What Texas Islamic School Leaders Need to Know This Summer: TEFA, Federal Services, and a New Tax Credit

The following reflections and notes were shared by Br. Umar after attending the TEFA Summit in San Antonio, a trip sponsored by ISLA and Catapult. In this post, he highlights key takeaways, resources, and important updates for Islamic school leaders.

Guest Blog by Br. Umar Warsi, Principal, Renaissance Academy

Bismillah. We recently attended the TEFA Equitable Services Summit in San Antonio, and came back with a lot on our mind. Many of you could not make it, so we wanted to share the highlights in plain language, the kind of things we would tell a fellow principal over coffee. If you want the full breakdown with deadlines and tables, we’ve put together a detailed reference document linked at the end.

TEFA Is Not a Voucher, and That Matters

A lot of people are still using the word “voucher” when they talk about TEFA. It is not. Under TEFA, the state deposits money into a family account on a platform called Odyssey, and parents direct payments to schools themselves. Your school does not receive anything until a parent logs in and authorizes it. That distinction matters legally and in how we talk about this program publicly.

For SY 2026-27, the standard award is $10,474 per student, up to $30,000 for students with a qualifying IEP, and $2,000 for homeschool students. Funds come in installments across the year, with the final payment hitting February 1st, 2027. One detail to flag: the next school year does not see its first payment until September 1st, 2027, so there is a gap to plan around.

A few new obligations came with TEFA. Every new hire must be run through the TEA Do Not Hire Registry before they start, no exceptions. Child abuse reporting is now required within 24 hours instead of 48. And if your school offers any discounts to families, call them scholarships, not discounts, and apply them the same way to all students.

Also: July 31st is the school deadline to confirm TEFA enrollment in Odyssey. Do not miss it.

You Are Entitled to Federal Services. Are You Claiming Them?

As ISLA covered in their July 2025 post and webinar on federal education services, private schools have a legal right to a proportionate share of services funded through federal programs. You do not receive money directly. The public school district (your LEA) holds the funds and delivers the services. But those services belong to your students and staff, and many Islamic schools are leaving them on the table.

The programs that matter most for most of our schools: Title I for academic support, Title II-A for professional development, Title III-A for English learner services, and Title IV-A for student wellness and enrichment. One thing that trips schools up: Title I follows where your students live, while the other titles follow where your school is located. For schools drawing from multiple districts, that means more than one LEA relationship to manage.

The advice is simple: do not wait for your district to call you. Reach out, request the consultation, and get it documented. If you need help, your state ESSA Ombudsman at TEA is there for exactly this.

A New Federal Tax Credit Is Coming in 2027

Last July, the One Big Beautiful Bill was signed into law, creating the first ever federal school choice program. Starting January 1, 2027, individual taxpayers can donate to a qualifying Scholarship Granting Organization (SGO) and receive a dollar-for-dollar federal tax credit up to $1,700. The SGO then uses those donations to fund scholarships for students from households at or below 300% of the area median income.

TPSA is putting together a task force to vet recommended SGOs for member schools to partner with. If your school wants to form its own, it is possible, as long as the SGO serves at least two schools and ten students. Treasury and IRS are still finalizing the regulations, but now is the time to start the conversation with your board.

ISLA has a helpful overview on a previous post at theisla.org/federal-tax-credit. It is worth a read for you and your community.

If you want the full notes with official deadlines, sources, and program details: Formal Summit Notes Document

Related ISLA Resources: theisla.org/federal-tax-credit | theisla.org/federalprograms | theisla.org/school-vouchers-2026

May Allah bless our schools and our families. Reach out anytime.
For informational purposes only. Does not constitute legal or financial advice.