Texas admits Islamic schools to education savings account program after legal challenge

Texas officials have begun allowing several Islamic private schools to participate in the state’s new education savings account program, marking a significant development in an ongoing legal dispute over religious discrimination and access to public education funds.

The decision follows two federal lawsuits filed earlier this month by Muslim parents and Islamic school operators who argued that the state had unfairly excluded their institutions. The cases, now consolidated, prompted U.S. District Judge Alfred Bennett to intervene, extending the program’s application deadline to March 31 and ordering the state to review the schools’ eligibility.

At the center of the controversy is Texas’ recently launched education savings account program, created under Senate Bill 2 and signed into law in 2025 by Greg Abbott. The program allows families to use public funds—roughly $10,500 per student—to cover approved educational expenses, including private school tuition and home-schooling costs. Demand has surged, with more than 200,000 students applying and over 2,200 private schools already approved.

However, the rollout has not been without conflict. Texas Comptroller Kelly Hancock, who oversees the program, had previously blocked hundreds of schools accredited by Cognia, including institutions serving Muslim, Christian, and special-needs students. The move followed a legal opinion from Attorney General Ken Paxton, who said the state could exclude schools with alleged ties to foreign adversaries or terrorist organizations.

That justification drew sharp criticism, particularly because it was partly tied to concerns about events hosted by the Council on American-Islamic Relations, a Muslim civil rights organization. Although the group has been labeled a terrorist organization by state leadership, it has challenged that designation in court, and it is not listed as such by the U.S. State Department.

Plaintiffs in the lawsuits argued that the exclusion of Islamic schools was not based on evidence of wrongdoing but rather on broad assumptions tied to religious identity. One parent, who pays nearly $18,000 annually for private schooling, said the policy effectively prevented his family from accessing funds available to others.

The state initially defended its position in court, arguing that no schools had been formally denied yet and that families would not be harmed because they are not required to select a school until July. Officials also warned that extending deadlines could disrupt planning for thousands of families.

Judge Bennett’s March 17 order temporarily halted the state from finalizing funding awards and required officials to update application timelines and reconsider the excluded schools. While the ruling stops short of mandating full approval, it ensures that the schools involved in the lawsuit are given a fair opportunity to apply.

On March 19, the comptroller’s office confirmed that it had accepted the Islamic schools that filed suit, along with one tied to a parent plaintiff. Officials added that reviews of additional schools are ongoing, though details about the evaluation process remain unclear.

The next court hearing is scheduled for April 24, where broader questions about the program’s implementation—and whether it unlawfully discriminates based on religion—are expected to take center stage.

The case highlights growing tensions around school choice policies in Texas, where political debates over education have increasingly intersected with issues of religion, civil rights, and state authority.