RULES
OF
STATE BOARD OF EDUCATION
CHAPTER 0520-01-16
EDUCATION SAVINGS ACCOUNTS
TABLE OF CONTENTS

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Purpose
Definitions
Application and Admission
Agreement and Funds Transfer
Use of Funds
Term of the ESA

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Monitoring and Compliance
Participating Schools
Providers and Postsecondary
Institutions

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Return to Local Education Agency
Appeal Procedures
Conflict of Interest

0520-01-16-.01 PURPOSE.
The purpose of these rules is to effectuate the Tennessee Education Savings Account Program as required
by T.C.A. § 49-6-2601, et sq. Pursuant to T.C.A. § 49-6-2605, The Department may contract with a nonprofit organization for some or all portions of the Program. If the Department contracts for some or all
portions of the Program, any reference to the Department herein may be assigned to the contractor.
Authority: T.C.A. §§ 49-1-302, 49-6-2601, et seq. Administrative History:

0520-01-16-.02 DEFINITIONS.
(1)

“Account Holder” means a parent as defined in paragraph (13) of this section or a student who has
attained the age of majority who is approved by the Department to participate in the Program and
signs the ESA agreement, is the Account Holder for the ESA funds, and is responsible for
complying with all of the requirements of the ESA Program.

(2)

“Agreement” means a document signed by a parent of an eligible student or an eligible student who
has attained the age of majority and a designee of the Department, which qualifies the parent or
student who has attained the age of majority to participate in the Program.

(3)

“Computer hardware or technological devices” means computer hardware or technological devices
approved by the Department that is used for the student's educational needs. Computer hardware
and technological devices shall be purchased at fair market value through a participating school,
private school, or provider.

(4)

“Criminal background check” at a minimum shall include, but not be limited to, a check of the
following: Tennessee’s Sex Offender Registry and the Abuse Registry of the Tennessee
Department of Health. All providers as defined in paragraph (21) of this section and employers of
providers shall maintain documentation that any persons providing services to participating
students have undergone a fingerprint based criminal history records check conducted by the
Tennessee Bureau of Investigation (TBI) and forwarded by the TBI to the Federal Bureau of
Investigation (FBI) for processing pursuant to the National Child Protection Act. All participating
schools shall maintain documentation that all persons working on school grounds when students
are present and/or providing services to students have undergone a fingerprint based criminal

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history records check conducted by the TBI and forwarded by the TBI to the FBI for processing
pursuant to the National Child Protection Act. Individual contractors not employed by an
organization shall fulfill the background check requirements by completing a fingerprint-based
criminal history records check conducted by the FBI.
(5)

“Department” means the Tennessee Department of Education

(6)

“Early postsecondary opportunity courses” means a course and/or exam recognized by the
Department that give students a chance to obtain postsecondary credit while still in high school.

(7)

“Educational therapy services” means individualized services designed to develop or improve
academic performance through instructional and therapeutic techniques, and provided by
therapists that meet the requirements set by the Department.

(8)

“Eligible postsecondary institution” means an institution operated by the board of trustees of the
University of Tennessee; the board of regents of the state university and community college
system; or a local governing board of trustees of a state university in this state; or a private
postsecondary institution accredited by an accrediting organization approved by the State Board of
Education.

(9)

“Eligible private school” means a private school, as defined by § 49-6-3001(c)(3)(A)(iii), that
meets the requirements established by the Department and the State Board of Education for a
Category I, II, or III private school, and applies to the Department to participate in the Program.

(10)

“Eligible student” means a Tennessee resident in grades kindergarten through twelve (K-12) who:
(a)

Meets one (1) of the following enrollment requirements:
1.

Was previously enrolled in and attended a Tennessee public school for the one (1)
full school year immediately preceding the school year for which the student
receives an ESA;

2.

Is eligible for the first time to enroll in a Tennessee school; or

3.

Received an ESA in the previous school year;

(b)

Is zoned to attend a school in Shelby County Schools, Metro Nashville Public Schools, or
is zoned to attend a school that was in the Achievement School District on May 24, 2019;
and

(c)

Is a member of a household with an annual income for the previous year that does not
exceed twice the federal income eligibility guidelines for free lunch..

