Overview of the ESA Program

What is the ESA program?

The ESA program allows eligible students who are zoned to attend a Shelby County district school, a Metro Nashville public school, or a school that was in the Achievement School District (ASD) on May 24, 2019, to use state and local money toward education expenses, including tuition and/or fees at approved private schools.

What students are eligible for the ESA program?

Students must meet the requirements below in order to participate in the ESA program.

 

Tennessee resident entering kindergarten through grade 12

 

Meets one of these requirements:

  • Previously enrolled in and attended a Tennessee public school for one full school year immediately before the school year for which the student receives an ESA
  • Eligible for the first time to enroll in a Tennessee school
 

Zoned to attend a Shelby County district school, a Metro Nashville public school, or a school that was in the Achievement School District (ASD) on May 24, 2019

 

Member of a household with an annual income for the previous year that does not exceed twice the federal income eligibility guidelines for free lunch (see abridged chart below)

 

Note: Students identified as “at-risk” as defined in state law [T.C.A. § 49-3-307(a)(6)] will automatically meet the income requirements for eligibility. “At-risk” is defined as children who are homeless or from households that receive benefits under Temporary Assistance for Needy Families (TANF) programs.

Household Size Twice the Federal Free Lunch Income Guideline
2 $43,966
3 $55,458
4 $66,950
5 $78,442
6 $89,934
7 $101,426

What amount is available for each ESA?

The amount each participating school will receive per participating student is approximately $7,000.

How can ESA funds be used?

Funds in an ESA may only be used for educational purposes. This includes:

  • Tuition or fees at a participating school
  • Required school uniforms at a participating school
  • Required textbooks at a participating school
  • Tuition and fees for approved summer education programs and specialized after-school education programs
  • Tutoring services provided by an individual who meets department requirements.
  • Tuition and fees at an eligible postsecondary institution
  • Transportation to and from a participating school or education provider by taxi or bus service
  • Textbooks required by an eligible postsecondary institution
  • Fees for early postsecondary opportunity courses, exams, or exams related to college admission
  • Educational therapies or services for participating students provided by a department-approved therapist
  • Computer hardware, technological devices, or other department-approved technology fees. (This is applicable only if the technology is used for educational needs, is purchased at or below fair market value, and is purchased through a participating school, private school, or provider.)

How long is each student’s ESA term?

A student must reapply for an ESA each year and will remain eligible for the ESA program until the student:

  1. Enrolls in a public school.
  2. Enrolls in a Category IV or V private school [or a private school not approved under the rules of the State Board of Education (SBE)].
  3. Is no longer a resident of the local school district in which the student lived when the student began participating in the program. (Account holders must reapply to the ESA program each year and verify their home address and income.)
  4. Is suspended or terminated from the program.
  5. Graduates or withdraws from high school. (Certificates of attendance do not equal graduation from high school for the purpose of the ESA program. In other words, the student may continue in the program until he or she receives a high school diploma or receives a passing score on all subtests of the GED or HiSET.)
  6. Reaches 22 years of age. The student may complete the school year in which he or she reaches the age of 22, as long as he or she will not be enrolled in the program past August 15 of the next school year.
  7. Fails to verify that household income meets the requirements.

Application and Admission

What is the application process for students to participate in the program?

To apply for an ESA, the applicant must submit an online application.

The state will announce an open enrollment window each year. To be notified when applications are available, subscribe to the ESA news announcements at https://www.tn.gov/education/school-options/esa-program.html.

Admission to a participating private school is a separate process from approval for an ESA. Each private school has its own admission policies and procedures and families are encouraged to start researching schools after the ESA application is submitted. The award of an ESA does not ensure acceptance to a participating private school.

Do applicants have to verify their annual income as part of the application process?

Yes. All applicants must show that the student is a member of a household with an annual income for the previous year that is not more than twice the federal income eligibility guidelines for free lunch (see chart below).

Household Size Twice the Federal Free Lunch Income Guideline
2 $43,966
3 $55,458
4 $66,950
5 $78,442
6 $89,934
7 $101,426

Income verification must be established through ONE of the following:

How will I know if my student’s application has been approved or denied?

The department will notify the applicant of his or her application status by email.

An award for an Education Savings Account does not mean that a student is accepted to a participating private school. A student must still apply to a participating private school. A participating private school’s decision to accept or reject a student is the sole decision of the school.

