Student Funding

An Individualized Education Account (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 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. Some funds require pre-approval from the state department of education.

(Last updated December 14, 2023) 

Student Eligibility

Students qualify if they are eligible to enroll in kindergarten through 12th grade. They must also have an Individualized Education Plan (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.

(Last updated December 14, 2023)

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

• Income Limit: None
• Prior Year Public School Requirement: Yes, with exceptions
• Geographic Limit: Statewide
• Enrollment Cap: None
• Account Cap: 100 percent of state and local funds reflected in the state funding formula and categorical grants for students with special needs
• Testing Mandates: State test or Nationally norm-referenced tests (grades 3–8)
• Limited to 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

Parent Requirements:

• Must sign an agreement to:
  • Educate the student in at least the subjects of language arts, mathematics, social studies and science
  • Not enroll the student in a public school
  • Submit quarterly expense reports and receipts to the Tennessee Department of Education
  • Notify the Tennessee Department of Education when a student moves, withdraws from or enrolls in a school
  • Release the district in which the student resides and is zoned to attend from all obligations to educate the student
• Use program funds only for authorized purposes, including:
  • Tuition or fees at a participating school
  • Textbooks required by a participating school
  • Tutoring services provided by a tutor accredited by a state, regional or national accrediting organization
  • Payment for purchase of curriculum, including any supplemental materials required by the curriculum
  • Fees for transportation paid to a fee-for-service transportation provider
  • Tuition or fees for a nonpublic online learning program or course
  • Fees for nationally standardized norm-referenced achievement tests, AP examinations or any examinations related to college or university admission
  • Contributions to a Coverdell Education Savings Account for the benefit of the participating student
  • Educational therapies or services for participating students from a licensed or accredited practitioner or provider, including licensed or accredited paraprofessionals or educational aides
  • Services provided under a contract with a public school, including individual classes and extracurricular programs
  • Tuition or fees at an eligible postsecondary institution
  • Textbooks required for courses at an eligible postsecondary institution
  • Fees for the management of the IEA by private financial firms
• 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

(Last updated December 14, 2023)

Governing Statutes

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

(Last updated December 14, 2023)

Legal History

No legal challenges have been filed against the program.

(Last updated December 14, 2023)