(11)

“ESA” mean a Tennessee Education Savings Account.

(12)

“Fee for service transportation provider” means a commercial transportation provider including a
taxi or bus service. It does not include private transportation by a family member, parent or
participating student in accordance with the conflict of interest provisions set forth in these rules.

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(13)

“IEP” means an Individualized Education Program developed by a public school pursuant to the
Individuals with Disabilities Education Act at 20 U.S.C. §1400, et seq.

(14)

“Legacy student” means a participating student who graduates from high school or exits the
Program by reaching twenty-two (22) years of age; and
(a)

Has funds remaining in the student's ESA; and

(b)

Has an open ESA.

(15)

"Local Education Agency (LEA)," "school system," "public school system," "local school system,"
"school district," or "local school district" means any county school system, city school system,
special school district, unified school system, metropolitan school system or any other local public
school system or school district created or authorized by the Tennessee general assembly.

(16)

“Parent” means the parent, legal guardian, person who has custody of the child, or person with
caregiving authority for the child under T.C.A. § 49-6-3001.

(17)

“Participating school” means a private school, as defined by § 49-6-3001(c)(3)(A)(iii), that meets
the requirements established by the Department and the State Board of Education for a Category
I, II, or III private school, and that seeks to enroll eligible students.

(18)

“Participating student” means an eligible student who is seventeen (17) years of age of younger
and whose parent is participating in the ESA Program or an eligible student who has attained the
age of majority and is participating in the ESA Program.

(19)

“Private or non-profit financial management organization” means an institution selected by the
Department to administer the education savings accounts.

(20)

“Program” means the Education Savings Account (ESA) Program created in T.C.A. § 49-6-2602,
et seq.

(21)

“Provider” means an individual or business that provides educational services and is approved by
the Department, including tutors, tutoring services, educational therapy services and educational
therapists.

(22)

“State Board” means the Tennessee State Board of Education.

(23)

“Summer education programs and specialized afterschool education programs” means an
educational program approved by the Department that is operated outside of the regular school
day or school year, which do not include afterschool childcare.

(24)

“Technology fees” means fees charged by a participating school, private school, or provider for the
use of technology or technological devices.

(25)

“Tuition or fees” means tuition or fees of an instructional nature at a participating school, or an
eligible postsecondary institution. Fees do not include: room and board, food, or consumable school
supplies.
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(26)

“Tutoring services” means educational services provided by a tutor who is approved by the
Department.

(27)

“Qualified expenses” means the expenses outlined in T.C.A. § 49-6-2603(a)(4) and this rule.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.03 APPLICATION AND ADMISSION.
(1)

To apply to receive an ESA the parent of an eligible student, or an eligible student who has attained
the age of majority, must submit a completed application through the Department’s website or
through the Department’s office by the deadline set by the Department.

(2)

As part of the Program application the parent of an eligible student, or an eligible student who has
attained the age of majority, must provide verification that the student is a member of a household
with an annual income for the previous year that does not exceed twice the federal income eligibility
guidelines for free lunch.
(a)

(3)

Income verification shall be established through:
1.

A federal income tax return from the previous year; or

2.

Proof of eligibility for enrollment in the state’s Temporary Assistance for Needy
Families (TANF) program.

(b)

The Department may require additional information to verify household income.

(c)

Students identified as “at-risk” as defined in T.C.A. § 49-3-307(a)(6) shall automatically
satisfy the income requirements for eligibility.

If, in the application period for a school year, the number of Program applications received by the
Department from eligible students exceeds the maximum number of students that may participate
in the Program for that school year pursuant to T.C.A. § 49-6-2604(c), then the Department shall
conduct an enrollment lottery process. Students who participated in the Program in the previous
school year shall be reenrolled in the program if renewal criteria is met and shall be excluded from
entering into an enrollment lottery. If an enrollment lottery is conducted, then enrollment priority
must be granted in the following order:
(a)

Eligible students who have a sibling participating in the Program;

(b)

Eligible students zoned to attend a priority school as defined by the state's accountability
system pursuant to § 49-1-602, at the time of the enrollment lottery;

(c)

Eligible students eligible for direct certification under 42 U.S.C. § 1758(b)(4); and

(d)

All other eligible students.

