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A new federal lawsuit filed in the Southern District of Texas is challenging the State of Texas over the alleged exclusion of Islamic private schools from the Texas Education Freedom Accounts (TEFA) program.
The case comes amid a broader legal and policy dispute surrounding school eligibility under Texas’s newly established school choice program. In recent weeks, state officials have clarified how eligibility decisions will be made, while also pursuing legal action against organizations they allege are connected to foreign terrorist activity. Those developments have now intersected with the administration of the school choice program.
The lawsuit, filed by Houston resident Mehdi Cherkaoui on behalf of himself and his two minor children, asks a federal court to intervene before the program’s upcoming application deadline and allow Islamic schools to participate in the program.
Texas Education Freedom Accounts Program Overview
The Texas Education Freedom Accounts program was created by the Texas Legislature in 2025 through Senate Bill 2.
The program establishes Education Savings Accounts (ESAs) funded with state tax revenue. Eligible students may receive approximately $10,474 annually to cover tuition and other educational expenses at approved private schools or service providers.
Under the statutory framework, students qualify based on residency in Texas and eligibility to attend a Texas public school. Parents then direct the funds toward educational expenses, including private school tuition, textbooks, tutoring, and other approved services.
Private schools seeking to participate must meet several requirements outlined in Texas law. These include operating in Texas, maintaining accreditation through a recognized accrediting organization, operating for at least two years, administering nationally norm-referenced assessments, and complying with applicable health and safety laws.
The law also explicitly allows religious schools to participate in the program, reflecting the program’s design as a parent-directed funding model in which families select the school their children attend.
Attorney General Opinion Clarified Comptroller Authority
Shortly after private schools began applying to participate in the Education Freedom Accounts program, questions emerged regarding how eligibility determinations would be made.
In December 2025, Acting Comptroller Kelly Hancock (R) requested a legal opinion from Attorney General Ken Paxton (R) asking whether schools could be excluded from the program if they were connected to organizations designated under Texas law as foreign terrorist organizations, transnational criminal organizations, or foreign adversaries.
In January 2026, Paxton issued Opinion KP-0509, concluding that the Comptroller has exclusive statutory authority to determine which private schools are eligible to participate in the program.
The opinion also stated that eligibility decisions may consider whether a school violates “other relevant law,” including laws related to material support for terrorist organizations or restrictions involving foreign adversaries.
As previously reported, the opinion emphasized the state’s interest in ensuring that taxpayer funds are not directed toward entities that may violate such laws.
State Legal Actions Involving CAIR
Around the same time, the Texas Attorney General’s Office initiated a separate legal action involving the Council on American-Islamic Relations (CAIR) and related entities.
That lawsuit alleged connections between certain organizations and groups that the state has identified as foreign terrorist organizations. The litigation is ongoing and focuses on the enforcement of state laws related to national security and foreign influence.
Although the lawsuit involving CAIR is separate from the administration of the Education Freedom Accounts program, the issues became connected when state officials raised concerns about whether certain schools had hosted events associated with organizations involved in the dispute.
Those concerns became part of the broader conversation surrounding which schools would ultimately be approved for participation in the school choice program.
Parent Lawsuit Alleges Islamic Schools Were Excluded
Against that backdrop, Mehdi Cherkaoui filed a federal civil rights lawsuit alleging that Islamic schools have effectively been excluded from the Education Freedom Accounts program.
The complaint centers on Houston Qur’an Academy Spring, an Islamic K-12 school located in Harris County, where Cherkaoui’s children attend school.
According to the lawsuit, the school meets all statutory eligibility requirements for participation in the program. The school is accredited by Cognia, has operated for multiple years, and provides a full academic curriculum with standardized testing.
Despite those qualifications, the lawsuit states that the school has not been included on the list of approved schools maintained by the Comptroller’s office.
The complaint also alleges that, as of early 2026, hundreds of private schools across Texas had been approved for the program, while no accredited Islamic schools had been included.
Because the program requires parents to select from the list of approved schools when submitting their application, the plaintiff argues that Muslim families whose children attend Islamic schools are unable to access the program’s benefits.
Constitutional Claims Raised in the Lawsuit
The lawsuit raises several constitutional claims under federal law.
The plaintiff argues that excluding Islamic schools from the program violates the Free Exercise Clause of the First Amendment by denying Muslim families access to a generally available public benefit because of their religious identity.
The complaint cites several U.S. Supreme Court decisions involving school choice programs and religious institutions, including Espinoza v. Montana Department of Revenue and Carson v. Makin. Those cases held that states generally cannot exclude religious schools from otherwise neutral education benefit programs solely because they are religious.
The lawsuit also raises Establishment Clause claims, arguing that the alleged exclusion of Islamic schools while other religious schools participate amounts to denominational discrimination.
Additionally, the complaint includes claims under the Equal Protection Clause of the Fourteenth Amendment, alleging that Muslim families are being treated differently from other families whose children attend private religious schools.
Due Process and Administrative Authority Issues
Another component of the lawsuit focuses on how eligibility determinations are made under the Education Freedom Accounts statute.
The complaint argues that the provision allowing schools to be excluded under “other relevant law” does not clearly define what types of conduct or associations would justify exclusion.
According to the filing, this lack of specific standards creates the potential for arbitrary enforcement or inconsistent interpretation. The lawsuit also asserts that schools may be excluded based on alleged associations with organizations without a formal adjudication or individualized findings of unlawful conduct.
Financial Impact on the Plaintiff
The plaintiff states that he currently pays approximately $17,910 per year in tuition for his two children to attend Houston Qur’an Academy Spring.
If the school were approved for participation in the Education Freedom Accounts program, the family could receive roughly $10,474 per child annually, or about $20,948 total.
Because the school is not listed among approved participants, the plaintiff argues that he cannot apply for funding and must continue paying tuition out of pocket while other families participating in the program receive financial assistance.
Emergency Relief Requested Before ESA Deadline
The lawsuit seeks emergency relief from the federal court before the program’s application deadline of March 17, 2026.
The plaintiff is requesting a temporary restraining order and preliminary injunction that would require state officials to process applications from Islamic schools and allow them to participate if they meet the statutory requirements. The complaint also seeks a declaration that the state’s actions violate the First and Fourteenth Amendments and requests nominal damages and attorneys’ fees.
What the Case Could Mean for Texas School Choice Policy
The case could have significant implications for how Texas administers the Education Freedom Accounts program.
If the court determines that the exclusion of Islamic schools violates federal constitutional protections, state officials may be required to modify how eligibility determinations are made for private schools participating in the program.
Conversely, if the court upholds the state’s authority to exclude schools based on national security concerns or other legal restrictions, the decision could affirm broad discretion for state officials in determining which schools may participate in publicly funded education programs.
As the program moves through its first application cycle, the lawsuit highlights the legal and constitutional questions that can arise when school choice policies intersect with national security concerns and religious liberty protections.
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