Understanding Texas Senate Bill 2 (SB2): Educational Savings Accounts
- Accessible Education
- Aug 3
- 9 min read
Updated: Nov 10
If you're a parent, teacher, or school leader who has heard about Senate Bill 2 (SB2) and wondered, what does this mean for my family or my school?
The legislation itself is officially titled "an act relating to the establishment of an education savings account program." This bill is often called a "voucher," but it's important to understand what it actually provides. Rather than giving families a simple lump sum payment, SB2 creates Educational Savings Accounts (ESAs), similar to Health Savings Accounts (HSAs), for qualifying students, with specific rules about how the funds can be used.
While school choice advocates are excited by the bill, there has been strong opposition from various groups. Many parents, especially those with children with disabilities who have traditionally supported the public education model, feel their children's needs are not being met in traditional public schools and are reluctantly curious about whether they should pursue ESAs.
We will cover the controversy around this bill in future posts, but here we will focus on the details of the bill so that parents and educators can be well informed based on what we know now and what rules and regulations are still pending as the program develops.
What Is Senate Bill 2?
Senate Bill 2, signed into law by Governor Greg Abbott in 2025, creates a new program in Texas called an Education Savings Account (ESA). The idea is simple in theory but complex in practice: the state will set aside public funds in special accounts for eligible families, and those families can then use the money to pay for approved educational expenses such as private school tuition, tutoring, academic assessments, educational therapies, and transportation.
The law is framed around the goal of giving families more direct control over their child's education by allowing parents to use state tax dollars toward costs associated with educating their children outside of Texas's public school system.
The program is initially funded with $1 billion for the state's next two-year budget cycle and will begin in the 2026–2027 school year, with rules and the application process finalized by the Texas Comptroller by May 2026. While officially called an ESA program, SB 2 is often referred to as a "school choice" initiative or "school voucher" bill.
Who Is Eligible?
In Texas, the ESA program allows most school-age children to apply for and participate, including those already attending private schools. A child is eligible if they are a U.S. citizen or national, or lawfully admitted into the U.S. They must also be eligible to attend a school district or open-enrollment charter school, or enroll in a prekindergarten program.
Priority System
If demand exceeds funding, SB 2 includes a priority system for awarding ESAs:
First Priority: Siblings of participating children are prioritized first.
Second Priority: Students exiting public schools within each income group below are prioritized over those already in private schools.
Income-Based Tiers:
Students with disabilities from families earning at or below 500% of federal poverty guidelines (roughly $160,000 a year or less for a family of four)
Families with income at or below 200% of federal poverty guidelines (approximately $62,400 per year for a family of four)
Higher-income families with income above 200% but below 500% of federal poverty guidelines
Families with income above 500% of federal poverty guidelines (over roughly $160,000 per year for a family of four) are limited to no more than 20% of total program funding for each school year ($1 billion for the 26-27 school year)
Exclusions
Families cannot have their children simultaneously enrolled in both the ESA program and a public school. The program excludes students whose parents cannot prove their child is a U.S. citizen.
How Much Money Are We Talking About?
General Education Private School Students: Most families can expect to receive around $10,000 to $10,900 per year for each child. This amount equals 85% of what public schools receive through state and local funding for each student.
Students with Disabilities: These students receive the same base funding as other students, plus up to $30,000 in additional funding. However, the additional amount varies based on the specific special education services the child would receive in public school, according to their individualized education program (IEP). The full $30,000 is not guaranteed.
Homeschooled Students: Families who homeschool can receive up to $2,000 per year for approved educational expenses.
How You'll Access the Money
You won't receive cash directly. Instead, a state-approved organization will manage your family's ESA funds and pay approved vendors directly. These organizations will help you understand how to apply, manage your account, and provide a handbook listing allowed expenses and approved providers.
Money rolls over: Any unused funds in your child's account at the end of the year carry forward to the next year unless the account is closed.
What Can ESAs Be Used For?
Texas ESAs offer families flexibility in how they spend their education funds, but there are specific rules about what qualifies as an approved expense.
Educational Services and Programs
Tuition and fees for private schools, higher education providers, online educational courses, or programs that provide training for industry-based credentials approved by the Texas Education Agency
Tutoring and educational services provided by private tutors or teaching services
Public school services like classes or programs offered by school districts or charter schools (only if your child isn't counted in their enrollment for funding purposes)
Educational Materials and Supplies
Textbooks and instructional materials needed for your child's education
Required uniforms for private schools, higher education providers, or specific courses
Academic assessments and related fees
School meals (breakfast or lunch) provided by private schools during the school day
Support Services
Educational therapies provided by practitioners (only for services not covered by Medicaid, CHIP, or private insurance)
Transportation fees from approved providers to get your child to and from educational services
Technology devices required by education providers or prescribed by a physician to help with your child's education (limited to 10% of your annual ESA amount)
Important Restrictions
No cash withdrawals: You can't get cash from the account or receive direct payments
No family payments: You can't use ESA funds to pay relatives for educational services
No markup: Approved vendors can't charge participating families more than their standard rates or share any program money with families
Which Providers Can Accept ESA Funds?
Not all educational providers can automatically accept ESA funds. They must first go through a preapproval process with the Texas Comptroller's Office and meet specific requirements.
Who Can Apply to Accept ESA Funds
Private Schools: Must be accredited by an organization recognized by the Texas Private School Accreditation Commission or TEA, have operated continuously for at least two years, and administer annual assessments to students in grades 3-12.
Higher Education Providers: Must have nationally recognized postsecondary accreditation.
Public School Districts and Charter Schools: Can provide services if the child isn't counted in their enrollment for state funding purposes.