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(4)

Once a completed application has been approved by the Department, the parent of an eligible
student or an eligible student who has attained the age of majority shall complete the enrollment
procedures set by the Department to become enrolled in the Program, including execution of an
Agreement to participate in the Program.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.04 AGREEMENT AND FUNDS TRANSFER.
(1)

Upon notification by the Department that an ESA may be established, a parent of an eligible student
or an eligible student who has attained the age of majority shall sign an Agreement to:
(a)

Ensure the provision of an education for the participating student that satisfies the
compulsory school attendance requirement provided in T.C.A. § 49-6-3001(c)(1) through
enrollment in a State Board approved Category I, II, or III private school;

(b)

Comply with the requirement that participating students in grades three through eleven (311) participate in the Tennessee comprehensive assessment program (TCAP) tests for
math and English language arts each year of enrollment in the Program;

(c)

Not enroll the participating student in a public school during the time the student is enrolled
in the ESA Program;

(d)

Not enroll the participating student in the Individualized Education Account (IEA) Program
during the time the student is enrolled in the ESA Program;

(e)

Release the LEA in which the student resides and the school for which the student is zoned
to attend from all obligations to educate the student during the time the student is enrolled
in the ESA Program. Participation in the Program has the same effect as parental refusal
to consent to the receipt of services under the Individuals with Disabilities Education Act at
20 U.S.C. §1414; and

(f)

Comply with the acceptable uses of ESA funds and the responsibilities of the parent of an
eligible student or eligible student who has attained the age of majority.

(2)

The Agreement and any additional information required by the Department, shall be submitted and
received by the Department by the deadline set by the Department before the first ESA payment is
disbursed.

(3)

The Agreement shall be signed by the parent of an eligible student or by the eligible student who
has attained the age of majority and a designee of the Department to be effective.

(4)

The Department shall establish procedures to effectuate the ESA funds transfer process and dates
on which each ESA payment shall be disbursed.

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(5)

Prior to the first disbursement of funds the Account Holder must provide proof of enrollment in a
Category I, II, or III private school. No funds shall be disbursed to an ESA account without proof of
enrollment in a Category I, II, or III private school.

(6)

The maximum annual amount to which a participating student is entitled under the Program shall
be equal to the amount representing the per pupil state and local funds generated and required
through the basic education program (BEP) for the LEA in which the participating student resides,
or the statewide per pupil average of required state and local BEP funds, whichever amount is less.

(7)

If a participating student enrolls in the Program for less than an entire school year, the ESA amount
for that school year shall be reduced on a prorated basis.

(8)

After the initial and each subsequent payment to the ESA, the Account Holder shall submit expense
reports and receipts for all ESA funds expended in accordance with the procedures set by the
Department before the next ESA payment is disbursed.

(9)

In accordance with the procedures set by the Department, the Department may remove any
Account Holder from eligibility for an ESA if the Account Holder fails to comply with the terms of the
ESA agreement or applicable laws, rules or procedures, or misuses funds. The Account Holder
may appeal the Department’s decision pursuant to the appeal procedures outlined in this rule.

(10)

If the Department determines that ESA funds have been misspent, the Department shall notify the
Account Holder, and the Account Holder shall repay the misspent amount in the manner and within
the timeframe set by the Department. Additionally, the Department is authorized to freeze or
withdraw funding directly from the student’s ESA for reasons including, but not limited to, fraud,
misuse of funds, Account Holder failure to comply with the terms of the state laws, rules, procedures
or the Agreement, if the student returns to the LEA, or if funds were deposited into the account in
error. An Account Holder may appeal the Department’s decision pursuant to the appeal procedures
outlined in this rule.

