what's next?

Policymakers agree virtual schools should get more teachers and less money. Will they make it happen?

PHOTO: Shaina Cavazos
A view outside of Indiana Virtual School's office, located in an office park at the northern edge of Marion County.

After Chalkbeat revealed widespread low-performance and unusual spending at Indiana Virtual School, there were no immediate plans to change how the fast-growing but relatively little-known online charter school operates.

Rep. Bob Behning, the House Education Committee chairman who is one of Indiana’s most influential education lawmakers, has not commented after repeated requests for an interview.

Senate Democrats have no education priorities specified for the upcoming year.

And Senate Republicans and House Democrats haven’t yet released their 2018 plans. Sen. Dennis Kruse, the Republican chairman of the Senate Education Committee, said he largely thought Indiana’s charter laws were fine, although he was open to tweaking aspects of the law — such as whether authorizers of failing charter schools should be allowed to open additional schools.

But national and even local charter school advocates — including those who could affect public policy — agree changes need to be made at Indiana Virtual School and online charters more broadly across the state. Some were blunt in their assessment of the school, which since 2011 has enrolled thousands of students and failed to graduate most of them. It also has a barebones teaching force, low test scores, and two F grades from the state.

“The whole thing is a mess,” said Tony Walker, a pro-charter school Democrat on the Indiana State Board of Education.

Read: As students signed up, online school hired barely any teachers — but founder’s company charged it millions

And the school’s problems aren’t limited to academics. Walker also called out the school’s lenient attendance policy, lack of real-time teaching and choice not to provide computers to students.

“Them not having an online platform that permits them to have live courses should be a deal-breaker … You should never have an online school that exists without that,” he said. “You should never have an online school that’s chartered that does not provide the means to access the school to its students. If you’re not giving your students laptops, then you shouldn’t exist.”

What’s more, Thomas Stoughton, Indiana Virtual’s founder, previously headed a for-profit company that charged millions of dollars in management fees and rent to the school while he was school board president. Stoughton is also leading the school’s growth — a second Indiana school opened this year, and plans for Michigan and Texas schools are in the works.

Although Indiana’s legislative session won’t begin until January — and it’s looking like a year where education won’t be center stage — Democrat and Republican lawmakers indicated interest in making changes to laws governing virtual schools, but nothing more.

Doing nothing just isn’t acceptable, said Rep. Terri Austin, a Democrat from Anderson and a former educator.

“Surely given the statistics the General Assembly has an obligation to take a look what’s happening,” she said.

Walker said Indiana Virtual School’s student-teacher ratio jumped out at him. At the end of last school year, Indiana Virtual had one teacher for every 222 students.

Now, Indiana Virtual and the new Indiana Virtual Pathways Academy enroll about 6,332 students, served by 40 teachers, which makes the student-to-teacher ratio 158-to-1. The national average for online charter schools is 30-to-1, according to the National Education Policy Center.

“There’s absolutely no justification or reason that I can think of to permit a school to have a 221-1 faculty-student ratio,” Walker said. “That’s just ridiculous … There needs to be substantially more of the funds appropriated in the direction of instruction than I think this school has.”

Rep. Scott Pelath, the long-time leader of the House Democrats who stepped down from that role last week, was also surprised by the student-teacher ratio, even more surprised than he was by the tens of millions of dollars the state has set aside to fund the schools.

“That struck me as just outrageous, and I would think the public would think it was outrageous,” Pelath said. “Particularly when virtual schools are used as a substitute in places where you maybe have a lot more at-risk kids that need more attention, not less.”

Indeed, more than 80 percent of the students at Indiana Virtual qualify for meal assistance, but otherwise their demographics closely mirror those of the state — majority white, with relatively small populations of English-learners and students with special needs. The school says many of its students have been expelled from previous schools, and they say their students’ struggles are part of the reason graduation rates and test scores remain low.

But Karega Rausch, a former member of the Indiana Charter School Board who now works for the National Association of Charter School Authorizers, said online charter schools as a whole shouldn’t use student characteristics as an excuse. The group even has an entire set of online school-specific policies states should adopt in light of their poor performance.

“Just having lots of low-income kids is not a justifiable reason to not teach them well,” Rausch said. “Just having a lot of kids that may be mobile is not an excuse for not teaching them well. Traditional public schools and charter schools are finding ways of serving those kids at high levels.”

While traditional schools should serve as a model for instruction, Indiana’s school funding formula creates problems in a virtual environment. For schools like Indiana Virtual that have few barriers to entry and inconsistent attendance reporting practices, it can be hard to know if students who are enrolled are actually being educated. Yet schools get more money for every student they enroll.

Kruse and Walker, as well as national advocates, said they would support a funding model based on how much work students do, rather than whether they are on a school’s books on Count Day. New Hampshire and Florida already use this kind of system.