Participating schools may not discriminate based on race, color, or national origin. Participating private schools may offer additional financial aid to eligible students in the form of scholarships or payment plans. The application process for additional financial aid will vary by participating school.

How long will the application review process take?

The review process may take up to 21 business days from the date the open application window closes. Application notifications for the ESA program will not occur until the open enrollment window closes.

How many ESAs are available each year?

For the first school year (2020-21), there are 5,000 ESAs available.

What happens if the department receives more applications than the state has ESAs?

If the number of applications goes beyond the maximum number of students that may participate in the program for the school year, there will be an enrollment lottery.

What will the enrollment lottery process look like?

Students who participated in the program in the previous school year will automatically be re-enrolled in the program if renewal requirements are met. In other words, these students will not have to enter the lottery.

If an enrollment lottery is conducted, enrollment preference will be granted in the below order:

  1. Eligible students who have a sibling participating in the program.
  2. Eligible students zoned to attend a Priority School as defined by the state’s accountability system at the time of the enrollment lottery.
  3. Eligible students who are eligible for direct certification status (a free lunch designation).
  4. All other eligible students.

Do eligible students have to reapply to participate in the ESA program each year?

Yes. Each year, participating students must reapply to participate in the ESA program through the FACTS Management online platform. The participating student must verify their address and income eligibility every year.

Can an ESA be used for a participating private school outside of Shelby or Davidson County?

Yes, while your student must be zoned for a Shelby County district school, a Metro Nashville public school, or a school in the Achievement School District, the ESA may be used for an out-of-county participating private school.

Overview of the ESA Program

What is the ESA program?

The ESA program allows eligible students who are zoned to attend a Shelby County district school, a Metro Nashville public school, or a school that was in the Achievement School District (ASD) on May 24, 2019, to use state and local money toward education expenses, including tuition and/or fees at approved private schools.

What students are eligible for the ESA program?

Students must meet the requirements below in order to participate in the ESA program.

 

Tennessee resident entering kindergarten through grade 12.

 

Meets one of these requirements:

  • Previously enrolled in and attended a Tennessee public school for one full school year immediately before the school year for which the student receives an ESA.
  • Eligible for the first time to enroll in a Tennessee school
 

Zoned to attend a Shelby County district school, a Metro Nashville public school, or a school that was in the Achievement School District (ASD) on May 24, 2019

 

Member of a household with an annual income for the previous year that does not exceed twice the federal income eligibility guidelines for free lunch (see abridged chart below)

 

Note: Students identified as “at-risk” as defined in state law [T.C.A. § 49-3-307(a)(6)] will automatically meet the income requirements for eligibility. “At-risk” is defined as children who are homeless or from households that receive benefits under Temporary Assistance for Needy Families (TANF) programs.

Household Size Twice the Federal Free Lunch Income Guideline
2 $43,966
3 $55,458
4 $66,950
5 $78,442
6 $89,934
7 $101,426

What amount is available for each ESA?

The amount each participating school will receive per participating student is approximately $7,000.

How can ESA funds be used?

Funds in an ESA may only be used for educational purposes. This includes:

  • Tuition or fees at a participating school
  • Required school uniforms at a participating school
  • Required textbooks at a participating school
  • Tuition and fees for approved summer education programs and specialized after-school education programs
  • Tutoring services provided by an individual who meets department requirements
  • Tuition and fees at an eligible postsecondary institution
  • Transportation to and from a participating school or education provider by taxi or bus service
  • Textbooks required by an eligible postsecondary institution
  • Fees for early postsecondary opportunity courses, exams, or exams related to college admission
  • Educational therapies or services for participating students provided by a department-approved therapist
  • Computer hardware, technological devices, or other department-approved technology fees. (This is applicable only if the technology is used for educational needs, is purchased at or below fair market value, and is purchased through a participating school, private school, or provider.)

How long is each student’s ESA term?

A student must reapply for an ESA each year and will remain eligible for the ESA program until the student:

  1. Enrolls in a public school.
  2. Enrolls in a Category IV or V private school [or a private school not approved under the rules of the State Board of Education (SBE)].
  3. Is no longer a resident of the local school district in which the student lived when the student began participating in the program. (Account holders must reapply to the ESA program each year and verify their home address and income.)
  4. Is suspended or terminated from the program.
  5. Graduates or withdraws from high school. (Certificates of attendance do not equal graduation from high school for the purpose of the ESA program. In other words, the student may continue in the program until he or she receives a high school diploma or receives a passing score on all subtests of the GED or HiSET.)
  6. Reaches 22 years of age. The student may complete the school year in which he or she reaches the age of 22, as long as he or she will not be enrolled in the program past August 15 of the next school year.
  7. Fails to verify that household income meets the requirements.