Authority: T.C.A. §§ 49-1-302 and 49-10-1401 et seq. Administrative History:

0520-01-16-.05 USE OF FUNDS.
(1)

Account Holders shall agree to use the funds deposited in the ESA for any, or any combination of,
the following expenses:
(a)

Tuition or fees at a participating school. Any tuition or fees charged by a participating school
that exceeds the ESA amount shall be the responsibility of the Account Holder;

(b)

Textbooks required by a participating school;

(c)

Tutoring services provided by an individual tutor, including a licensed Tennessee educator
who meets the requirements set by the Department, or a tutoring facility accredited by one
(1) of the following: any accreditation division of AdvancED (the North Central Association
Commission on Accreditation and School Improvement (NCA CASI), the Northwest
Accreditation Commission (NWAC), and the Southern Association of Colleges and Schools
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(2)

(d)

Council on Accreditation and School Improvement (SACS CASI)), the Middle States
Association of Colleges and Schools (MSA), the New England Association of Schools and
Colleges (NEASC), the Western Association of Schools and Colleges (WASC), or the
Council on Occupational Education (COE);

(e)

Fees for transportation paid to a fee-for-service transportation provider. Transportation
fees can only be used for transportation to and from participating schools and educational
providers, including non-participating Category I, II, or III private schools, tutors or tutoring
services, and educational therapists;

(f)

Fees for early postsecondary opportunity courses and related examinations, or any
examinations related to college admission;

(f)

Computer hardware, technological devices, or other technology fees approved by the
department, if the computer hardware, technological device, or technology fee is used for
the student's educational needs and is purchased at fair market value through a
participating school, private school, or provider;

(g)

School uniforms, if required by a participating school;

(h)

Tuition and fees for summer education programs and specialized afterschool education
programs, as approved by the department, which do not include afterschool childcare;

(i)

Tuition and fees at an eligible postsecondary institution;

(j)

Textbooks required by an eligible postsecondary institution;

(k)

Educational therapy services for participating students provided by a therapist who has
been approved by the Department;

(l)

Fees for the management of the ESA by a private or non-profit financial management
organization approved by the Department, not to exceed two percent (2%) of the funds
deposited in an ESA account in a fiscal year.

Account Holders shall obtain pre-approval for tuition and fees, computer hardware or other
technological devices, tutoring services, educational therapy services, summer education
programs and specialized afterschool education programs, and any other expenses identified by
the Department. If pre-approval is not obtained, the expense shall be deemed an unapproved
expenditure. An Account Holder may request pre-approval by completing and submitting the
Department’s pre-approval form in accordance with procedures developed by the Department.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

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0520-01-16-.06 TERM OF THE ESA.
(1)

For purposes of continuity of educational attainment, a participating student shall remain eligible to
participate in the Program until the participating student meets one of the following, whichever
occurs first:
(a)

Enrolls in a public school;

(b)

Enrolls in a Category IV or V private school or a private school not approved under the
rules of the State Board;

(c)

Ceases to be a resident of the LEA in which the student resided when the student began
participating in the program;

(d)

Is suspended or terminated from the participating in the Program in accordance with T.C.A.
§ 49-6-2808;

(e)

Graduates or withdraws from high school;

(f)

Reaches twenty-two (22) years of age. The student may complete the school year in which
he or she reaches the age of twenty-two (22), provided a student shall not be enrolled in
the Program past August 15 of the next school year after they have reached twenty-two
(22) years of age; or

(g)

No longer meets or fails to verify that the participating student’s household income meets
the requirements T.C.A. § 49-6-2602(3)(D), and this rule according to the schedule and
income-verification process developed by the Department.

(2)

A participating student may voluntarily withdraw from the Program at any time. The Account Holder
shall complete the procedures for withdrawal from the Program as set by the Department.

(3)

The Account Holder may transfer the student from one Category I, II, or III private school to another
Category I, II, or III private school in accordance with procedures set by the Department.

(4)

In order for a participating student to continue in the Program, the Account Holder shall annually
apply to renew the ESA by following the procedures developed by the Department and posted on
the Department’s website.

