Special-needs students now get funding flexibility
NASHVILLE, Tenn. — Governor Bill Haslam signed the Individualized Education Act into law on Monday, making Tennessee the 22nd state in the nation to enact a private school choice law.
The new law gives parents of children with special needs the ability to exercise meaningful choice in their child’s education through individualized education accounts (also known as Education Savings Accounts, or ESAs).
StudentsFirst Tennessee policy director Daniel Zavala said, “Families across Tennessee have cause to celebrate today as our state joins 21 others in giving thousands of parents the final say in determining the best educational avenues for their child. With the governorss signature, roughly 18,000 students with special needs from every corner of our state will soon have access to a diverse array of specialized education options that may better meet their unique learning needs.”
The Foundation for Excellence in Education said the law gives parents the flexibility to direct their child’s funding to the schools, courses, programs and services that best fit their children’s needs through an Individualized Education Account (IEA).
The act lets parents direct their child’s funding to the schools, courses, programs and services of their choice — including tuition and fees, curriculum materials, tutoring, online learning, dual enrollment and licensed services such as therapy for students with disabilities.
The act provides for the Department of Education (DoE) to deduct up to four percent from IEA funds to cover the costs of administering the program. Both the state and local school districts are projected to save money under the program.
The act requires the DoE to ensure funds are used only for educational purposes, provide parents with a written explanation of the allowable uses of the money and their responsibilities, conduct random, quarterly and annual audits, set up fraud reporting and have the ability to suspend or terminate any school or provider that fails to comply.
Participating students are also required to partake in annual testing, and the results must be reported.
StudentsFirst Tennessee is a nonprofit educational organization; for details, see studentsfirst.org/tennessee. The Foundation for Excellence in Education is also a nonprofit educational organization; see details at excelined.org/.
ABLE Act helps disabled people save tax free for medical costs
NASHVILLE, Tenn. — Families of those with disabilities are now one step closer to saving more money for medical costs with tax-free earnings.
On Monday, Tennessee governor Bill Haslam signed the Tennessee ABLE Act into law, giving state treasurer David H. Lillard Jr. the authority to create and offer tax-advantaged investment plans to help families of those with disabilities save money for a variety of qualifying expenses.
The legislation, passed unanimously by the 109th General Assembly, establishes an Achieving a Better Life Experience (ABLE) Program in accordance with federal legislation. The act is effective July 1, and the Tennessee Treasury Department plans to have the program operational by Jan. 1, 2016.
Under Treasurer Lillard’s leadership, Treasury established the TNStars College Savings 529 program in 2012. The program has received national accolades for its top-performing investment options. Treasury will be responsible for the implementation, administration, investment options and management and customer service of this new ABLE program, a plan whose concept is modeled after the 529 College Savings Programs.
Lillard said, “We are excited to soon offer a similar program to help individuals with disabilities and their families save more by taking advantage of the power of compounding interest and tax-free earnings for qualifying expenses.”
Once established, earnings on the funds saved through the Tennessee ABLE program would supplement the benefits provided through private insurance, Medicaid benefits, Supplemental Social Security Income, as well as the account beneficiary’s income. Qualifying expenses will include, but are not limited to, education, housing, transportation, employment training and support, assistive technology, and personal support services.
Congress adopted the ABLE Act in December 2014, setting guidelines for this new type of tax-advantaged saving program. The ABLE Act is the first major federal legislation for the disabled since the Americans with Disabilities Act in 1990.
