How to start a microschool in Texas with TEFA

Texas just created the largest school-choice program in the country, and the most common question we hear from teachers is the most practical one: can I open my own microschool and fund it with TEFA money? The honest answer is yes, but with a timing catch that nobody states plainly. This is the plain version: what it takes to start a microschool in Texas, why a brand-new school cannot collect the full TEFA award in its first year, and the real paths to the money in the meantime. Every claim below traces to a state agency or the program’s administering organization, listed at the end.

Can you just start a microschool in Texas?

For the act of opening the school, Texas is one of the least regulated states in the country. The Texas Education Agency does not license, register, accredit, or monitor private schools, and Texas law treats a home-based school as a private school. That framework comes from the Texas Supreme Court’s decision in Leeper v. Arlington ISD, which established that home and small private instruction is exempt from compulsory-attendance oversight the same way a private school is.

What that means in practice for a new microschool:

• No state license is required to operate a private school or microschool.
• No teacher certification is required to teach in a private school. You can hire for subject expertise rather than a state credential.
• No state registration or minimum-hours filing is imposed by TEA on private or home schools.

This is why a teacher can leave a district job and have a small learning community running within a season. The barrier to starting is low. The barrier to TEFA tuition money is a separate thing, and that is where founders get surprised.

The honest catch: a new microschool cannot take the full award yet

TEFA pays a participating private school $10,474 per K-12 student for 2026-27, and up to $30,000 for a student with a disability who has an IEP on file with TEA. But to be a participating private school, the program sets three structural requirements:

• The school is accredited by an organization recognized by the Texas Private School Accreditation Commission (TEPSAC) or by TEA.
• The school has been in continuous operation for at least two school years before the date it applies.
• The school has a Texas location and annually administers a nationally norm-referenced assessment to participating students in grades 3 through 12.

Read that two-year line again, because it is the one that catches new founders. A microschool you open for the 2026-27 year has zero years of operating history, so it cannot enroll students on the full TEFA private-school tuition award this year, no matter how good it is. That is not a technicality you can argue around. It is the eligibility gate.

How a new microschool can still touch TEFA money in year one

Not qualifying as a participating private school does not mean zero access to the program. There are two legitimate paths, and a new operator should be clear-eyed about both.

Path one: homeschool accounts and the approved-provider route

TEFA funds a homeschool student up to $2,000 per year, deposited fully on July 1 and spent through the Odyssey marketplace on approved education expenses: curriculum, instructional materials, tutoring, and educational therapies, among others. Families whose children are home-based can direct that money to approved providers, and a microschool can register as one. Per Odyssey’s vendor requirements, an approved provider is a US business entity, in good standing with the Texas Comptroller, registered with the Texas Secretary of State, offering services that are eligible under TEFA.

Two conditions matter here, because they are easy to get wrong. Tutoring is an eligible expense only when the tutor holds an active US teaching certificate, and educational therapies must be delivered by licensed professionals. Informal arrangements do not qualify, and there are no reimbursements: every dollar moves through the Odyssey marketplace to the provider, never as a cash-back claim. So a new microschool will not collect $10,474 of tuition per child this way, but it can be paid for eligible services out of families’ homeschool accounts while it builds toward full participation.

Path two: build toward the two-year and accreditation bar

The full per-student tuition award unlocks when you meet the participating-private-school requirements. That means running the school cleanly for two school years and pursuing accreditation through a TEPSAC-recognized or TEA-recognized accreditor in parallel, since accreditation is the requirement with the longest lead time. A microschool that opens in 2026 and operates carefully is positioning itself to participate for the year it clears both bars, not before. Plan honestly around that timeline rather than against it.

What to set up from day one

Here is the part most new founders skip and later regret. The two-year clock and the accreditation review both reward a school that has clean, dated records from its first week. The microschool that can show two years of consistent enrollment, attendance, and financial records walks into accreditation and platform approval far faster than the one reconstructing it from memory. Set these up before you teach your first day:

1. A real business entity. Form the LLC or corporation that will run the school, get an EIN, and open a business bank account in that name. Approved-provider and, later, participating-school status both require the entity, a matching W-9, and banking in the legal name.
2. Dated enrollment and attendance records. Start an attendance log the first week. This is the evidence of continuous operation that the two-year requirement and any later review depend on.
3. A tuition and services schedule in writing. State your annual price and, if you take homeschool-account families, exactly which eligible services you provide and at what rate.
4. A money-tracking system that thinks in quarters. TEFA disburses on a quarterly cadence (25 percent on July 1, 25 percent on October 1, and 50 percent on February 1 for private-school students). Whatever you take in through the Odyssey marketplace, track who was funded, who is pending, and what each quarter still owes, from the start.

Where CohortLedger fits

CohortLedger is the back-office layer for exactly this operator: the independent microschool running on ESA money. It keeps the dated enrollment and attendance records the two-year and accreditation path depends on, tracks the quarterly ESA money flow per student, flags compliance items before a deadline can hold a disbursement, and generates an audit-ready packet a state reviewer can read in one click. We never touch your funds; the money moves through Odyssey to your account. The point is that the day you do clear the participation bar, your records already prove it, instead of being a year of catch-up.

You can click through the whole thing with sample data, no signup, in the live demo, and run your own numbers in the free TEFA calculator.

Keep reading on TEFA

Once you are operating, the deeper pieces: the Texas TEFA operator guide for the full program picture, vendor registration on Odyssey for the approval steps, and the eligible-expense rules for what the award can and cannot pay for.