(5)

If a participating student graduates high school or reaches twenty-two (22) years of age while
enrolled in high school pursuant to T.C.A. § 49-6-2603(d)(1), and has funds remaining in the
participating student’s open ESA the participating student shall become a Legacy Student.
(a)

A Legacy Student may use ESA funds to attend or take courses from an eligible
postsecondary institution and the expenditures are determined to be qualifying expenses.

(b)

A Legacy Student’s ESA shall be closed and any remaining funds shall be returned to the
state treasurer to be placed in the Basic Education Program (BEP) account of the

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education trust fund of 1992 under T.C.A. §§ 49-3-357 and 49-3-358, after the first of the
following events:

(6)

1.

Upon a Legacy Student’s graduation from an eligible postsecondary institution;

2.

After four (4) consecutive years elapse immediately after a Legacy Student enrolls
in an eligible postsecondary institution; or

3.

After a Legacy Student is not enrolled in an eligible postsecondary institution for
twelve (12) consecutive months.

Account Holders are not required to spend the entire sum each year, however, a portion of the
funds must be used each year on approved expenses for the benefit of the student enrolled in the
ESA Program and overall spending must equal fifty (50) percent of the annual award by the
deadline for submission of the last expense report of the contract year.
(a)

If overall spending does not equal fifty (50) percent by the deadline for submission of the
last expense report and if the ESA is renewed for the following year, the Department shall
subtract the difference from the payments in the next contract year.

(7)

If a student withdraws from the ESA Program or if the ESA is not renewed, the ESA shall be closed
and any remaining funds shall be returned to the state treasurer to be placed in the Basic Education
Program (BEP) account of the education trust fund of 1992 under T.C.A. §§ 49-3-357 and 49-3358.

(8)

The Department shall provide parents of participating students or participating students who have
reached the age of majority with a written explanation of the allowable uses of ESA funds and the
responsibilities of parents of participating students and participating students who have reached
the age of majority regarding ESA funds. The Department shall also provide parents of participating
students or participating students who have reached the age of majority with a written explanation
of the Department’s duties regarding ESA funds, eligible students, participating students, and
legacy students.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.07 MONITORING AND COMPLIANCE.
(1)

The Department shall conduct fiscal and program compliance reviews of all ESAs pursuant to
procedures developed by the Department.

(2)

The Department may conduct or contract for random, quarterly, or annual review of ESAs.

(3)

The Department shall establish or contract for the establishment of an online anonymous fraud
reporting service and an anonymous telephone hotline for reporting fraud. Individuals may notify
the Department of any alleged violation by an Account Holder or participating school(s) of state
laws, rules, or procedures relating to the Program. The Department shall conduct an inquiry of any
report of fraud, or make a referral to the appropriate agency for an investigation.
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Authority: T.C.A. §§ 49-1-302 and49-6-2601, et seq. Administrative History:

0520-01-16-.08 PARTICIPATING SCHOOLS.
(1)

Eligible private schools interested in enrolling students receiving ESAs shall submit an application
to the Department by the deadline set by the Department.
(a)

(2)

The Department shall develop an application and application process for eligible private
schools to participate in the Program. Such application shall be posted on the Department’s
website and shall include, but not be limited to:
1.

The maximum number of students receiving ESAs the school has the capacity to
enroll;

2.

Demonstration of financial viability to repay any funds that may be owed to the
state by filing with the application financial information verifying the school has the
ability to pay an aggregate amount equal to the amount of IEA funds expected to
be paid during the school year. The school may comply with this requirement by
filing a surety bond payable to the state from a surety, and in an amount
determined by the Department; and

3.

The school’s academic calendar, the school’s admission policy, and the school’s
tuition and fees schedule.

(b)

The Department shall review the application and notify the school as to whether the school
meets the requirements outlined in (a) to become a participating school and receive ESA
funds from a participating student for qualified expenses including, tuition and fees.

(c)

If an eligible school is approved to be a participating school, the Department shall list the
school on the Department’s website, including grades served and any other information
the Department determines may assist parents in selecting a participating school.