Application and Admission

What is the application process for students to participate in the program?

To apply for an ESA, the applicant must submit an online application.

The state will announce an open enrollment window each year. To be notified when applications are available, subscribe to the ESA news announcements at https://www.tn.gov/education/school-options/esa-program.html.

Admission to a participating private school is a separate process from approval for an ESA. Each private school has its own admission policies and procedures and families are encouraged to start researching schools after the ESA application is submitted. The award of an ESA does not ensure acceptance to a participating private school.

Do applicants have to verify their annual income as part of the application process?

Yes. All applicants must show that the student is a member of a household with an annual income for the previous year that is not more than twice the federal income eligibility guidelines for free lunch (see chart below).

Household Size Twice the Federal Free Lunch Income Guideline
2 $43,966
3 $55,458
4 $66,950
5 $78,442
6 $89,934
7 $101,426

Income verification must be established through ONE of the following:

  • A federal income tax return from the previous year, or
  • Temporary Assistance for Needy Families (TANF) or letter of eligibility.

How will I know if my student’s application has been approved or denied?

The department will notify the applicant of his or her application status by email.

An award for an Education Savings Account does not mean that a student is accepted to a participating private school. A student must still apply to a participating private school. A participating private school’s decision to accept or reject a student is the sole decision of the school.

Participating schools may not discriminate based on race, color, or national origin. Participating private schools may offer additional financial aid to eligible students in the form of scholarships or payment plans. The application process for additional financial aid will vary by participating school.

How long will the application review process take?

The review process may take up to 21 business days from the date the open application window closes. Application notifications for the ESA program will not occur until the open enrollment window closes.

How many ESAs are available each year?

For the first school year (2020-21), there are 5,000 ESAs available.

What happens if the department receives more applications than the state has ESAs?

If the number of applications goes beyond the maximum number of students that may participate in the program for the school year, there will be an enrollment lottery.

What will the enrollment lottery process look like?

Students who participated in the program in the previous school year will automatically be re-enrolled in the program if renewal requirements are met. In other words, these students will not have to enter the lottery.

If an enrollment lottery is conducted, enrollment preference will be granted in the below order:

  1. Eligible students who have a sibling participating in the program.
  2. Eligible students zoned to attend a Priority School as defined by the state’s accountability system at the time of the enrollment lottery.
  3. Eligible students who are eligible for direct certification status (a free lunch designation).
  4. All other eligible students.

Do eligible students have to reapply to participate in the ESA program each year?

Yes. Each year, participating students must reapply to participate in the ESA program through the FACTS Management online platform. The participating student must verify their address and income eligibility every year.

Can an ESA be used for a participating private school outside of Shelby or Davidson County?

Yes, while your student must be zoned for a Shelby County district school, a Metro Nashville public school, or a school in the Achievement School District, the ESA may be used for an out-of-county participating private school.

Account Holder Responsibilities

What are the next steps after being accepted into the ESA program?

Once an application has been approved, if the parent (or student who has reached the age of 18) intends on utilizing the ESA for tuition and other approved expenses, an eligible student must apply and be accepted to a participating private school. Parents (or students who have reached the age of 18) must then upload their acceptance letter to the application e-platform to claim the ESA award.

Upon providing proof of acceptance in a private school, the parent (or student who has reached the age of 18) must then register for the online payment management system.

What does the “agreement to participate in the program” involve?

The parent (or student that has reached the age of 18) must sign an agreement to:

  • Provide an education for the participating student that meets the school attendance requirement in state law [T.C.A. 49-6-3001(c)(1)] through enrollment in a state board-approved Category I, II, or III private school.
  • Comply with the requirement that participating students in grades 3-11 participate in the Tennessee comprehensive assessment program (TCAP) tests for math and English language arts each year of enrollment in the program.
  • Not enroll the participating student in the Individualized Education Account (IEA) Program during the time the student is enrolled in the ESA program.
  • Release the local district and student’s zoned school from all responsibilities to educate the student during the time the student is enrolled in the ESA program. Participation in the program waives the student’s right to receive specially-designed instruction and related services according to the Individuals with Disabilities Education Act (IDEA). Participation in the program also makes the student’s Individualized Education Program (IEP) invalid, and the student will not be entitled to a free appropriate public education (FAPE) from the public school district. The availability of disability-related service will be limited.
  • Follow the acceptable uses of ESA funds and the responsibilities of the parent of an eligible student (or eligible student who has reached the age of 18).

