Texas TEFA: Which Compliance Track Is Your Microschool On?¶
Last updated: July 3, 2026
The email arrives on a Tuesday morning: "Hi! My daughter was approved for a Texas Education Freedom Account and I'd love to use it toward tuition this fall. Can you let me know how to set that up?"
You search "Texas TEFA," see "$10,474 per student per year," and do the math on your 20-student microschool. For about thirty seconds this feels like the best Tuesday of your life.
Then you read further.
That $10,474 figure applies to a specific type of school under specific conditions — conditions your microschool probably doesn't meet yet. The family who emailed you has a different kind of TEFA account, with a different funding amount, flowing through a different registration pathway.
This post is for the school operator, not the ESA account holder. If you're a Texas family navigating your own TEFA account, the TEA and the Odyssey portal have dedicated family guides. This is written for the founder or administrator who got that email and needs to know: which track are you on, what does registration require, and what records do you need before your school year opens in August?
August is six weeks out. Let's get into it.
TEFA Has Two Tracks — And You're Probably on Track 1¶
The Texas Education Freedom Accounts program, which distributed its first round of funds on July 1, 2026, is structured around two distinct participation tracks. The number you see in the headlines — $10,474 — belongs to Track 2. Most microschools, learning pods, and co-ops are on Track 1. Here is how they work.
Track 2: Approved Private School¶
Track 2 is the "full" school participation tier. A student enrolled at a Track 2 school can receive up to roughly $10,474 per year from their TEFA account — which is approximately the state's per-pupil public school funding amount.
To qualify for Track 2, your school must meet all of the following conditions:
- TEPSAC or TEA accreditation. TEPSAC is the Texas Private School Accreditation Commission, the state-recognized body that accredits independent and private schools. TEA accreditation applies to certain public-to-private conversions and charter entities. One of these two is required — no exceptions.
- Two or more continuous years of operation. The program requires demonstrated operational history. A school in its first or second year does not qualify for Track 2 regardless of accreditation status.
- Annual nationally norm-referenced testing. Every TEFA-funded student enrolled in grades 3–12 must take a nationally norm-referenced standardized test each year. Results must be shared with the student's family.
- Enrollment through the Odyssey school portal. Track 2 schools manage TEFA enrollment and tuition processing at tefa-schools.withodyssey.com.
This is the track that generates the headlines. It is also the track that the vast majority of Texas microschools cannot access this year — either because they lack accreditation, because they haven't yet reached the two-year operational threshold, or both.
Track 1: Approved Vendor / Service Provider¶
Track 1 is where non-accredited microschools, learning pods, co-ops, and instructional services register. On Track 1, a TEFA student can spend up to $2,000 per year — total, across all approved vendors — on educational goods and services.
Students who are homeschooling or attending a non-accredited microschool receive the $2,000 base amount. Their families access these funds through the Odyssey platform and use them to purchase approved educational services directly from registered vendors: tutoring, curriculum, supplemental instruction, and similar categories.
Your microschool, registered as a vendor, can receive payments from those families' TEFA accounts in exchange for instruction you provide.
Which track is yours?
- Your school IS accredited (TEPSAC or TEA) AND has operated for 2+ years → Track 2 (Private School)
- Your school is NOT accredited OR has operated for less than 2 years → Track 1 (Vendor)
- You launched within the last 2 years → Track 1 only, no exceptions
The dollar difference between the tracks is real. But before you dismiss Track 1 as small money, do the math. Twenty students enrolled, 8 families with active TEFA accounts: that's $16,000 in available funding this year — no accreditation required, no standardized testing, accessible now if you complete vendor registration before your families need to pay tuition.
$16,000 is worth registering for. The families are already enrolled. The money is sitting in accounts. The only thing standing between you and receiving it is a registration process you haven't started.
Track 1: How to Register as a TEFA Vendor¶
This is the main operational section. If your microschool is on Track 1 — non-accredited, newer than two years, or both — this is your path to accepting TEFA funds this fall.
What "Vendor" Actually Means Here¶
In Texas's TEFA framework, a vendor is any U.S.-based provider of approved educational goods or services. Tutors, curriculum publishers, online course platforms, enrichment instructors, and supplemental instruction providers all register under this category. A non-accredited microschool typically registers as a vendor and bills families for "tutoring services" or "supplemental instruction" — not "tuition" in the formal sense, though the practical effect is the same.
