Texas Comptroller Blocks Private School Participation in Nation's Largest ESA Program

Private school enthusiasm over the new Texas Education Freedom Education Accounts (TEFA) program has turned to confusion and concern as hundreds of private schools have been kept off of the list of approved vendors by the state's chief financial officer. As reported on in the Houston Chronicle, "Nearly all schools accredited by Cognia, the largest private school accreditor in Texas, have been unable to submit applications in the month since the state began accepting them."

According to the Chronicle, "The hold-up appears to be linked to a request that acting comptroller Kelly Hancock made to the Attorney General Ken Paxton’s office on December 10, seeking a legal opinion on whether certain schools could be barred from the program for their alleged ties to the Chinese government or the Council on American-Islamic Relations."

The Texas CAPE has pushed back vigorously against the Comptroller's action and has submitted a brief to the state attorney general on behalf of the excluded private schools.

You can read the Houston Chronicle story here.

Virginia First State to Opt In to FSTC

In a press release, Virginia Governor Glenn Youngkin claimed pride of place for his state, declaring Virginia the first state in the nation to formally opt in to the Federal Scholarship Tax Credit (FSTC).

On January 1, 2026, Virginia formally elected to participate in the FSTC. “Virginia is proud to lead the nation once again as the first state to opt in to the Education Freedom Tax Credit,” said Governor Glenn Youngkin. “This decision expands school choice for families across the Commonwealth by opening access to federally tax credit-funded scholarships, empowering parents and helping ensure students, especially those with the greatest needs, can choose the learning environment that is right for them.

Meanwhile, in a January 5 press release, Iowa Governor Kim Reynolds announced that Iowa will opt in to the program as well. The FSTC goes live on January 1, 2027.

Iowa Receives Waiver from US Education Department

At a January 7 press conference in Denison, IA, Education Secretary Linda McMahon granted Iowa new flexibility in the use of its federal education funds.

From EdWeek:

The waiver approval appears to mark the first time since the 2015 passage of the Every Student Succeeds Act that the federal government has used its authority under that law to allow a state to consolidate funding.

But, in contrast with proposals the state put forward roughly a year ago, the new federal approval touches only 5% of Iowa’s overall allocation of federal education funds, the part that’s set aside for the state education agency. The bulk of federal dollars that flow to school districts each year—$900 million worth—will retain their current structure and spending and reporting requirements.

You can read the release from the Department of Education here.

Trump Administration Official Discusses Forecast for Special Ed Funding

From Chalkbeat, after its interview with key Education Department official Lindsey Burke:

[Burke said] deep budget cuts to schools aren’t currently on the table. She also said there’s “no reason to anticipate” funding freezes similar to the temporary withholding of $7 billion that threw school districts into chaos last summer.

The administration has no plans to cut federal funding for special education and may even increase spending, Burke said.

Burke said she didn’t want to preempt budget negotiations, but the administration plans to fund IDEA at “the current levels that are out there now, and potentially additional support moving forward.” She strongly disavowed the idea of cuts: “There is no world in which anybody’s talking about any reductions in support for IDEA.”

Read it all here.