Important Updates: Final TEFA Rules Clarify Key Program Details
- Accessible Education
- Dec 1
- 5 min read
Updated: Dec 2
The Texas Comptroller announced the adoption of the final rules for the Texas Education Savings Account Program (TEFA) on November 25, 2025. There are several critical updates and clarifications to our previous Field Notes coverage analyzing the previously proposed rules. If you've been following along, here's what you need to know.
Critical Update: TEFA Disability Documentation Requirements
This is the most important update, and there's significant confusion you need to be aware of. The Texas Education Agency (TEA) released guidance in November 2025 that contradicts the Comptroller's final adopted rules. Here's what you need to know:
The Contradiction
TEA Guidance (November 2025) states: For lottery prioritization purposes, the definition of "child with a disability" is expanded to include:
Certification from licensed physicians
Proof of supplemental income based on disability (SSI/SSDI letters)
However, the TEA guidance explicitly notes this is "based on proposed rulemaking by the Texas Comptroller and subject to change."
Comptroller's Final Adopted Rules say: The Comptroller rejected these alternatives and adopted a more rigorous standard that aligns with state and federal special education law.
What Documentation is Actually Required
Under the final adopted rules (which supersede the TEA guidance), acceptable documentation for lottery prioritization includes:
Proof of eligibility meeting 19 TAC §89.1040, submitted in a Comptroller-prescribed format and signed by one or more licensed professionals qualified to attest the child meets the applicable eligibility definition
An out-of-state IEP created by a school district in another state
A Full Individual and Initial Evaluation (FIIE) conducted by a Texas school district
Authorization to verify an IEP issued by a Texas school district or open-enrollment charter school
What this means: Simple medical certifications or SSI/SSDI letters are not sufficient for prioritization under the final rules, despite what the TEA guidance suggests.
Why the Change?
The Comptroller received comments from organizations arguing that a medical diagnosis is not equivalent to a school's special education eligibility determination. The Comptroller agreed, concluding that referencing 19 TAC §89.1040 "best aligns the rule with state and federal law that addresses eligibility for special education."
Additional Funding Still Requires an IEP
Beyond prioritization, if you want to access the additional disability funding (up to $30,000 total), you must have:
A valid IEP issued by a Texas school district or charter school
Out-of-state IEPs and FIIEs qualify for prioritization but do not qualify for the enhanced funding calculation.
Action Steps for Families
If you have a child with a disability and want both priority access and maximum funding:
Submit a written evaluation request to your school district now
Timeline: 15 days for district response + 45 school days for evaluation + 30 calendar days for ARD meeting
Ensure the evaluation determines eligibility under 19 TAC §89.1040
Obtain a formal IEP from the district
Important: Do not rely solely on the TEA guidance document. The Comptroller's final adopted rules are the governing standard, and they require documentation that demonstrates special education eligibility under state and federal law, not just medical diagnoses.
Key Changes from Proposed to Final Rules
1. Waitlist Applications No Longer Expire
Previous rule: Waitlisted applications expired annually, requiring families to reapply from scratch.
Final rule: Waitlisted families can simply update or supplement their existing application rather than starting over. The Comptroller agreed that requiring a complete reapplication would create an undue burden.
2. Income Verification Made More Equitable
Previous approach: Used "total income" for eligibility calculations.
Final rule: Now uses "adjusted gross income (AGI) for federal income tax purposes or its estimated equivalent."
Why this matters: Self-employed families are now treated equitably. AGI accounts for business deductions that would otherwise penalize entrepreneurs and small business owners. This aligns TEFA with other financial aid programs like FAFSA.
3. Simplified Process for Returning Families
Great news: Once you’ve been approved and are participating in the program and in good standing, you will not need to reapply annually.
What you'll do instead: Simply provide annual notice of your intent to continue participation. This significantly reduces paperwork and ensures returning families maintain their place without competing in the lottery against new applicants.
4. Private School Location Flexibility
Previous requirement: Private schools needed to operate a campus in Texas for at least two years.
Final rule: The two-year continuous operation requirement can be met by any campus operated by the school, including out-of-state campuses. As long as the school itself is located in Texas, it can qualify based on operational history anywhere.
5. Tutor and Vendor Location Flexibility
Previous understanding: Private tutors and teaching services needed to be located in Texas.
Final rule: Tutors and teaching services are categorized as "vendors" and can operate virtually or remotely from outside Texas, provided they are properly registered to do business in the state. This opens up significantly more options for families.
6. PreK/Kindergarten Funding Clarification
Big news for early childhood: The $2,000 funding cap does not apply to participants enrolled in an approved private provider of a prekindergarten or kindergarten program accredited under Education Code §29.171.
These programs are now explicitly classified as "education service providers," making families eligible for the full base amount (85% of statewide average daily attendance funding).
7. School Employment Clarification
Important for families: Children can now attend private schools where a relative is employed.
The rule: Payments to an entity (other than a sole proprietorship or partnership) are not considered payments to an individual related to the participating child. This means tuition to a private school structured as a corporation or nonprofit is permitted even if a parent or relative works there.
Quick Overview: Additional Clarifications in TEFA Final Rules
The final rules also provide important updates on:
Alternative assessments for students with disabilities are now explicitly allowed
Virtual campuses are formally recognized alongside physical school buildings
Online courses no longer need to be "for-credit" to qualify
Instructional materials now have a clear definition that includes digital materials and equipment
Background checks can temporarily use the existing do-not-hire registry while the new interagency system is being developed
Payment systems are now more flexible, with any Comptroller-approved system acceptable (not limited to a single marketplace)
Account suspensions can be lifted earlier if corrective action is completed
Special education prioritization now accepts out-of-state IEPs and FIIEs for lottery purposes
TEFA: What's Next
We know this is a lot of information, and different stakeholders need different details. Over the coming days, we'll be publishing a comprehensive series breaking down these final rules:
For Families
Parents of Children with Disabilities: Understanding priority documentation, IEP requirements, and enhanced funding up to $30,000
Homeschooling and Non-Accredited School Families: Navigating the $2,000 funding cap and what it means for your choices
Pre-K and Kindergarten Families: Determining eligibility and accessing full funding for approved programs
Returning Families (Future Years): How simplified continuation will work once the program is established
For Education Providers
Private Schools Seeking Approval: Meeting accreditation, operation, and location requirements to become an education service provider
Tutors, Therapists, and Educational Service Vendors: Understanding your vendor classification and qualification requirements
Public and Charter Schools: Participating as vendors while maintaining the critical ADA boundary
Online Course and Program Providers: Capitalizing on the removal of the "for-credit" requirement
Each post will be tailored to help you understand exactly what these rules mean for your specific situation.
The Bottom Line
The final TEFA rules provide greater clarity, flexibility, and equity compared to the proposed version. The Comptroller listened to public feedback and made meaningful adjustments. However, the distinction between disability prioritization and disability funding remains the most critical detail for families to understand, one that requires careful planning and timely action.
Stay tuned for our detailed stakeholder guides.
This post reflects the final adopted rules and TEA guidance as of November 2025. We will continue to update our resources as additional guidance becomes available.
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