“There needs to be a different funding formula for these schools,” Walker said. “They should not be funded on a per-student basis like brick-and-mortar schools … it becomes a profit mill.”

An analysis from Florida Southwestern State College School of Education last year found that funding based on students finishing classes in virtual schools cost the state less money than the more traditional per-student model. Walker called on lawmakers to consider this change and put it into law “sooner rather than later.”

Pelath said based on what he’s learned about online schools, he doesn’t see them as a good substitute for traditional education. (Former state Superintendent Glenda Ritz agrees.)

“The oversight and accountability is not anywhere close to what we would have in traditional education,” Pelath said. “It’s entirely reasonable that some virtual experiences can be part of the larger overall experience, but as a substitute they are just woefully inadequate.”

The first step is to stop growth immediately, he said. Virtual schools enroll about 12,000 students across the state — about 1 percent of all students — and the number has been growing each year.

As far as upcoming legislation, Pelath was less sure, and new House Democrat leadership will certainly play a role in the caucuses’ goals for next year. Pelath was optimistic change could happen, but he was also realistic about the fact that a Republican supermajority in the House can make it difficult to get Democrats’ bills through.

“I think there’s a very good chance of that,” Pelath said in regards to possible legislation on virtual schools in the upcoming session. “Whether those things come in the form of originally introduced bills, of which there’s a risk of them staying bottled up in committee, or in the form of amendments to alter legislation that is moving in the process …This is going to have to be a debate.”



Indiana online schools

Indiana lawmakers aren’t cracking down on virtual charter schools despite calls for change

PHOTO: Shaina Cavazos
A Hoosier Academy Virtual teacher keeps track of answers during a math review game.

Indiana lawmakers have killed three attempts to tighten the state’s charter school authorizing laws, even after Gov. Eric Holcomb called for improved accountability of troubled online charter schools.

A Chalkbeat investigation of Indiana Virtual School last year revealed how state law doesn’t go far enough to hold operators and authorizers of online charter schools accountable. The probe found that Indiana Virtual posted dismal academic results, hired few teachers, and had spending and business practices that raised ethical questions.

Special report: As students signed up, online school hired barely any teachers — but founder’s company charged it millions

But with proposals to tighten regulations facing pushback from influential education advocates, Republican lawmakers — many of whom benefit from online schools’ lobbying and campaign contributions — say there’s little interest in making changes.

“I’m surprised myself,” said Sen. Dennis Kruse, the Republican Senate Education Committee chairman who authored one of the charter school bills. “People from all different walks of life had concerns about different parts of the bill. Nobody came to me and said, ‘This is a great bill, go ahead and proceed with the bill.’”

Still, Holcomb is taking other steps to strengthen virtual charter school policy. With the Indiana State Board of Education, Holcomb’s team has been collecting information on best practices in virtual schools across the country.

PJ McGrew, the governor’s education policy director, said he hopes to have a plan to revise virtual school policies for the state board to consider in the spring. It could take about a year for the board to change that policy if they decide to move forward.

Lawmakers’ hesitation isn’t really surprising: Indiana has made sweeping changes to expand school choice, and Republican leaders have seldom supported laws that would restrict choice — even when issues are raised.

Rep. Bob Behning, the chairman of the influential House Education Committee who has long advocated for charter schools and new school models, said he doesn’t want to “jump into something, making a judgment, without knowing what the answers are.”

He also pointed out that it isn’t always clear how the state should hold schools accountable in practice because education law can be difficult to enforce: “There is no education police.”

“I definitely see there are some alarms that we need to be focused on and alerted to,” Behning said. “But there are similar alarms in traditional public schools going off all over the place as well. That’s the place I think we do struggle with. At what point in time is it appropriate for us to intervene?”

None of the bills proposed by lawmakers this year dealt directly with virtual schools, applying instead to charter schools as a whole. And none of them received any hearings.

Kruse’s proposal, Senate Bill 350, would have effectively prevented struggling online charter schools — or any charter school — from easily replicating. It would have stopped an authorizer from offering a new charter to an existing organizer unless its current students are achieving academically.

Three of Indiana’s largest online charter schools, including Indiana Virtual School, have recently opened second schools, which could help them stay in business if their first schools get shut down after years of poor performance

Two other proposals from Democrats, Senate Bills 315 and 406, went much further in dictating the results charter schools must show to enroll new students and open new schools.

Sen. Mark Stoops, a Bloomington Democrat who proposed Senate Bill 315, said for his caucus, examining whether charter schools need more regulation and oversight has been a recurring priority.

“It isn’t a difficult question,” he said. “It just needs to be done.”

But lawmakers would be up against the charter school movement’s money and influence.

