How to Legally Use Education Savings Accounts - United States

What is an ESA under Senate Bill 2, and how does it affect civil and disability rights?

An Education Savings Account (ESA) under a state Senate Bill 2 program is a government-funded account that parents can use to pay for private schooling and related educational expenses instead of sending their child to a local public school. By accepting ESA funds and withdrawing from the public system, many families also change - and often reduce - their child's enforceable rights under federal special education law.

Core concept: public money, private choice, different rights

• Source of funds: ESA money usually comes from state education funds that would otherwise partially support your child's public school placement.
• Control of funds: Parents get access through a state-managed account or pre-paid card, and can direct spending to approved education vendors (schools, tutors, therapists, curricula, etc.).
• Program authority: A state agency (often the state treasurer or department of education) administers the ESA under the specific Senate Bill that created it (e.g., "Senate Bill 2").
• Key tradeoff: You gain flexibility to design your child's education, but you may give up the robust IDEA rights that attach to enrollment in (or placement by) a public school district.

Relevant federal laws that still matter

• Individuals with Disabilities Education Act (IDEA) - 20 U.S.C. § 1400 et seq.
• Section 504 of the Rehabilitation Act - 29 U.S.C. § 794
• Americans with Disabilities Act (ADA) - 42 U.S.C. § 12101 et seq.
• Family Educational Rights and Privacy Act (FERPA) - 20 U.S.C. § 1232g (for records, mostly in public settings)

ESA programs sit on top of these federal laws. They cannot erase federal anti-discrimination protections, but they can change who is legally responsible (public district vs private school) and what remedies you can seek.

Who is eligible for Senate Bill 2 ESA funds in the 2025-2026 school year?

Eligibility for ESA funds in 2025-2026 will depend on your specific state's version of Senate Bill 2, but most ESA laws limit participation to school-age children who are state residents and fit certain categories like prior public enrollment, income thresholds, or disability status. You need to review your state's ESA regulations and application materials to confirm exact criteria and deadlines.

Typical ESA eligibility elements

While wording varies by state, most ESA programs include some combination of the following:

• Residency: At least one parent and the child must be legal residents of the state that passed Senate Bill 2. Proof usually includes a driver's license, lease, utility bill, or tax return.
• Age/grade: Child must be eligible for K-12 enrollment. Some programs cover pre-K for students with disabilities or extend through age 21 for certain disability categories.
• Prior public school enrollment: Many states require the child to have been enrolled in a public school for a set period (for example, 1 full semester or the prior school year) before qualifying.
• Income caps (sometimes): Some ESA laws prioritize or limit participation to families below a specified household income (for example, 200% or 300% of the federal poverty level).
• Disability or other special status: Programs may give priority or higher funding to students with an existing IEP or 504 plan, foster youth, children of active-duty military, or students zoned to "low-performing" schools.

Key questions to ask your state ESA authority for 2025-2026

1. Does my child need to be enrolled in a public school for 2024-2025 to qualify for ESA funds in 2025-2026?
2. Is the program universal by 2025-2026, or limited to specific groups (low income, disability, military, etc.)?
3. Is there a lottery or cap on the number of students who can receive ESA funds each year?
4. What is the annual per-student amount for 2025-2026, and is there a separate funding tier for students with disabilities?
5. What are the exact application deadlines and required documents?

Common eligibility pitfalls

• Withdrawing from public school too early, before meeting a "prior enrollment" requirement.
• Missing the application window (many states close ESA applications months before the school year begins).
• Assuming that having an IEP automatically guarantees ESA approval, when some programs still apply income or enrollment caps.
• Not realizing that once you opt in, exiting the ESA mid-year may be difficult or may not restore your child's prior public placement or IEP immediately.

What expenses can ESA funds legally cover (tuition, uniforms, therapies)?

ESA programs usually allow spending on a defined list of "educational expenses," such as private school tuition, fees, curricula, tutoring, and certain therapies, but they forbid non-educational or personal costs. Your spending must match your state's approved categories or you risk account suspension, repayment demands, or removal from the program.

