In a surprise deal, embattled Indiana Virtual School and its sister school to close amid scandal

The virtual charter school that sparked statewide scrutiny of online education has quietly negotiated a deal to close, avoiding a possibly heated public hearing about its enrollment scandal.

The tentative agreement between Indiana Virtual School, its sister school, and its oversight agency, Daleville Community Schools, comes several months after allegations emerged that the long-troubled charter network enrolled thousands of inactive students.

Under the deal — which was approved by the two charter school boards Monday and awaits approval from Daleville — Indiana Virtual School would close at the end of September.

Its students could choose to transfer to its sister school, Indiana Virtual Pathways Academy, which would shut down at the end of the 2019-20 school year. The schools — which were the subject of a 2017 Chalkbeat investigation — enrolled more than 7,000 students between them at the start of this past school year, with thousands of students churning through the schools throughout the year.

In an unexpected twist, the proposed agreement also revealed that the virtual charter schools miscalculated and overpaid an administrative fee to Daleville by $650,000 — an issue that the schools raised only after Daleville started discussions about revoking the charters. The deal calls for the school district to repay the funds.

The proposal would require the online charter school to purge its rolls of inactive students in its final year of operations, stop enrolling new students after the school year starts, and open its books to its oversight agency. Indiana Virtual Pathways Academy would be required to prove that it is regularly checking in with students, tracking individual student progress, and maintaining certain student-to-teacher ratios.

The process for transferring students to new schools after Indiana Virtual Pathways Academy closes was not immediately clear from the agreement Monday.

Opening in 2011 and 2017, Indiana Virtual School and Indiana Virtual Pathways have been among the most controversial of a wave of virtual charter schools that have opened in Indiana. In addition to their enrollment issues, the schools have taken heat for their dismal academic outcomes, with Indiana Virtual Pathways Academy graduating just 2% of seniors.

Thomas Burroughs, an attorney for Indiana Virtual School and Indiana Virtual Pathways Academy, declined to comment before the Daleville Community Schools board votes on the agreement. The board is expected to take up the issue Wednesday night, in lieu of a public hearing where Indiana Virtual School was supposed to respond to Daleville’s accusations.

If approved, the agreement would allow the virtual charter schools to sidestep the charter revocation process — a tradeoff that could bring a closer watch but few answers to the problems that plagued the troubled schools.

Burroughs had told Chalkbeat that Indiana Virtual School wanted to avoid “mudslinging” in a public hearing, preferring to hash out a settlement between lawyers behind closed doors.

In fact, the charter schools appear to have held Monday’s meeting without proper notice — a potential violation of the state’s open meeting laws. Indiana Virtual School posted a notice on its office door for an executive session to discuss the matter privately, but the schools did not list the board meetings that followed for the votes on the closure agreement.

An attorney for Daleville contends that the agreement does not let the virtual schools off the hook for their poor performance and potential violations of their charters. Instead, she said the arrangement would force the charter schools to be more transparent and better serve the schools’ thousands of students during the wind-down.

“This is a better situation, because we’ve been able to specify how we’re going to go about making sure everything is done the right way,” said Sara Blevins, a partner at Lewis Kappes, an Indianapolis law firm representing Daleville.

In February, Daleville started the process to revoke the online schools’ charters. In addition to the thousands of students who weren’t signed up for classes or didn’t earn any credits, Daleville noted the schools’ failure to comply with certain requirements on annual audits, standardized testing, and special education.

Virtual school officials called the accusations inaccurate, but they have not explained their defense and missed deadlines to make their case to stay open.

If the schools violate the terms of the agreement and fail to address them, Daleville could eventually move to revoke the charters again.