As a condition of approval to become a participating school, the school shall agree to the following:
(a)

(b)

Be academically accountable to the Account Holder for meeting the educational needs of
the participating student by:
1.

At a minimum, annually providing to the Account Holder a written explanation of
the student’s progress;

2.

Ensuring participating students in grades three through eleven (3-11) are
administered the TCAP tests in math and English language arts each year the
participating student is enrolled in the participating school.

Comply with all state and federal health and safety laws or codes that apply to nonpublic
schools;

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(c)

Comply with monitoring requirements set by the Department;

(d)

Certify that they shall not discriminate against participating students or applicants on the
basis of race, color, or national origin;

(e)

Agree to accept reimbursement payments for tuition and fees from an Account Holder on
the payment schedule identified by the Department;

(f)

Agree to participate in the Program for the full school year unless suspended or terminated
by the Department;

(g)

Comply with T.C.A. § 49-5-202;

(h)

Conduct criminal background checks on employees; and

(i)

Exclude from employment:
1.

Any person not permitted by state law to work in a nonpublic school; and

2.

Any person who might reasonably pose a threat to the safety of students.

(3)

The funds in an ESA may be used only for educational purposes. Participating schools that enroll
participating students shall provide Account Holders with a receipt for all qualifying expenses paid
to the participating school using ESA funds.

(4)

Participating schools shall not charge participating students additional tuition or fees that are not
also charged to non-participating students.

(5)

Participating schools shall not, in any manner, refund, rebate, or share funds from an ESA with a
parent of a participating student or a participating student.

(6)

Participating schools shall notify the Department of any participating student that withdraws from
the participating schools within five (5) business days of notification of withdrawal.

(7)

Participating schools shall annually submit to the Department the graduation and completion
information of participating students in accordance with procedures set by the Department.

(8)

Annually, participating schools shall submit a notice to the Department if they intend to continue
participating in the Program by following the procedures developed by the Department.

(9)

The Department may suspend or terminate a participating school from participating in the Program
if the Department determines the school has failed to comply with the requirements of the Act,
these rules, or the procedures set by the Department.
(a)

If the Department suspends or terminates a school’s participation, the Department shall
notify the affected participating students, parents of affected participating students, and the
participating school of the decision. If a participating school is suspended or terminated or

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if a participating school withdraws from the Program, affected participating students remain
eligible to participate in the Program.
(b)

(10)

The Department may suspend or terminate a participating school from participating in the Program
for low academic performance. Low academic performance is defined as:
(a)

(11)

A participating school may appeal the Department’s decision pursuant to the appeals
procedures set forth in these rules.

Failure of participating students to make academic progress as demonstrated by
performance measures from the TCAP tests or any nationally normed assessment utilized
by the school.

Participating schools are prohibited from sending ESAs to collections in order to settle unpaid
debts. All contracts entered into are the responsibility of the private parties involved.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.09 PROVIDERS AND POSTSECONDARY INSTITUTIONS.
(1)

In order to receive pre-approval as required by T.C.A. § 49-6-2607(b), providers, at a minimum,
shall:
(a)

Maintain documentation that any person providing services to participating students has
undergone a fingerprint-based criminal history records check conducted by the Tennessee
Bureau of Investigation (TBI) and forwarded by the TBI to the Federal Bureau of
Investigation (FBI) for processing pursuant to the National Child Protection Act.

(b)

Maintain documentation of the provider’s credentials demonstrating the provider meets the
qualifications set by the Department.

(2)

Providers and eligible postsecondary institutions shall provide Account Holders with a receipt for
all expenses paid to the provider or eligible postsecondary institution using ESA funds.

(3)

Providers and eligible postsecondary institutions shall not, in any manner, refund, rebate, or share
funds from an ESA with a parent of a participating student or a participating student.

