Fitch Ratings-Austin/New York-28 September 2026: The launch of the Texas Education Freedom Account (TEFA) program this school year raises long-term credit risks for the state’s charter and district schools as TEFAs appear likely to expand along paths seen in Arizona and Florida, Fitch Ratings says.
Texas’ current $1 billion funding limit for the 2026-2027 biennium and lower award caps for non-accredited options like homeschools and microschools provide near-term protection. However, strong demand, statutory funding provisions and estimated costs of up to $7.9 billion by the 2030-2031 biennium point to substantial growth. This could disrupt enrollment and revenue, as in earlier-adopting states.
Fitch believes the net credit effect on any Texas charter school will depend largely on its competitiveness and adaptability. In Arizona and Florida, charter schools have proven more resilient than district schools amid voucher growth, population changes and other pressures. Some charter schools also have captured a portion of voucher funds by offering ‘a la carte’ courses and programs to homeschooled and microschooled students.