This distinction determines your service category selection during registration and shapes how you describe services in enrollment agreements and invoices.
Step 0: Get Your Business Entity in Order¶
Before you can complete Odyssey vendor registration, you need a business entity registered with the Texas Secretary of State. This is not optional.
Most microschools operate as a Texas LLC — simple, inexpensive, and the most common choice. Corporations work if you have multiple equity holders. Out-of-state entities can register but pay a $750 foreign entity registration fee.
You also need an EIN from the IRS. Apply at irs.gov/ein — ten minutes, free, immediate. You'll enter it during Odyssey registration.
If you're already operating with a registered Texas entity and an EIN, you're ready to move to the portal. If not, handle this first — Texas SOS registration takes a few days to a few weeks depending on the filing method.
The Odyssey Portal Registration¶
Vendor registration happens at tefa-vendors.withodyssey.com. The registration pathway is separate from the Track 2 school portal (tefa-schools.withodyssey.com), so make sure you're at the right URL.
Here's how the registration flows:
1. Create your account. Enter your business name, contact information, and email. Verify your email address and set up two-factor authentication — Odyssey requires 2FA for all vendor accounts.
2. Select your geographic scope. You'll indicate whether you serve students statewide or limit your services to specific counties. Most microschools are county-limited in practice. Either is acceptable; statewide registration makes you findable by more families.
3. Upload compliance documents. You'll need a voided check from your business bank account (for payment routing) and your IRS EIN confirmation letter. If you've misplaced the EIN letter, call the IRS Business and Specialty Tax Line to request a replacement.
4. Choose your service category. Odyssey divides approved services into categories. For a microschool providing daily instruction, your best fit is typically "supplemental instruction" or "tutoring services." Read the category descriptions carefully and select what honestly matches how you deliver and bill for your services. This selection affects which TEFA expense codes families use when paying you, so accuracy here matters.
5. Submit for review. Odyssey and the Texas Comptroller's office vet your application — reviewing your business registration status, tax standing, and background information. This takes time. The state has not published an exact review timeline, but anecdotal reports from early registrants suggest one to three weeks is typical.
6. Get listed in the Vendor Finder. Once approved, your school appears in the TEFA Vendor Finder at finder.educationfreedom.texas.gov. Families search this directory to locate approved vendors and initiate payment from their Odyssey accounts. You cannot receive TEFA payments until you appear here.
Is There a Registration Deadline?¶
The state has not published a hard cutoff — registration is rolling. You can technically register in September and receive TEFA funds starting in October.
But the practical deadline is the first day of school. If a family tries to pay you on August 25 and you're not in the approved vendor list, the transaction fails. The vetting review takes weeks, not days. If you want to be paid from day one, you need to be in the vendor directory before day one.
Register now.
Note on Tutor-Specific Requirements¶
If individual teachers plan to register as independent tutors rather than billing through your school's business entity, the requirements change: Odyssey requires a current Texas teaching certificate and a background check within 30 days of approval. Most microschool operators register the school's entity as the vendor and bill through that — simpler, consolidated, and no certification requirement. If your model involves teachers billing families directly, check Odyssey's support documentation for the individual tutor pathway.
What Families Can Actually Buy From You¶
The $2,000 is the total available for all TEFA purchases combined — not just what they spend with your school. A family might allocate $800 to curriculum, $600 to an online course, and $600 to instruction at your school. Approved categories include tuition for instruction, curriculum materials, and educational technology (capped at 10% of the annual amount).
Families must designate your school as a vendor in their Odyssey account and initiate payment from their end — you cannot pull funds. Set clear billing terms in your enrollment agreement and ask families to complete their Odyssey designation before the first day of school.
Track 2: Private School Requirements (For Accredited Schools Only)¶
If you're not yet accredited, skip this section. Track 2 requires existing TEPSAC or TEA accreditation — this is not something you can fast-track before August. The accreditation pathway is a meaningful longer-term strategic decision for microschools, and we cover it in depth in our microschool accreditation guide. For now, your path is Track 1.
If you are already accredited and have been operating for two or more years, here is what Track 2 requires this fall.