Indiana lawmakers, including Behning and Kruse, have seen campaign contributions from online education companies. K12 Inc., one of the largest online education providers in the country, has given more than $90,000 to Indiana Republican races since 2006, according to the state campaign contribution database. Connections, another large national provider, has given more than $20,000.

Those online providers, who operate five online charter schools in Indiana, also have spent tens of thousands of dollars each year for the last decade lobbying lawmakers.

Indiana Virtual School has also recently started lobbying lawmakers in Indiana. Tom Stoughton, the founder of Indiana Virtual School, was listed as a registered lobbyist for the school in January, even as school officials say he has distanced himself from the school. Stoughton’s involvement with the school’s for-profit management company has raised ethical questions.

In the first filing period for 2017, Indiana Virtual School spent almost $12,000 on lobbying, according to data from the Indiana Lobby Registration Commission. In 2016, IVS spent a little more than $13,300.

Prominent charter school advocates can wield influence outside of lobbying, too. They have said they fear more prescriptive laws could hem in successful schools and authorizers, even though they have agreed that virtual schools, specifically, need more attention and oversight.

“Specific rules written to restrict the decisions of authorizers will not transform bad authorizers into high-quality authorizers,” David Harris, CEO of The Mind Trust, told Chalkbeat in January.

The National Association for Charter School Authorizers recommends that states consider virtual-specific policies, such as completion-based funding, making enrollment more selective, or even making them a different kind of non-charter school so enrollment and governance can be more controlled.

Indiana falls short when it comes to virtual school regulation, according to the association’s most recent report, even as the state is praised for having the strongest charter school laws in the nation. For the third year in a row, the group ranked Indiana No. 1.

Mike Petrilli, executive director of the Fordham Foundation, a conservative think tank that supports access to charter schools, has spoken in favor of making virtual schools a separate school type.

“We’ve got to turn this on its head,” Petrilli said. “It would be hard to do it within the general charter school rules which say you’ve got to take everybody … What we have learned is the charter school model and online learning are not a good fit for each other.”

Indiana online schools

Charter advocacy group ranks Indiana’s law No. 1, but calls for greater virtual school accountability

For the third year in a row, Indiana was recognized by a leading charter school advocacy group for having the nation’s strongest charter school law, but the state was cited for failing to take action to properly regulate online charter schools.

The National Alliance for Public Charter Schools has ranked Indiana No. 1 since 2016 based on how well state law corresponds with the Alliance’s model law. Specifically, Indiana is praised for not capping charter schools’ growth and for directing more money to charter schools to make up funding gaps compared to traditional schools. The state was lauded for its “remarkable growth and development” in charter schools since they started in 2001.

The high rating by the group, whose purpose is to promote and support charter school growth, is the latest indication of Indiana’s commitment to allowing outside groups develop and run public schools independent of school districts. Such pro-charter policies have been supported for years by Republican legislators and governors.

But even in its praise for the state’s pro-charter policies, the group found fault with Indiana’s oversight of virtual schools. The group called on the state to raise the bar for online charter schools, which have had a track record of abysmal performance not just in Indiana, but across the nation.

Indiana has yet to include most of the Alliance’s recommendations regarding full-time virtual schools in state law. The Alliance’s report says Indiana law includes a “small number” of the Alliance’s virtual school provisions, but it still has work to do in “strengthening accountability for full-time virtual charter schools.”

Indiana is not alone — no states include all of the online charter school provisions recommended by the Alliance, and many were called out for failing to include any at all. Although the Alliance advocates for increasing charter schools across the country, it also emphasizes school quality.

In a recent report, the Alliance outlined policies to help regulate virtual schools. They include setting maximum enrollment levels for virtual schools and not allowing them to exceed that enrollment in subsequent years unless they could prove students were learning. States are also encouraged to create a performance-based funding system, where schools get money based on what students achieve, not on whether they are enrolled. Both ideas have received initial support from Indiana lawmakers and policymakers.

The 2018 alliance ranking follows a Chalkbeat investigation identifying low performance at Indiana Virtual School and questionable business and spending practices. Despite Indiana Virtual’s F grades and subpar graduation rate, the state continues to allocate millions of dollars to it. In September, Indiana Virtual opened a second school. Almost every online charter school in Indiana received an F grade in 2017, and like Indiana Virtual, several others have also recently opened additional schools.

Special Report: As students signed up, online school hired barely any teachers — but founder’s company charged it millions

Earlier this month, two state senators introduced bills to tighten charter school oversight laws and prevent poor performing schools from multiplying, but no hearings have been scheduled yet. Gov. Eric Holcomb, a Republican, has committed to working with the state board to look into virtual schools in Indiana, but details of his policy plans are not yet clear.

Learn more about Indiana Virtual School and online charters in the state here.