Student Funding

Use of Funds 

Scholarships are available to students to enroll in participating schools or homeschooling. Account funds are approved for wide use, including for tuition or fees at a participating school and textbooks required by a participating school; tutoring services provided by an accredited tutor; payment for purchase of curriculum and any required supplementary materials; fees for transportation; tuition or fees for a nonpublic online learning program or course; fees for nationally norm-referenced testing or exams related to postsecondary admissions; contributions to a Coverdell Education Savings Account for the benefit of the participating student; educational therapies by a licensed or accredited provider; approved computer hardware or technology for educational need; services provided under a contract with a public school, including individual classes and extracurricular activities; tuition or fees at an eligible postsecondary institution; textbooks at a postsecondary institution; and fees for the management of the IEA 

Funding Amount and Source 

The state funds the program through the school funding formula. An Individualized Education Account (IEA) is funded by state funds at an amount equivalent to 100% 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). The state funds are subtracted from the amount otherwise payable to the school district where the student resides. Families receive IEA funds quarterly 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. 

(Last updated July 15, 2024) 

Student Eligibility

Students qualify if they are eligible to enroll in kindergarten through 12th grade and have an Individualized Education Plan (IEP) with a primary or secondary diagnosis of one of the following: autism, deaf-blindness, hearing impairment (including deafness), intellectual disability, orthopedic impairment, traumatic brain injury, developmental delay, visual impairment (including blindness), or multiple disabilities. Additionally, students must either (1) have been enrolled in and attended a Tennessee public school for one full school year immediately preceding the school year in which they receive an IEA, (2) be enrolling in a Tennessee 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. 

(Last updated July 15, 2024) 

EdChoice Expert Feedback

Tennessee’s education savings account for students with special needs helps hundreds of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity. Eligibility for the scholarships is limited to students with certain special needs. Less than five percent of Tennessee students are eligible to receive a scholarship. Statewide, less than one percent of students participate in Tennessee’s ESA program. Additionally, Tennessee lawmakers recently passed a new pilot ESA program that is currently under legal challenge. The average ESA is worth about $7,700, which is about 80 percent of the average expenditure per student at Tennessee’s district schools. To expand access to educational choice, Tennessee policymakers should dramatically increase funding for the ESAs and expand eligibility to all students (prioritizing ESAs based on need). Tennessee’s ESA program generally avoids unnecessary and counterproductive regulations. (Last updated December 14, 2023)

Rules and Regulations

Program Guidelines

• Income Limit: None
• Prior Year Public School Requirement: Yes, with exceptions
• Enrollment Cap: None
• Account Cap: 100% of state and local funds reflected in the state funding formula and categorical grants for students with special needs
• Budget Cap: None
• Testing Mandates: State test or nationally norm–referenced tests (grades 3–8)
• Special Needs Pathway: Pathway for students diagnosed with autism, deaf-blindness, a hearing impairment or deafness, an intellectually disability, an orthopedic impairment, a traumatic brain injury, or a visual impairment or blindness

Participant and Family Guidelines

• Click Here for the Program Administrator’s Parent Handbook
• Education Requirements:
  • Educate the student in at least the subjects of language arts, mathematics, social studies, and science
  • Ensure that students in grades 3–8 are annually administered either a nationally norm-referenced test identified by the Tennessee Department of Education or the Tennessee state tests (TCAP) or any future replacements of the TCAP tests
• Parent Supplemented Funds/Scholarships: Allowed
• Disbursement/Payment Frequency: Quarterly
• Reimbursement: Not permitted
• Miscellaneous:
  • Not enroll student in a public school
  • Use program funds only for authorized purposes

Education Provider Guidelines

• Accreditation/Approval: State
• Employment Standards: Conduct background checks on all employees
• Nondiscrimination: Do not discriminate based on race, color, or national origin
• Calendar/Curriculum/Attendance: Submit calendar to state
• Financial: Audit upon request
• Miscellaneous:
  • Do not refund, rebate, or share funds with participating students
  • Comply with all health and safety laws that apply to private schools

(Last updated December 18, 2024)

Governing Statutes

Tenn. Code Ann. §§ 49-10-1401 through 1406 

(Last updated July 15, 2024) 

Legal History

No legal challenges have been filed against the program.

(Last updated July 15, 2024)