Registration portal: tefa-schools.withodyssey.com — a different portal from Track 1. Do not use the vendor URL.
Documentation to upload: Your current accreditation certificate and your accrediting body's approval letter. Odyssey will verify your accreditation status directly.
Payment setup: Track 2 schools process tuition through Stripe on the Odyssey platform. You'll connect your business bank account during registration.
The standardized testing commitment: This is the key compliance obligation unique to Track 2, and you need to plan for it now. Every TEFA-funded student enrolled in grades 3–12 at your school must take a nationally norm-referenced standardized test each year, and you must share the results with that student's family.
A nationally norm-referenced assessment is a standardized test — Iowa Assessments, Stanford 10, ITBS, and similar instruments — designed to compare your students' performance against a representative national sample. You select which test to administer. You do not submit results to the state, but you must share them with the student's family and keep records showing you did. The obligation is annual, covers every TEFA-funded student in the applicable grade range, and begins in the first year of participation.
Budget for this now. Test administration costs vary by instrument, but plan for $15–40 per student depending on the test and how you administer it.
Enrollment routing: Tuition agreements and enrollment terms for TEFA-funded students must flow through Odyssey, not directly between your school and the family. Your school sets the tuition amount; Odyssey handles the payment transaction.
Track 1 vendors have no standardized testing mandate from TEFA — this is a meaningful operational difference between the two tracks, and it's one reason some schools choose to delay pursuing Track 2 status even after they become eligible.
The Records Your System Needs to Produce¶
Regardless of which track you're on, TEFA has audit provisions. The Comptroller's office contracts with a third-party auditor for annual program-wide reviews. Auditors can request documentation for any transaction in the system.
The audit question sounds exactly like this: "Show me that student [Name] was enrolled and attending on [date] when you billed $400 for tutoring services."
If you can pull that answer in three minutes, you're fine. If you're digging through email threads and spreadsheet tabs, you have a problem.
Here's what you need to have ready, by track.
Track 1 (Vendor) Records¶
Transaction documentation. For every payment you receive through Odyssey, keep a copy of the invoice or receipt. Odyssey generates these automatically, but do not rely solely on the platform's records — download and store copies in your own system. Platforms get updated, interfaces change, and you want documentation you control.
Enrollment records. For each student, you need a record showing they were actively enrolled during the period you billed for. This is the link auditors check first: you billed for instruction on a given date — was the student actually a student at your school on that date? Your enrollment record establishes that.
At minimum, this means: student name, enrollment start date, grade level, the program or class they're enrolled in, and any agreement documentation. If a student left mid-semester, you need a departure date on record too.
Attendance logs. TEFA doesn't mandate attendance tracking in the same way a public school does, and there's no specific reporting requirement for Track 1 vendors. But if your billing is time-based — per-session tutoring, weekly instruction hours, monthly tuition tied to a certain number of instructional hours — your attendance log is the document that proves delivery. An auditor who sees a $400 charge for "8 sessions of supplemental instruction" will want evidence that 8 sessions happened.
Even if your billing is flat monthly tuition rather than per-session, an attendance log is protection. It shows the student was present and receiving the service you charged for.
Track 2 (Private School) Records¶
Everything in Track 1, plus:
Annual test results, by student. For every TEFA-funded student in grades 3–12: the test administered, the date, and confirmation that results were shared with the family (an email record works). Retain these for at least three years after the student leaves.
Enrollment agreements. Odyssey provides a paper trail for Track 2 agreements, but keep your own copies of the terms, date signed, and tuition amount disclosed.
Continuous operation documentation. This was required for your initial Track 2 application, not as ongoing compliance — but keep the underlying records accessible in case accreditation status ever needs re-verification.
Getting Audit-Ready Before Day One¶
The fastest way to be audit-ready is to have your records in a system that generates dated, per-student logs from the first day of school. Not a spreadsheet you'll backfill in November. A system that captures attendance, enrollment status, and student records in real time.
NavEd's attendance tracking creates a dated, per-student log you can export for any date range in a few clicks. Enrollment records store each student's start date, program, and agreement status. Both are included in the Standard plan — and getting your records right from day one is far less work than reconstructing them for an audit later.
