Indiana Virtual School began humbly as a small start-up with just nine students, an institution designed to serve students who didn’t fit in a traditional environment.

Almost a decade later, the school and its sister school, Indiana Virtual Pathways Academy, have grown to more than 6,000 students — and they’re facing explosive allegations that many of those students weren’t taking or completing any classes.

The scandals at the schools, which could face closure by their authorizer, Daleville Public Schools, didn’t happen overnight. The online charter schools and their competitors in the fast-growing field have morphed over the past decade, from small programs designed to serve a niche group of students into giant catch-alls for some of Indiana’s hardest-to-serve students.

To date, Indiana has funneled more than $324 million to seven full-time virtual charter schools. But their results — dismal test scores, high turnover, and few graduates — have prompted critics to question whether the schools should receive so much in public funds. The schools have also raised eyebrows because of how few teachers they employ and their relationships with for-profit companies.

But lawmakers have been loathe to regulate them and create harsher consequences if the entities created to oversee them fall short. That could change this year, as lawmakers consider bills that would require student and parent orientations and prohibit school districts from overseeing statewide virtual charters — though those plans, too, were scaled back from stricter earlier proposals.

If virtual charter schools are just now hitting your radar — or even if you’ve been following the debate all along — read on for a look at how we got here.

First, the basics

Schools have long tried to offer students ways to learn outside of traditional buildings, but virtual charter schools, which are public schools that offer students the ability to take classes online, are relatively new. They’ve only been around for a few decades in the U.S.

Some students and parents who sign up for virtual schools say they need the school choice option so they can have more flexibility in their schedules or learning environment, whether it’s because they’re serious athletes, dealing with medical issues, or are looking for support homeschooling.

Typically, students will log in to a website where they can see the classes they are taking and access lessons, which can be live, recorded, or self-paced “modules” students complete on their own. Teachers are expected to check in with students regularly to answer questions, give tests, and ensure students are on track.

Indiana has been a strong supporter of school choice

The education landscape in Indiana was fertile ground for virtual charter schools when the first ones, Hoosier Academy Virtual and Indiana Connections Academy, started as pilot programs in 2009 and 2010. The state has long been friendly to non-traditional schools, and the introduction of virtual schools was buoyed by a series of laws over the past decade that expanded and empowered charter schools and school choice.

In 2011, Indiana’s new Republican majority legislature altered charter school law to allow new authorizers and widespread full-time virtual learning. Lawmakers have since enacted more bills that have been friendly to the schools, giving them additional funding and greater ability to remove students from their rolls.

Growth was rampant…

Virtual charter schools quickly became some of the fastest growing schools in the state, more than tripling in size between 2011 and 2019 to more than 13,000 students.

Enrollment drives funding in Indiana, creating clear incentives for operators to encourage their schools to grow. Charter school authorizers, who get a cut of a school’s funding to support their oversight work, also receive more money as schools enroll more students.

Online charter schools are especially primed to benefit from a “money-follows-the-child” system. Because families don’t have to physically change locations to enroll, the schools can grow more easily and quickly than traditional schools.

Connections and Hoosier Academy grew fast early on, but Indiana Virtual School and its sister school started slowly and shot up in size more recently. Superintendent Percy Clark previously told Chalkbeat the school ramped up recruiting for 2015 with events, social media campaigns, and radio ads. At its height, Indiana Virtual School enrolled and was funded for 3,376 students in 2018, although nearly 10,000 were enrolled in some manner that year.

The ease with which virtual schools can grow and receive more public money has raised concerns for ethics and government transparency experts. A 2017 Chalkbeat investigation revealed that Indiana Virtual School’s founder’s private company charged the school millions in state dollars in management fees and rent, similar to situations that have cropped up at virtual charter schools in Colorado and Pennsylvania.

…And academics suffered

Virtual charter schools learned that more students also brought more challenges.

Over time, the schools attracted a larger-than-expected number of students who were behind academically or dealing with issues that made them harder to educate, such as raising children or managing chronic illnesses. Historically, they’ve received D and F grades from the state.

That’s in direct contrast to students who want to learn at a faster pace and would-be homeschoolers they planned for, said Melissa Brown, head of schools at Connections Academy.