Typical ESA-eligible vs non-eligible expenses

How to confirm what is allowed under your ESA

1. Review the ESA statute and rules: Your state's Senate Bill 2 text and implementing regulations will define "qualified expenses."
2. Check the approved vendor list: Many states publish a list of approved schools, therapists, and providers, or require providers to register before you can spend ESA funds with them.
3. Ask before you buy: When in doubt, email or call the ESA program office with a written description of the expense and request confirmation that it is eligible.
4. Keep detailed receipts: Retain invoices and proof of payment for every ESA purchase. States often conduct audits and can demand repayment if they find misuse.

Legal risks for misuse of ESA funds

• Repayment of misused funds to the state, sometimes with penalties or interest.
• Immediate suspension or termination of your child's ESA account.
• Referral for fraud investigation in extreme or intentional misuse cases.
• Jeopardizing ESA eligibility for siblings or future years if the state treats your household as a single participating unit.

How does accepting ESA funds affect my child's special education rights under IDEA?

Accepting ESA funds and placing your child in a private school of your choice usually means your child no longer has a right to a free appropriate public education (FAPE) from the public school district under IDEA. Instead, your child may receive limited "equitable services" and will rely mainly on the private school's policies and any services you purchase with ESA funds.

IDEA protections tied to public school placement

Under IDEA, when your child is enrolled in a public school or placed in a private school by the public district, your child has:

• FAPE entitlement: The district must provide a free appropriate public education tailored to your child's unique needs.
• Individualized Education Program (IEP): A binding written plan with goals, services, accommodations, and placement.
• Related services: Speech therapy, occupational therapy, physical therapy, counseling, and others as needed for FAPE.
• Least restrictive environment (LRE): A right to be educated with non-disabled peers as much as appropriate.
• Due process and complaints: The right to challenge the district's decisions through mediation, due process hearings, and complaints to the state education agency or federal Office for Civil Rights (OCR).

What usually changes when you take ESA funds

• End of FAPE duty: Once you withdraw your child and accept ESA funds for a private placement you choose, the public district usually no longer has to provide FAPE or implement the IEP.
• IEP becomes non-binding: The existing IEP may guide your planning, but the private school does not have to follow it unless it voluntarily agrees in a contract with you.
• Limited "equitable services": Districts must spend a small proportion of IDEA funds on services for parentally-placed private school students, but these services are limited, not individual entitlements, and may not match your child's full IEP.
• Different dispute options: You typically cannot file an IDEA due process complaint to force the private school to provide specific services because IDEA obligations attach to the public agency, not your chosen private school.

Where the waiver of federal rights comes in

Many ESA programs require parents to sign a document acknowledging that by accepting ESA funds, they:

• Understand that the child will not receive FAPE from the public school district while participating.
• Waive or release claims against the district for not providing IDEA services during ESA participation.
• Accept that any services needed beyond what ESA funds cover are the family's financial responsibility.

This waiver cannot eliminate core federal anti-discrimination rights, but it can waive IDEA-based claims about FAPE and IEP implementation for the period your child is in the ESA program.

What specific IDEA and disability rights might I give up by using ESA funds?

By opting into an ESA and moving your child to a private school you select, you typically give up your child's right to an enforceable IEP, to comprehensive related services at no cost, and to IDEA due process remedies against the district. You also often lose procedural protections like "stay put" that would otherwise keep services in place during disputes.

Key rights often limited or waived

• Right to FAPE from the district: The district's duty to design and deliver an appropriate special education program at no cost is paused or ended while your child is in the ESA program.
• Binding IEP enforcement: You usually cannot force a private school to provide the services that were in your public school IEP through IDEA proceedings.
• Stay-put protection: Under IDEA, a child generally stays in their current placement while disputes are resolved. With ESA/private placement, there is usually no stay-put right connected to the private school placement.
• Comprehensive related services: The district is no longer required to pay for all related services needed for FAPE. ESA funds must cover what the private school does not provide, up to the account balance.
• Public school transportation rights: Transportation that might have been part of FAPE is no longer guaranteed. Some ESA programs allow spending ESA funds on transportation, but that becomes your responsibility.

Rights that may be reduced but not fully waived

• Child find: Public districts still have a duty to identify and locate children with disabilities residing in their boundaries, including private school students, but they are not obligated to provide full IEP services to them.
• Participation in evaluations: You can usually still request evaluations through the public district, but the outcome may be used mainly for determining eligibility for limited services or for future re-enrollment, not for an active IEP in the private setting.
• Equitable services consultation: Private schools and parent representatives must be consulted on how limited IDEA funds for private students will be used, but individual students do not have a right to a set amount of these services.