Private Tutors and Educational Therapists: Must be current or former educators from accredited schools, hold relevant licenses, or have teaching experience at higher education institutions. They must also pass background checks.
Online Programs and Industry Training: Programs must meet TEA approval requirements for industry-based credentials.
Transportation and Product Vendors: Must meet general compliance requirements.
Key Requirements for All Providers
Must be located in Texas or registered to do business in the state
All employees who interact with participating children must pass a screening for misconduct
Cannot charge ESA families more than their standard rates or share program money with families
Must agree to follow the disbursement schedules and return any improperly used funds
Participation is optional: No provider is required to accept ESA funds or participate in the program.
Religious autonomy: Private schools accepting ESA funds maintain their autonomy over curriculum, admissions, and employment practices, and are not required to follow state or federal disability accommodation laws.
What Should Families of Students with Disabilities Know?
Students with disabilities receive priority in the application process and additional funding, but there are important considerations:
Enhanced Funding and Priority
Students with disabilities from families earning at or below 500% of federal poverty guidelines receive the highest priority
They're eligible for base funding plus up to $30,000 additional, based on their IEP
The additional amount varies and isn't guaranteed to be the full $30,000
Important Considerations
Loss of IDEA protections: Once you leave public school, your child is no longer entitled to an IEP or protections under federal special education laws
Private school obligations: Private schools accepting ESA funds are not required to provide disability accommodations or accept all students
Section 504 plans: Students with only Section 504 plans (no IEP) would likely receive only the standard ESA amount, not the additional disability funding
Getting an IEP
Parents of children not enrolled in public school may request that a school district conduct an evaluation to determine eligibility for special education services and develop an IEP for ESA program purposes.
Who Oversees This Program?
The Texas Comptroller is in charge of the program and will work with up to five certified educational assistance organizations to help families apply, manage payments, and find approved service providers.
Accountability Measures
Families cannot withdraw or spend cash directly
Only pre-approved providers can receive funds
Accounts are audited annually, and 10% of applications will be randomly verified
Any suspected fraud will be referred to local authorities
Is This a Voucher?
Technically, no. The ESA program is not structured as a direct voucher. Instead of giving money to a private school on behalf of a student, the state deposits funds into a family-managed (but state-controlled) account, which can be used for a wider variety of educational services, not just tuition.
But for many families and educators, the practical effect is similar: public education dollars are being redirected to fund private education options.
What's Still Unclear?
Many operational details remain pending as the Texas Comptroller's Office has until May 15, 2026, to finalize rules:
Exact application process and deadlines for families
Identity of the certified educational assistance organizations that will help administer the program
Detailed submission requirements for providers wanting to accept ESA funds
Long-term funding beyond the initial $1 billion (budget experts project costs could reach $4.8 billion by 2030)
Full impact on public schools in terms of funding and enrollment
What Should You Do Now?
For Parents
Review your child's educational needs, especially if your child has disabilities. Gather important documents like IEPs and evaluations
Research potential schools and providers that might accept ESA funds, keeping in mind that private schools aren't required to accept all students
Understand the priority system and where your family might fall in the application process
Stay informed by regularly checking the Texas Comptroller's ESA program webpage for updates
For Private Schools and Other Providers
Confirm you meet eligibility requirements, including accreditation, operational history, and background check capabilities
Prepare for required assessments (nationally recognized exams for grades 3-12)
Review operational policies to ensure compliance with program rules about pricing and fund management
Prepare financial documentation, including third-party audits or financial reviews
Applications are expected to open before the 2026-27 school year, with all rules finalized by May 2026. For the most current information, check the Texas Comptroller's ESA program webpage regularly.
What's Next?
This is just the beginning of our coverage of Texas's new Education Savings Account program. In upcoming posts, we'll dive deeper into:
The controversy and criticism surrounding SB2, including concerns from public education advocates and responses from school choice supporters
Detailed compliance requirements for private schools looking to participate, including step-by-step guidance through the application process
Strategic considerations for families with special needs students, including how to evaluate whether leaving public school protections is right for your child
Financial planning with ESAs, including maximizing your education dollars and understanding tax implications
Success stories and challenges from other states with similar programs
We're also excited to announce that we'll be offering educational consulting services to help navigate this new landscape. However, since the Texas Comptroller's Office won't finalize program rules until May 2026, our consulting capacity will evolve as more details become available. We'll focus on what we can determine now while staying current with emerging regulations.
For Families: We'll provide personalized guidance on ESA eligibility, school selection strategies, and transition planning considerations, with specialized support for families of students with disabilities who are weighing the benefits and risks of leaving public school protections. As application processes become clearer, we'll offer step-by-step assistance through the enrollment process.
For Private Schools: We'll help you assess current readiness for ESA participation, understand preliminary compliance requirements, and prepare for the formal application process. Once the Comptroller releases specific submission requirements and operational guidelines, we'll provide comprehensive support through the approval process and ongoing compliance.
For Educational Service Providers: Whether you're a tutor, therapist, or educational technology company, we'll help you understand the framework for becoming an approved ESA vendor and begin positioning your services for this new market. Detailed guidance on vendor applications and requirements will expand as the Comptroller finalizes these processes.
Important note: While we can help with strategic planning and preparation based on current legislation, some specific guidance will only be possible once the Comptroller releases final rules and application procedures. We're committed to updating our services and recommendations as new information becomes available.
Have questions about how SB2 might affect your family or educational organization? Want to be notified when our consulting services launch and as new program details emerge? Contact us, follow us on Facebook, Instagram, or subscribe to our newsletter for the latest updates and insights.
The ESA program represents a significant shift in Texas education. Our goal is to help families and educators make informed decisions with accurate, up-to-date information as this program develops and details continue to emerge from state officials.