When can I begin spending the ESA funds?

Before spending ESA funds, account holders must get pre-approval for tuition and fees, computer hardware or other technological devices, tutoring services, educational therapy services, summer education programs, and specialized afterschool education programs. Pre-approvals will be managed in the payment management online platform.

Will tuition be set aside first before any other expenses can be spent?

Yes. If the account holder indicates in the application process that the intent is to use the ESA funds for private school tuition, these funds will be set aside in the account for tuition and fees only.

Do I have to provide documentation for ESA funds spent?

ESA funds will only be distributed through the payment management system. Service providers the account holder wants to pay will need to register in advance for payment. On rare occasions, the account holder may submit receipts for reimbursement of approved expenses.

Will the department monitor how funds are spent?

Yes. Almost all expenses and requests for payments will require pre-approval. Additionally, the department will establish and advertise a fraud prevention reporting system to allow individuals to report suspected abuse or misuse of the ESA.

If you suspect fraudulent activity, please call our fraud hotline at (615) 532-8561.

Are there consequences for misspent ESA funds?

Yes. If the department determines that an ESA account holder has misspent funds, the department may remove the account holder from eligibility for an ESA. Otherwise, the department may notify the account holder that they are responsible for repaying the misspent amount.

What other actions can the department take regarding ESA funds?

The department is authorized to freeze or withdraw funding directly from the student’s ESA for several reasons.

These reasons include fraud; misuse of funds; failure to follow state laws, rules, procedures or the signed agreement; the student returning to the local school district; funds being deposited into the account by mistake.

Will the state issue families an IRS form 1099 for the ESA award?

No, families will not be issued an IRS form 1099 as a result of receiving an ESA award.

Can account holders appeal the department’s decisions to revoke the ESA account or freeze/withdraw funds?

Yes. The appeals process is outlined on pg. 15 of the Family Handbook.

Can a participating student withdraw from the ESA program?

Yes. A participating student may voluntarily withdraw from the ESA program at any time. If this happens, the account holder must complete the ESA Account Holder Voluntary Withdrawal Form.

What happens to ESA funds if the participating student withdraws from the program?

If a participating student withdraws from the ESA program, or if the ESA is not renewed, the ESA will be closed. Remaining funds will be returned to the state treasurer.

Can a participating student transfer to another private school?

Yes. A participating student may transfer from one approved Category I, II, or III private school to another approved Category I, II, or III private school.

The account holder should first phone department staff before the participating student transfers to ensure all school tuition payments are reconciled and up to date.

What if a participating student graduates high school with leftover money still in the ESA account?

If a participating student graduates high school or reaches the age of 22 and has money left in the ESA account, the student will become a Legacy Student.

A Legacy Student may use ESA funds to attend or take courses from an eligible postsecondary institution.

A Legacy Student’s ESA will be closed after the first of the following events:

  • The Legacy Student graduates from an eligible postsecondary institution
  • Four back-to-back years pass immediately after a Legacy Student enrolls in an eligible postsecondary institution
  • The Legacy Student is not enrolled in an eligible postsecondary institution for 12 back-to-back months

Account Holder Responsibilities

What are the next steps after being accepted into the ESA program?

Once an application has been approved, if the parent (or student who has reached the age of 18) intends on utilizing the ESA for tuition and other approved expenses, an eligible student must apply and be accepted to a participating private school. Parents (or students who have reached the age of 18) must then upload their acceptance letter to the application e-platform to claim the ESA award.

Upon providing proof of acceptance in a private school, the parent (or student who has reached the age of 18) must then register for the online payment management system.

What does the “agreement to participate in the program” involve?

