In one year, a tiny rural Indiana school district more than tripled its enrollment, growing to nearly 1,000 students. But more than 800 of those students learn exclusively through a virtual education program — and despite fully funding it, the state has no way to know how well it’s doing.

State officials, researchers and the public can’t easily determine if students are learning because Union Schools’ virtual program and others like it are not distinct schools. Their student performance, enrollment, teaching staffs, and other data are rolled into existing brick-and-mortar schools.

Indiana lawmakers are starting to pay attention to the rapid growth in Union and realizing that programs like these could come at considerable cost. Unexpected growth in public schools is throwing off school funding estimates. Although virtual education programs are only one contributing factor, they are part of a larger shortfall creating a stir during this year’s legislative session.

There’s no way of tracking exactly where these virtual programs exist, how much they cost, or how students are performing.

As a result, lawmakers are taking steps to learn more about districts that pursue in-house virtual education programs and how pervasive they are across the state. District-run programs like the one at Union have operated largely unnoticed, even as online charter schools have shown dismal academic results and attracted scandal in Indiana and across the country.

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Despite that, districts are using online learning to strategically expand their offerings — and as a profit stream.

“That’s where we’ve seen the greatest growth in K-12 online learning, is with the district-based programs,” said Michael Barbour, a researcher and professor from Touro University in California. “Districts have been losing (students) to these cyber charter schools for so long that they essentially want to develop an in-house version.”

Superintendent Allen Hayne said Union Rockets Virtual Academy has given his students more opportunities for learning. Even though Union is a tiny rural district about 70 miles northeast of Indianapolis, the program attracts students from more than 70 counties across the state. The boost in students has kept the district afloat financially as residential enrollment has waned, a trend for rural districts across the state.

Union operates its program with K12 Inc., one of the largest virtual education providers in the country. K12 also operates three Hoosier Academies charter schools, one of which is set to close in June.

Union’s growth came as a surprise to state lawmakers — and it was concerning enough that they’re crafting legislation that would require schools to submit yearly reports about their in-district virtual programs.

Rep. Tim Brown, chairman of the House Ways & Means Committee, last week amended Senate Bill 189, focused on school funding, to add in requirements for district-based virtual programs. By October, districts with these programs would have to report virtual program enrollment, total district enrollment, what grades the virtual students are in, where they live, and how much of their day is spent in a virtual learning program.

“We don’t know what we don’t know,” Brown said. “We need some data before you can necessarily take an analysis of what you think should happen in the future.”

The lack of distinct data on in-house virtual programs, Barbour said, means there’s almost no evidence that shows whether they are working.

“We have no easy way of discerning how the kids are doing compared to other online programs or compared to their brick-and-mortar counterparts because they are masked by everybody else,” Barbour said.

What we know about virtual education comes from research on virtual charter schools. On the whole, statewide virtual charter schools have shown poor student achievement: Every full-time Indiana online charter school received an F from the state in 2017.

Read: Gov. Eric Holcomb says Indiana’s low-rated online charter schools need ‘immediate attention and action’

But there are ways for districts to be more transparent. They can establish a separate school, which would allow their results to stand on their own.

Wayne Township has long had a separate, full-time online school, which primarily serves students who live within an hour of the district. Achieve Virtual Education Academy has existed in some form since 1999, starting as a distance-learning program. This year, the school enrolled 220 students, and in 2017, it was rated a D.

All of Achieve’s state data — test scores, graduation rate, enrollment, teacher evaluations — are available through Indiana’s state data website.

It’s still too early for Union to know how its virtual students are doing — because they just started, they haven’t tested yet. But the program has been popular, Hayne said. He gets phone calls just about every day from parents asking to enroll their students, and more than 200 students are on a waiting list.

Part of the reason Union pursued a virtual program was financial. The district needed to attract more students, and this was an easy way that also allowed them to expand course offerings for students living and attending school within the district.

The financial incentive for creating a district-run virtual program instead of becoming a charter school authorizer is appealing — and it offers the district more control.

First, authorizers can only collect up to 3 percent in fees from schools they oversee. Union’s contract with K12 Inc. nets them 5 percent. And unlike in online charter schools, virtual students in district programs get 100 percent of the state funding that traditional schools receive. Virtual charter schools get only 90 percent.

Overall, Hayne said Union ends up with about a few hundred thousand dollars.

“It kind of did a stop-gap measure for us. We’re not rolling in the money, to say the least,” Hayne said. “It kind of made us break even within our budget.”

Union’s strategy isn’t the only way to run a virtual program. Decatur Township, on the southwest side of Indianapolis, intentionally keeps its program small and mostly local, enrolling students from within 25 miles of district boundaries.

Decatur Township’s “MyLearning Virtual” program has been around for almost two years and currently enrolls 57 students, said assistant superintendent Nate Davis.

“We really don’t have any plans for major growth,” Davis said. “What we really want to do is use it … for a specific niche population within our school community that needs an alternative to a brick-and-mortar option.”

But as with Union, information about Decatur’s virtual enrollment size or student achievement isn’t distinct and isn’t available to the public.

That’s where Brown’s amendment would come in.

Still, the bill is currently in limbo. It’s one of two school funding bills lawmakers are negotiating during these last couple of weeks of session. It’s unclear at this point which version will move ahead. The virtual education issue didn’t receive much debate.

Chalkbeat’s investigation into Indiana Virtual School, a fast-growing online charter school that spent little of its state dollars on teachers and instruction, has spurred some interest from lawmakers in virtual education, but their attempts to make change so far have failed. Three other bills proposed this year that would have tightened rules for charter school authorizers and limited growth based on test scores were never given a hearing.

The financial incentives from the state, both for IVS and district-based virtual programs, means it’s likely that virtual education will continue to grow in Indiana.

Brown’s amendment could bring the state information about growth, but it wouldn’t do much to inform the debate about whether full-time virtual education is good for students. Rep. Greg Porter, an Indianapolis Democrat who also wants the state to look more closely at virtual schools and ratchet up consequences for low graduation rate, said the status quo isn’t enough.

“It is imperative that we have some transparency when it comes to virtual education,” Porter said. “Hopefully this summer, or next year when we do the budget … we’ll look at it in a hard way.”