How ESA contracts and waivers work in practice

1. The ESA application or contract includes a clause explaining that ESA participation is voluntary and that by opting in, you relinquish certain public school rights.
2. You sign an acknowledgment that you understand the change in legal status and educational responsibility.
3. Courts often treat that signed acknowledgment as evidence that you knew you were leaving the IDEA FAPE framework for a parent-selected private option.

Which rights do my child and I keep after moving to a private ESA-funded school?

Even if you accept ESA funds and waive some IDEA rights, your child still keeps federal protections against disability discrimination under Section 504 and the ADA, though their scope and enforcement mechanisms differ from IDEA. In some cases, your child may also receive limited services funded by the public district through IDEA's equitable services provisions.

Continuing federal protections

• Section 504 (Rehabilitation Act):
  • Applies to entities that receive federal financial assistance, including many private schools.
  • Prohibits discrimination based on disability and may require reasonable accommodations and access to programs.
• ADA (Americans with Disabilities Act):
  • Title II covers public entities, including public schools and state ESA agencies.
  • Title III covers private schools that are "places of public accommodation," requiring reasonable modifications unless doing so would fundamentally alter the program.
• Anti-retaliation: Schools and public agencies cannot retaliate against you or your child for asserting disability rights or filing complaints.
• Access to complaint processes: You can still file complaints with the U.S. Department of Education's Office for Civil Rights (OCR) or the U.S. Department of Justice (DOJ) for discrimination based on disability.

Limited IDEA-based services that may continue

• The district may offer some special education or related services to private school students with disabilities using a portion of its IDEA funds.
• These services are provided according to a "services plan," not a full IEP, and they are limited by the amount of IDEA funding set aside for all private school students in the district.
• You do not have an individual right to any particular service or amount of service; it is a group-based, discretionary allocation.

Practical enforcement differences

• Under IDEA: You can demand specific services needed for FAPE and enforce them through due process hearings and state complaints.
• Under 504/ADA: You can demand non-discriminatory access and reasonable accommodations, but you cannot usually demand specific educational methodologies or a particular level of educational benefit.
• In private schools: Some may be exempt from certain ADA or 504 duties (for example, religious schools may be exempt from parts of the ADA), so you must check how federal law applies to your chosen school.

How do I apply for ESA funds and stay in legal compliance?

To apply for ESA funding, you typically complete an online application with your state ESA authority, submit documentation of eligibility, and then agree to program terms that include spending rules and reporting duties. To stay compliant, you must use funds only for approved expenses, keep records, and respond promptly to any audits or information requests.

Typical ESA application steps

1. Confirm program details: Visit your state's ESA or Senate Bill 2 program website. Download the latest parent handbook and rule summaries.
2. Gather documents: Birth certificate, proof of residency, prior school records, IEP or 504 plan (if using disability-based eligibility), and any income documentation if required.
3. Create an account: Many states use online portals where you set up a parent account to complete applications and track funds.
4. Complete application: Fill in student information, select intended educational setting for 2025-2026, and upload all documentation.
5. Review and sign agreements: Carefully read any waivers of IDEA rights, obligations to notify the public school of withdrawal, and fraud/misuse consequences before you click "accept."
6. Wait for approval: States often process applications within 30-90 days and then load funds into an ESA account or card shortly before the school year starts.

Compliance and recordkeeping

• Use approved vendors and expenses only: Follow the spending categories strictly and verify new vendors in advance.
• Keep receipts for 5-7 years: Store digital copies of all invoices and payment confirmations in case of audit.
• Track services vs plan: Maintain a simple log of what services your child actually receives (hours of tutoring, therapy sessions, etc.) and how they align with your child's needs.
• Respond to audits: If the state ESA office asks questions or conducts a review, respond fully and by the stated deadline to avoid suspension.
• Annual renewal: Many ESA programs require you to re-certify eligibility or re-apply each year; mark those deadlines on your calendar.

What are common legal and practical mistakes parents make with ESA programs?

Parents often underestimate the loss of IDEA protections, overestimate what ESA funds will actually cover, and assume private schools must provide the same services as public schools. Misunderstanding these issues can leave students with disabilities under-served and families with unexpected costs or legal problems.

