Agreement And Funds Transfer

(1) Upon notification by the Department that an EFS has been authorized and may be established, a Parent of an Eligible Student or an Eligible Student who has reached the age of eighteen (18) shall become an Account Holder only after signing an Agreement to: (a) Ensure the provision of an education for the Recipient that satisfies the compulsory school attendance requirement provided in T.C.A. § 49-6-3001(c)(1) through enrollment in a Private School; (b) Comply with the requirement established in Chapter 7 of the Public Acts of 2025, First Extraordinary Session, that Recipients in grades three through eleven (3-11) participate in a nationally standardized achievement test that is aligned to the respective Private School’s instructional program as determined by State Board Rule 0520-07-02 or the Tennessee Comprehensive Assessment Program (“TCAP”) tests in math and English language arts for the grade in which the Recipient is enrolled, or successor tests approved by the State Board, for each year of enrollment in the Program; (c) Not enroll the Recipient in a Public School during the time the Recipient is enrolled in the Program; EDUCATION FREEDOM SCHOLARSHIPS CHAPTER 0520-01-24 (d) Not enroll the Recipient in the ESA program or the IEA program during the time that the Recipient is enrolled in the Program; (e) Release the LEA in which the Recipient resides and the Public School for which the Recipient is zoned to attend from all obligations to educate the Recipient during the time the Recipient is enrolled in the Program; (f) Acknowledge that the Recipient does not retain the right to receive special education and related services from the LEA in which the Recipient resides through an IEP and that Recipients have the same rights under the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1414, to receive equitable services through an ISP as all other students enrolled in non-public schools; (g) Acknowledge that Recipients with an ISP are entitled to receive some special education and related services and not all of the services that are required for a Recipient with an IEP to receive a FAPE (Recipients using EFS funds who previously held IEPs may engage with the LEA to develop an ISP through the consultation process, as defined in 34 C.F.R. §§ 300.134 and 300.137); (h) Acknowledge that the Private School is only required to comply with the requirements of Section 504 of the Rehabilitation Act of 1973 if the Private School receives federal funding; (i) Be responsible for any educational expenses in excess of the awarded EFS amount; (j) Comply with the acceptable uses of EFS funds and the responsibilities of the Account Holder; and (k) Not use EFS funds for Service Providers who are family or household members of the Recipient, as described in section 0520-01-24-.14 of this chapter. (2) The Agreement and any additional information or documentation required by the Department shall be submitted to and received by the Department by the deadlines set by the Department before the first EFS payment is disbursed. If the Agreement and any additional information or documentation required by the Department are not submitted and received by the deadlines set by the Department, the Eligible Student shall not be enrolled in the Program during the school year for which the applicant applied to participate in the Program. (3) The Department shall establish procedures to effectuate the EFS funds transfer process and dates on which each EFS payment shall be disbursed. (4) Prior to becoming a Recipient, the Account Holder shall provide proof of enrollment in a Private School. (5) EFS funds shall not be used for tuition at any non-public school other than a Private School as defined in section 0520-01-24-.02(16) of this chapter. (6) No EFS funds shall be paid directly to a Recipient or to an Account Holder. (7) The EFS funds constitute a public benefit and are not income taxable to the Account Holder, Parent, or Recipient. (8) In accordance with the procedures set by the Department, the Department may remove any Account Holder from participating in the Program if the Account Holder fails to comply with the terms of the Agreement or applicable laws, rules, or procedures, including if the Account Holder misuses funds. EDUCATION FREEDOM SCHOLARSHIPS CHAPTER 0520-01-24 (9) If the Department determines that EFS funds have been misused, the Department shall notify the Account Holder, and the Account Holder shall repay the amount of misused funds in the manner and within the timeframe set by the Department. Additionally, the Department is authorized to freeze or withdraw funding directly from the Recipient’s EFS for reasons including, but not limited to, fraud; misuse of funds; failure by the Account Holder to comply with state laws, rules, procedures, or the Agreement; or the Recipient’s return to a Public School.