Before August: Your 5-Step TEFA Readiness Checklist¶
Six weeks is enough time to get this done if you start this week. Here's the sequence.
1. Confirm your track.
Are you accredited through TEPSAC or TEA and two or more years into continuous operation? You're on Track 2. Otherwise, you're on Track 1. This single decision determines every other step. Do not skip it.
2. Get your business entity in order.
Texas Secretary of State registration takes a few days to a few weeks. You cannot complete Odyssey registration without it. If you need an EIN, apply at irs.gov/ein — ten minutes, free, instant. If you're unsure which structure fits your school, consult a Texas business attorney before you file, not after.
3. Register in the Odyssey portal.
Go to tefa-vendors.withodyssey.com for Track 1 or tefa-schools.withodyssey.com for Track 2. Complete the full application, upload your compliance documents, and submit. The vetting review takes time — one to three weeks is typical based on early registrant reports. Every day you wait is a day closer to August with no approval in hand.
4. Tell your families you're registered.
Once you appear in the TEFA Vendor Finder at finder.educationfreedom.texas.gov, email every enrolled family with a TEFA account. Include a direct link to your listing and explain that they need to log into Odyssey, find your school, and designate funds to you. Payment authorization comes from their side, not yours. Give them a clear deadline: complete this before the first day of school.
5. Set up your record-keeping system before day one.
August 1 is not the time to figure out how you'll track attendance and enrollment. Every student record you create from the first day of school either helps you or hurts you in a future audit. Set up your system now — whether that's NavEd or something else — so the records are accurate, dated, and retrievable from the start.
The families who emailed you this summer about TEFA aren't going to find a different microschool. They found yours because you're doing something right. Don't lose the funding because registration slipped to the bottom of the list.
Frequently Asked Questions¶
Can I register as both a vendor and a private school?¶
No. The track is determined by your accreditation status and operational history, not your preference. Meet both Track 2 thresholds — register as a private school. Don't — register as a vendor. There is no dual registration.
What if a family's TEFA account only has $2,000 but my tuition is higher?¶
The family pays the difference directly to you. TEFA doesn't cap what you charge — it only funds what's available in the account. A family with $2,000 in their TEFA account who owes $6,000 in tuition pays $2,000 through Odyssey and $4,000 directly to your school through your normal billing process. Make this clear in your enrollment agreement so families aren't surprised. Your tuition agreement should describe how TEFA payments interact with your standard billing.
Do I need to administer standardized tests if I'm on Track 1?¶
No. The annual standardized testing requirement is specific to Track 2 (private schools) and only applies to TEFA-funded students in grades 3–12. On Track 1, there is no TEFA-specific testing mandate. Note that your students may still have state-level testing obligations under Texas's general homeschool laws — those requirements exist independently of TEFA and apply based on how each family has structured their child's schooling.
My school isn't a business entity yet. What do I set up?¶
Most single-founder microschools form a Texas LLC — simple, low-cost, and protective. File online at sos.texas.gov, then apply for an EIN at irs.gov/ein. You need both before you can complete Odyssey registration. If you're uncertain whether an LLC, S-corp, or nonprofit fits your situation, talk to a Texas business attorney before filing. The filing fee is small; restructuring later is not.
What if a family's TEFA application was approved but they haven't received funds yet?¶
TEFA funds were released July 1, 2026, for the first approved cohort. Families approved after that date receive funds on a rolling basis. You cannot be paid until the family's account is funded and they designate your school as a vendor in their Odyssey account. Encourage families who are still waiting to log in and check their application status. The sooner they know where they stand, the sooner you both know what to expect before August.
Getting Ready to Get Paid¶
That family who emailed you about TEFA is ready to pay. The funds were released July 1. They're waiting on you to be registered.
Track 1 registration is a concrete, completable process — entity registration, EIN, Odyssey application, document upload, vetting review, approval. None of the steps are complicated. All of them take time you don't have in unlimited supply.
Six weeks is enough time if you start this week.
Get your business entity in order. Open the Odyssey portal. Submit the application. Set up your student records system before the first day of school — the attendance and enrollment records you create from day one are the same records you'll produce in a TEFA audit.
NavEd's attendance tracking and enrollment management are included in the Standard plan — the audit-ready student records layer that completes your TEFA compliance workflow. Your first 5 students are always free.