“We grew too fast in years two, and three, and four, and we’re still paying for that quick growth,” Brown said. “There is an ease to enrollment. It is a phone call, rather than getting in the car and driving down the street … to too many people, it feels like it would be an easy solution.”

As Indiana Virtual School grew, some internal structures didn’t keep pace: the school bounced between online learning platforms and employed far fewer teachers than researchers recommend — at one point hitting more than 200 students for every teacher, many of whom were not full-time. The school, like its peers, has struggled to get students to take state tests.

Indiana Virtual School received its third F grade from the state in 2018, one F shy of kick-starting the state’s academic intervention process, a consequence of which could be closure. Indiana Virtual Pathways Academy has yet to receive a grade — too few students were tested last year to calculate one — but it had one of the lowest graduation rates of any public school in the state.

Daleville officials said in a report last month that Indiana Virtual School and its sister school have failed to provide services for students with special needs and have enrolled thousands of students who didn’t complete or weren’t signed up for classes. They have set in motion the process for revoking their charters, which could lead to closure. Officials at Indiana Virtual School did not respond to interview requests for this story.

With few regulations to guide them, the state cut virtual charter schools slack

Virtual charter schools are monitored by “authorizers” — which in Indiana can be a university, the mayor’s office, a school district, or the state charter school board. Authorizers are supposed to make sure charter schools fulfill the academic, financial, and operational promises in their charters, or else the contracts can be revoked. But there are few clear-cut laws or rules that compel the oversight agencies to act.

Consequently, Indiana officials have had the chance to step in and pass stricter rules and laws, but the few attempts have failed. Lawmakers have echoed some school choice advocates, saying they are worried stricter rules on charter schools in general or on authorizers could penalize high-performing schools and possibly limit choices families have.

The best example is how the state board handled Hoosier Academy Virtual. Four straight years of F grades put the school under state board of education scrutiny, kicking off a years-long back-and-forth among state board members, school leaders, and officials from charter authorizer Ball State University over how to handle the situation.

Ultimately, the state board gave Hoosier Academy the benefit of the doubt when it chose to punish Ball State by reducing administrative fees the university received to oversee the school and capping enrollment. Hoosier Virtual only closed a year later — after eight consecutive F grades — because Ball State decided it would not renew its charter.

But low state ratings didn’t keep Hoosier Academies from expanding. Before it closed, its authorizer signed off on a new school aimed at helping students far behind their peers. The move was precedent-setting: All three currently operating charter school networks have now opened additional schools in the past few years even as they received failing grades from the state.

Recent steps might be too little, too late

The state board took slightly firmer action with Indiana Virtual School after Chalkbeat’s investigation, which also found that the school had too few teachers, low test scores, and dismal graduation rates.

Last summer, in response to calls from Gov. Eric Holcomb to act swiftly to improve the struggling schools, state board members formed a review committee. In December, the full board approved recommendations that have, in part, informed two bills now up for debate in the legislature. As the bills stand, the biggest changes would stop school districts from overseeing virtual schools, and require virtual schools adopt new policies to ensure remote students stay engaged with their work.

But although the recent proposals cover far more ground than current regulations, they don’t address some of the other big problems plaguing the schools by directly targeting how they grow and their bottom lines. In fact, lawmakers watered down the bills by removing provisions that would have eliminated authorizer fees and limited the growth of new and chronically underperforming virtual schools — problems that could get worse, state officials say.

“One of my greatest concerns is the exponential growth of virtual charter enrollment in Indiana over the past few years,” said Gordon Hendry, the state board member who chaired the review committee. “It’s like surfing a 70-foot wave — It’s going to come crashing down on us if we don’t do something about it.”

And even though Indiana Virtual School and Indiana Virtual Pathways Academy — arguably two of the state’s most troubled virtual schools — could close if Daleville’s board votes to revoke their charters, Hendry says that’s not a sign the system is working, especially if lawmakers fail to put stricter rules in place for future schools.

“Were laws enforced at the O.K. Corral? Sure,” Hendry said. “But I think it’s more a case study of how the entire system failed.”