitled under the student’s Individualized Education Plan (IEP). Families receive IEA funds monthly in an IEA debit card account during the 10 months of the school year. Funds can roll over each quarter, but at least half of the annual award amount must be spent by the end of the school year. Some funds require pre-approval.
Students qualify if they are eligible to enroll in kindergarten through 12th grade. They must also have an IEP and have been diagnosed with one of the following: autism, deaf-blindness, a hearing impairment (including deafness), an intellectual disability, an orthopedic impairment, a traumatic brain injury, developmental delay, visual impairment (including blindness) and/or multiple disabilities. Additionally, students must either (1) have been enrolled in a Tennessee public school during the previous full school year, (2) be attending a Tennessee public school for the first time or (3) have received an IEA in the previous school year. After receiving an IEA, students can no longer be enrolled in a public school.
Tennessee’s education savings account—the fourth program of its type in the nation—is currently limited to children with specified disabilities. Although this is a good step for Tennessee students, the program has room to improve. Tennessee should continue to expand eligibility in the program to include a larger pool of eligible students. The program’s regulations on education providers are reasonable and relatively unobtrusive. The program administration is currently under the department of education, but the legislature should shift it to a different governmental department, such as the department of revenue, or to a nonprofit designated to administer the funds.
Tenn. Code Ann. §§ 49-10-1401 through 1406
No legal challenges have been filed against the program.
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