Frequent mistakes to avoid

• Not comparing benefits: Leaving an IEP that delivers substantial services for an ESA amount that cannot realistically purchase equivalent support in the private market.
• Assuming private schools must accept or follow IEPs: Many private schools have no legal duty to implement IEPs or provide specific therapies.
• Ignoring IDEA waivers: Signing ESA agreements without reading or understanding the impact on FAPE and due process rights.
• Misusing funds: Using the ESA account for unapproved items (like general family electronics or travel) and facing repayment or program removal.
• Failing to plan for long-term costs: Tuition and therapy costs may increase faster than ESA funding, leaving gaps in later years.
• Assuming you can easily "go back": Returning to public school can require new evaluations, new IEP development, and may not guarantee the same placement or services as before.

Strategic questions to ask before opting in

• How much does my child currently receive in services under the IEP (hours of therapy, specialized instruction, support staff), and what would it cost to buy those privately?
• What will ESA funds actually cover at my chosen private school, after tuition and fees are paid?
• Is the private school experienced with my child's specific disability and needs, or will I be assembling a patchwork of outside providers?
• What is my backup plan if the ESA program changes politically or financially in future years?

When should I hire a lawyer or special education expert about ESA and IDEA rights?

You should strongly consider hiring a lawyer or experienced special education advocate when the decision to accept ESA funds could significantly change your child's access to needed services, or when you do not fully understand the rights you are being asked to waive. Legal guidance is especially valuable if your child has complex needs, extensive IEP services, or a history of conflict with the school district.

Situations where professional help is smart

• High-need students: Your child needs intensive services (for example, daily therapies, a one-to-one aide, specialized programs) that would be very expensive to replicate privately.
• Disputed IEP or placement: You are tempted to use ESA as an "escape hatch" from a difficult district situation, but there are unresolved disputes or potential compensatory education claims.
• Unclear waiver language: The ESA contract uses dense legal language about waiving rights, releasing claims, or limiting liability, and you are not sure what it covers.
• Discrimination concerns in private school: A private school hesitates to accept your child, imposes different rules based on disability, or proposes exclusionary practices.
• Audit or investigation: The ESA authority questions your spending, threatens to terminate your account, or demands repayment.

What a lawyer or advocate can do for you

• Review your child's current IEP and explain the practical value of those services in dollar terms.
• Analyze the ESA statute and contract in your state, flagging specific rights you would waive and risks you face.
• Help negotiate written agreements with private schools or providers (for example, promising certain supports or following parts of the IEP).
• Advise you on preserving future claims (for instance, by documenting current deficits and services before exiting public school).
• Represent you in IDEA, 504, or ADA complaints if issues arise either in the public district or the private school.

What are the next steps if I am considering Senate Bill 2 ESA funds for 2025-2026?

Your next steps are to gather clear information about your child's current rights and services, learn the exact terms of your state's ESA program under Senate Bill 2, and run a side-by-side comparison of public versus ESA-funded options. From there, you can make a planned, rather than reactive, choice about your child's education and disability rights.

Step-by-step action plan

1. Request your child's records: Get copies of the latest IEP or 504 plan, evaluations, progress reports, and service logs from your current public school.
2. List current services in dollar terms: With or without a professional's help, estimate what it would cost to purchase each IEP service privately in your area.
3. Study your state's ESA materials: Download Senate Bill 2, implementing regulations, the ESA parent handbook, and any FAQs from your state education or treasurer's website.
4. Confirm specifics with officials: Call or email the ESA program office with targeted questions about eligibility for 2025-2026, funding amounts, and allowable expenses, and save their written responses.
5. Visit potential private schools: Ask detailed questions about their experience with your child's disability, willingness to accept ESA funds, and what concrete supports they will provide.
6. Run a side-by-side comparison: Create a simple table listing "Public IEP option" on one side and "ESA/private option" on the other, including services, out-of-pocket costs, transportation, and rights/enforcement mechanisms.
7. Consult a professional if needed: If the tradeoffs are substantial or unclear, schedule a consultation with a special education lawyer or advocate in your state to review your options.
8. Decide and calendar deadlines: Once you choose a path, mark ESA application deadlines or public school enrollment/IEP meeting dates so no window is missed for the 2025-2026 year.

A careful, rights-aware approach lets you use ESA funds, if you choose to, as a tool to enhance your child's education rather than accidentally limiting their civil and disability protections.