The parent of an eligible student, or a student that has reached 18 years of age, must sign an agreement to:

  • Provide an education for the participating student that meets the school attendance requirement in state law [T.C.A. 49-6-3001(c)(1)] through enrollment in a state board-approved Category I, II, or III private school.
  • Comply with the requirement that participating students in grades 3-11 participate in the Tennessee comprehensive assessment program (TCAP) tests for math and English language arts each year of enrollment in the program.
  • Not enroll the participating student in the Individualized Education Account (IEA) Program during the time the student is enrolled in the ESA program.
  • Release the local district and student’s zoned school from all responsibilities to educate the student during the time the student is enrolled in the ESA program. Participation in the program waives the student’s right to receive specially-designed instruction and related services according to the Individuals with Disabilities Education Act (IDEA). Participation in the program also makes the student’s Individualized Education Program (IEP) invalid, and the student will not be entitled to a free appropriate public education (FAPE) from the public school district. The availability of disability-related service will be limited.
  • Follow the acceptable uses of ESA funds and the responsibilities of the parent of an eligible student (or eligible student who has reached the age of 18).

When can I begin spending the ESA funds?

Before spending ESA funds, account holders must get pre-approval for tuition and fees, computer hardware or other technological devices, tutoring services, educational therapy services, summer education programs, and specialized afterschool education programs. Pre-approvals will be managed in the payment management online platform.

Will tuition be set aside first before any other expenses can be spent?

Yes. If the account holder indicates in the application process that the intent is to use the ESA funds for private school tuition, these funds will be set aside in the account for tuition and fees only.

Do I have to provide documentation for ESA funds spent?

ESA funds will only be distributed through the payment management system. Service providers the account holder wants to pay will need to register in advance for payment. On rare occasions, the account holder may submit receipts for reimbursement of approved expenses.

Will the department monitor how funds are spent?

Yes. Almost all expenses and requests for payments will require pre-approval. Additionally, the department will establish and advertise a fraud prevention reporting system to allow individuals to report suspected abuse or misuse of the ESA.

If you suspect fraudulent activity, please call our fraud hotline at (615) 532-8561.

Are there consequences for misspent ESA funds?

Yes. If the department determines that an ESA account holder has misspent funds, the department may remove the account holder from eligibility for an ESA. Otherwise, the department may notify the account holder that they are responsible for repaying the misspent amount.

What other actions can the department take regarding ESA funds?

The department is authorized to freeze or withdraw funding directly from the student’s ESA for several reasons.

These reasons include fraud; misuse of funds; failure to follow state laws, rules, procedures or the signed agreement; the student returning to the local school district; funds being deposited into the account by mistake.

Will the state issue families an IRS form 1099 for the ESA award?

No, families will not be issued an IRS form 1099 as a result of receiving an ESA award.

Can account holders appeal the department’s decisions to revoke the ESA account or freeze/withdraw funds?

Yes. The appeals process is outlined on pg. 15 of the Family Handbook.

Can a participating student withdraw from the ESA program?

Yes. A participating student may withdraw from the ESA program at any time. If this happens, the account holder must complete the ESA Account Holder Voluntary Withdrawal Form.

What happens to ESA funds if the participating student withdraws from the program?

If a participating student withdraws from the ESA program, or if the ESA is not renewed, the ESA will be closed. Remaining funds will be returned to the state treasurer.

Can a participating student transfer to another private school?

Yes. A participating student may transfer from one approved Category I, II, or III private school to another approved Category I, II, or III private school.

The account holder should first phone department staff before the participating student transfers to ensure all school tuition payments are reconciled and up to date.

What if a participating student graduates high school with leftover money still in the ESA account?

If a participating student graduates high school or reaches the age of 22 and has money left in the ESA account, the student will become a Legacy Student.

A Legacy Student may use ESA funds to attend or take courses from an eligible postsecondary institution.

A Legacy Student’s ESA will be closed after the first of the following events:

  • The Legacy Student graduates from an eligible postsecondary institution
  • Four back-to-back years pass immediately after a Legacy Student enrolls in an eligible postsecondary institution
  • The Legacy Student is not enrolled in an eligible postsecondary institution for 12 back-to-back months

Private Schools FAQ

What is the difference between an entrance exam and a placement exam?

Both entrance exams and placement exams are tests to measure your student’s academic ability. If the school requires that students perform on grade level, the entrance exam is used to see if your student meets the school’s requirements. For other schools, the placement exam is simply used to put your student in the right grade level, the right individual classes, or to provide additional services such as math or reading support for your student.

Private Schools FAQ

What is the difference between an entrance exam and a placement exam?

Both entrance exams and placement exams are tests to measure your student’s academic ability. If the school requires that students perform on grade level, the entrance exam is used to see if your student meets the school’s requirements. For other schools, the placement exam is simply used to put your student in the right grade level, the right individual classes, or to provide additional services such as math or reading support for your student.