In today's newsletter, we turn our attention to the impact of Education Savings Accounts on school finance and recapture.

Education Savings Account (ESA) Enrollment Update

ESA Applicants

First Day Applicants

The Texas Education Freedom Accounts (TEFA) program (also known as ESAs) opened to family applicants on February 4, and early interest has been significant. According to state officials, more than 42,000 families submitted applications on the first day of the enrollment window, signaling strong demand as the program launches statewide. The application period remains open through March 17, after which the state will begin prioritizing and awarding accounts based on criteria set in law.

Of the first day applicants, 80% planned to attend private schools and more than 19% planned on another option - like home school.

Regional Distribution of Approved Providers

TEFA Participating Schools and Education Services

As of February 6, the official list of participating TEFA participating schools and education services stands at 1,745 providers as of February 6. More schools are added as they are approved.

View the following link (in the red box below) to use its interactive feature to learn more about the participating schools, their service offerings, and their location.

Official List of Participating TEFA Schools and Education Services (interactive map)

Regional Distribution of Approved Schools

ESA participation is heavily concentrated in the state’s largest metro areas. The Houston and DFW regions alone account for more than 1,000 of the 1,745 approved schools to date, while many rural and regional areas — including the Panhandle, North Texas, and West Texas — have relatively few participating campuses.

This uneven geographic distribution means public schools across the state will feel the fiscal impact of ESA funding, even in regions where families have limited access to participating private schools, raising concerns about equity and return on investment for public education.

This Texas map depicts a statewide view of schools participating in the TEFA program that will accept TEFA funds for the 2026-27 school year. More schools and providers will be added regularly. Click map image above to see the most up to date image.

How ESAs Affect School Funding

New Policy Brief

As Texas begins implementing Education Savings Accounts (ESAs), questions remain about how the program will affect public school funding and local property taxpayers. To help members understand these dynamics, the Texas School Coalition has released a new policy brief examining how ESAs interact with the state’s school finance system, including recapture.

The Legislative Budget Board estimates that the ESA program will result in 25,500 students leaving public schools in fiscal year 2027, growing to 98,000 by 2030, with corresponding reductions in Foundation School Program funding.

Because ESAs reduce enrollment but leave property values unchanged, some districts may see an increase in taxable value per student, potentially pushing them into recapture or deeper into existing recapture obligations — even as they serve fewer students. Other districts may experience different effects depending on enrollment trends and local characteristics

The full policy brief provides additional detail and is available for members who want a deeper look at how ESA policy choices intersect with Texas school finance.

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