(4)

The Department may suspend or terminate a provider from participating in the Program if the
Department determines the provider has failed to comply with the requirements of the Act, these
rules, or the procedures set by the Department.
(a)

If the Department suspends or terminates a provider’s participation, the Department shall
notify the affected participating students, parents of affected participating students, and the
provider of the decision. If a provider is suspended or terminated or if a provider withdraws
from the Program, affected participating students remain eligible to participate in the
Program.

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(b)

(5)

A provider may appeal the Department’s decision pursuant to the appeals procedures set
forth in these rules.

Providers and eligible postsecondary institutions are prohibited from sending ESAs to collections
in order to settle unpaid debts. All contracts entered into are the responsibility of the private parties
involved.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.10 RETURN TO LOCAL EDUCATION AGENCY.
(1)

A participating student who is otherwise eligible to return to the student’s LEA, may return to the
LEA at any time after enrolling in the Program. Upon enrollment in an LEA the student’s
participation in the Program shall be terminated.

(2)

If a student enrolls in an LEA the parent of a participating student or the participating student who
has attained the age of majority shall notify the Department in accordance with the procedures and
timelines set by the Department.

(3)

Upon termination of a student’s participation in the Program, the Department shall close the
participating student’s ESA and any remaining funds shall be returned to the state treasurer to be
placed in the Basic Education Program (BEP) Account of the Education Trust Fund of 1992 under
T.C.A. §§ 49-3-357 and 49-3-358.

(4)

Upon a student’s termination from the Program, the participating school shall send all educational
records of the participating student to the LEA where the student has enrolled.

(5)

Upon enrollment in the LEA, if the parent or student who has attained the age of majority requests,
in writing, an evaluation for eligibility pursuant to the Individuals with Disabilities Education Act, the
LEA shall treat the request as a request for an initial evaluation under 34 C.F.R. § 300.301.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.11 APPEAL PROCEDURES.
(1)

Participating schools or providers may appeal the denial, suspension, or termination of the
participating school’s or provider’s participation in the ESA Program, and a parent of a student or
a student who has attained the age of majority may appeal an, application denial, suspension,
termination, or removal of the student from the ESA Program pursuant to the following two (2) step
appeal process:
(c)

Step one (1): The appeal shall be on the form provided by the Department and shall be
submitted to the commissioner of education, or the commissioner’s designee within ten
(10) business days of receipt of the notice of application denial, suspension, termination,
and/or removal. Notice of application denial, suspension, termination, and/or removal shall
be provided to the electronically and via first-class USPS mail and shall be deemed to be
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 EDUCATION SAVINGS ACCOUNTS

CHAPTER 0520-01-16

(Rule 0520-01-16-.11, continued)

(d)

received three (3) business days after the date of postmark. The appeal shall be reviewed
by the commissioner of education, or the commissioner’s designee, and a decision shall
be issued within forty-five (45) calendar days of receipt of the appeal.

(e)

Step two (2): The parent of a student or student who has attained the age of majority,
provider or participating school that submitted the appeal shall be notified of the
commissioner’s or commissioner’s designee’s decision in the step one (1) appeal
electronically and via first-class USPS. Such notice shall be deemed received three (3)
business days after the date of postmark. An appeal of the commissioner’s or
commissioner’s designee’s decision in step one (1) shall be filed with the commissioner by
the applicant, Account Holder, or participating school within thirty calendar (30) days and
shall be heard as a contested case hearing pursuant to the Uniform Administrative
Procedures Act (T.C.A. Title 4, Chapter 5).

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

0520-01-16-.12 CONFLICT OF INTEREST.
(1)

Use of ESA funds must be for the sole benefit of the participating student for which the ESA is
established. ESA funds shall only be used by the Account Holder on qualifying expenses.

(2)

It is a conflict of interest and is considered a misuse of ESA funds and a violation of ESA Program
rules and procedures for a family member of a participating student, including a spouse, parent,
parent-in-law, child, son-in-law, daughter-in-law, grandparent, grandchild, brother, sister, uncle,
aunt, nephew, niece, or any person who resides in the same household as a participating student
to derive any financial benefit from the ESA Program.

Authority: T.C.A. §§ 49-1-302 and 49-6-2601, et seq. Administrative History:

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