Gov. Abbott signs $1B education savings account bill; program to launch in 2026

Breaking down the bill

Funding for the ESA program is capped at $1 billion for the 2026-27 biennium. The Legislative Budget Board estimated demand for the program would reach $4.8 billion by 2030, although it will be up to state lawmakers to raise or cut funding in future years.

If applications for the program outpace available funding, SB 2 will first prioritize students with disabilities whose annual household incomes are at or below 500% of the federal poverty line—about $160,000 for a family of four, according to the U.S. Department of Health and Human Services. Next in line are families with incomes at or below 200% of the FPL, which is about $64,000 for a family of four. Families with incomes between 200-500% of federal poverty guidelines will be in the third priority tier, followed by all families, regardless of income.

Under the ESA program, private schools will not be required to accept all students or comply with federal laws that ensure public schools provide services tailored to students’ needs, lawmakers said.

Any Texas school-age children who are U.S. citizens or lawful residents will be eligible to apply for an ESA. If a child is accepted into the program, any of their eligible siblings who applied during the same application cycle must also be accepted, according to a breakdown of the bill.

Private schools must be accredited and operate in Texas for at least two years before they can accept ESA students, bill author Sen. Brandon Creighton, R-Conroe, said before senators approved House amendments to SB 2 on April 24. Third through 12th grade students participating in the ESA program will be required to take a nationally norm-referenced exam or the State of Texas Assessments of Academic Readiness each year.

More context

Some opponents of education savings accounts have expressed concerns that the program will divert funding from public school districts facing financial challenges and unfairly benefit wealthy families.

“I have a message to the working family communities in Texas: vouchers are a scam intended to benefit rich people,” Rep. Ana-María Rodríguez Ramos, D-Richardson, said during a marathon House session April 16. “These private schools are not required to accept your children. You give up the rights you had in public schools. The full cost of tuition, transportation and textbooks will almost never be covered fully by the voucher.”

During the 2023-24 school year, the average cost of Texas private school tuition was $10,965 for kindergarten-eighth grade students and $14,986 for high school students, according to the Texas Private Schools Association.

Rep. Brad Buckley, R-Salado, who sponsored SB 2 in the House, told his colleagues he did not think public schools in other states had been harmed by ESAs or related programs.

“When you are providing services and you're meeting the needs of children, we know that [many] parents will stay in their public school,” Buckley said April 16. “I do know that this opportunity that we will provide will not hurt our public schools. It'll just create another lane or another option for parents.”

Legislative budget analysts wrote that public schools “may experience a decrease in... funding as a result of the bill due to students leaving public schools to participate in the ESA program.”

Proponents of SB 2 have said the program will expand educational options for families who may not want to send their children to a public school.

“The single parent working two jobs, unable to move their child to a school where they feel safe—they’ll have an opportunity to not be trapped by ZIP code,” Creighton said April 24. “Passing this bill sends a message to all of Texas. It tells the next generation of Texas leaders: your path should fit your purpose, your path should fit what’s best for you and your family, and your ambition will always be greater than any system or any institution.”

In a May 3 statement, Kendall Scudder, chair of the Texas Democratic Party, called SB 2 “a new entitlement program for the wealthy.”

“This bill is only best for the richest people in the state, and rural Texas especially will get the shaft,” Scudder said. “To top it all off, Abbott’s school shut-downs are in full-swing with no end in sight. Texas Democrats will keep fighting for public schools and make sure voters don’t forget this in 2026.”

How we got here

During previous legislative sessions, some Republicans from rural communities joined House Democrats to repeatedly shoot down ESA bills. Following the 2023 session, the lower chamber shifted further to the right when several pro-ESA Republicans ousted incumbents and two seats previously held by Democrats flipped to Republicans.

SB 2 was the first bill state senators passed this year, after Abbott deemed education savings accounts an emergency legislative priority.

“The Bible says, on the seventh day, he rested. We passed school choice in the Senate six times—now, we rest,” Patrick said during a March 25 news conference about education savings accounts.

House lawmakers debated SB 2 for over 10 hours on April 16-17 before approving the legislation with an 85-63 vote. The Senate signed off on House changes to the bill on April 24.