EFS funds in demand; ESA scholarships available; ECCA on the way
By Rick Musacchio
Diocese of Nashville
The 114th Tennessee General Assembly concluded its 2026 session on April 23 with legislation that will have an impact on Catholic schools across the state, including bills to expand Education Freedom Scholarships and Education Savings Accounts and plans to implement the Educational Choice for Children Act.
Education Freedom Scholarships (EFS)
Demand for the EFS, which began with 20,000 scholarships for the 2025-26 academic year, far exceeded the number of available scholarships. More than 43,000 people applied for the available scholarships in the first year.
In response, the legislature increased the number of available slots to 35,000 for the 2026-27 academic year. More than 53,000 applied during the December renewal period and the January new-application period.
The legislature also changed the original plan to reserve half of the available scholarships for children from households earning 300 percent of the free and reduced lunch level (about $170,000 for a family of four) to a tiered system that directs the scholarships to lower-income families.
The new law that included the additional scholarships also made several changes to the program. The law now mandates a sequence of categories of applicants for the distribution of scholarships. Available scholarships are awarded to the next category after the previous category is served. Order of application filing will be considered in fulfilling each level:
- Prior year scholarship recipients who maintain eligibility for the program (students can continue to receive scholarships through grade 12).
- Students with household income at or below 100 percent of the level that qualifies for free and reduced-price lunch. Currently a family of four earning about $60,000 would qualify.
- Students with household income at or below 300 percent of the level that qualifies for free and reduced-price lunch. Currently a family of four earning about $170,000 would qualify.
- Students who are currently enrolled in public schools.
- All other applicants.
Scholarship amounts, currently $7,295, are tied directly to the base amount of state and local funding per student calculated through the TISA formula. The actual base amount for next year has not been published, but an estimate of $7,530 has been used for budget purposes.
In the 2025-26 school year, 3,900 students in Catholic schools receive the scholarships.
Education Savings Account (ESA)
The legislature also changed the testing requirements of the ESA program that was established in 2019 but was delayed for implementation until 2022 by legal challenges.
That program originally required recipients to take the same TCAP assessment required of public-school students but now matches the testing requirements of the EFS program.
Students from households earning 200 percent of the Federal Free Lunch Level (about $62,000 for a family of four) and currently enrolled or eligible to enroll in public schools for the first time for the 2026-27 school year in Davidson, Hamilton, or Shelby counties can apply for the ESA program through May 26.
Currently, fewer than 5,000 ESA scholarships have been awarded, leaving approximately 10,000 available. Each scholarship will provide approximately $9,800 for tuition or other eligible expenses. Catholic school families in Davidson, Hamilton, or Shelby counties who are eligible are encouraged to immediately apply.
The Educational Choice for Children Act (ECCA)
The ECCA, implemented through the Education Freedom Tax Credit/federal tax-credit scholarship program that was part of the One Big Beautiful Bill passed last summer, is expected to begin in 2027.
The program provides a federal income-tax credit for donations to scholarship-granting organizations, which can provide scholarships for use at private or Catholic schools. Details of the program are still in development.
Gov. Bill Lee and the General Assembly have both expressed the intent to bring the program to Tennessee when it becomes available.