Education Savings Accounts Explained

The most important investment we can make is investing in our children’s future. In 2019 the Tennessee General Assembly did  just that by passing an expanded Education Savings Accounts (ESA) program for low income children.

This program will bring life-changing opportunities to thousands of families across the Volunteer State. Read more below to learn about ESAs and about Gov. Lee’s specific plan.

For downloadable PDFs: ESA One-Pager,  Fast Facts about Tennessee’s ESA programEducation Savings Accounts FAQ; How ESA Finances Work; ESA Myths vs. Facts

Where will ESAs be available?
Students must live in either Shelby County (Memphis),

Or in Davidson County (Nashville).

When will the program start?
The law requires no later than the 2021-22 school year, but we expect implementation to begin in 2020-21.

Who’s eligible?
The student’s family income must be within 200% of eligibility for the federal Free Lunch Program ($66,950 for a family of 4).

Parents must show ID and proof of income using the same application materials as required for federal direct certification programs like SNAP and TANF.

How many ESAs will be available?
There will be 5,000 ESAs available in Year 1. The cap will increase by 2,500 per year until a max of 15,000.

If the caps are reached in a given year, priority will be given to children from the lowest-income families and those zoned for the lowest performing schools.

How much for each ESA?
Roughly $7,100 per child, per year. Schools do not have to accept the ESA as full tuition, but schools can accept the ESA and still award additional financial aid if necessary. Financial aid award decisions are made by participating schools.

Can ESAs only be used for tuition?
No – parents can use ESA funds beyond tuition on a range of other education-related expenses like tutoring, instructional materials, and roll over for later use (even college). ESA resources can only be spent at providers approved by the Tennessee Department of Education.

What about testing?
Students in grades 3-11 must take the TN Ready English and Math assessments. Only students in the ESA will have to take TN Ready – other children at the independent schools will not be required to participate in TN Ready.

There are still additional rules that will need to be developed by the Tennessee Department of Education, which will be responsible for administering the program. We’ll be sure to keep you apprised of any updates as they come out.