A state committee is recommending lawmakers change how Indiana grades high schools and is calling on the General Assembly to address a legal loophole that lets schools write off struggling students as home-schoolers.

If passed by lawmakers, high schools would be graded largely on whether students are enlisted, employed, or enrolled in post-secondary education when they graduate. The remaining 30% would measure whether the school is at or above the average passing rate for the state’s standardized test and how many students meet graduation requirements

The approach — approved by the committee of educators and lawmakers on Tuesday — was meant to better align with the state’s new graduation pathways, which offer Indiana high schoolers multiple options for completing diploma requirements.

But after some debate over whether to include school’s graduation rate at all, the committee is also advising the General Assembly to “review and consider” how it calculates graduation rates.

Last month a Chalkbeat investigation revealed home-school data that suggests Indiana’s lax regulation of home schooling and its method for calculating graduation rates are masking the extent of many schools’ dropout problems.

Under current statute, students who are marked as leaving to home-school are left out of a school’s graduation rate calculation, which can boost the measure and help the school earn a higher letter grade from the state. At the same time, Indiana does little to ensure those students are actually being educated at home.

Bob Behning, an Indianapolis Republican who chairs the House Education Committee, brought up the data during the committee meeting Tuesday, saying he would like to move away from relying on graduation rates to grade high schools.

“[Schools] can manipulate that number relatively easily,” Behning said. “They’re not doing it because it’s what’s best for the student; they are doing it because graduation rate is a big component in the accountability system.”

Emmerich Manual High School in Indianapolis, for example, reported 83 graduates in 2018, six dropouts and 60 students who left at some point during their high school years to be home-schooled — a red flag, experts said. The school reported a 78% grad rate in 2018, up from 69% in 2012.

Instead of relying on graduation rates, Behning suggested rewarding schools whose students complete more than one of the new menu of options under the state’s graduation pathways, whether that’s passing the SAT or ACT, earning a state-recognized credential, or passing the Armed Services Vocational Aptitude Battery test.

The group ultimately decided to continue using the graduation rate, but recommended reducing its weight to 15% of a school’s grade. . Graduation rate currently counts for 30% of school grades, which also factor in test scores and student improvement on standardized tests.

“I have a lot of confidence in the General Assembly being able to take care of these problems without getting rid of the graduation rate,” said committee member Teresa Lubbers, the state’s Commissioner for Higher Education. “I think we need to go on the record saying that it is a problem and that we need to look at numbers of schools … and then figure out what we need to do about it.”

The discussion over graduation rate was only one debate that took place during the more than three-hour meeting on Tuesday. Committee members also argued over whether it is appropriate to judge schools’ test scores as they relate to the state average, so schools who are at or above the average receive full points — a move that would provide a cushion for schools.

Lubbers argued that would allow average schools to get an A rating, when an average score on a grading scale is typically a C. Others members said it’s a more fair approach considering only one-third of Indiana 10th graders passed the state ISTEP exam in 2019. And Indiana could see that the passing rate drop even lower in 2023, when the state switches to instead administering the ACT or SAT.

Indiana State Teachers Association lobbyist John O’Neal told committee members Tuesday that the state’s largest teachers union still had some concerns with the final recommendations, such as no longer including a measurement of student improvement on exams.

The state is switching from using ISTEP to measure high schoolers to using a national standardized exam, either the SAT or ACT. Unlike the ISTEP, students won’t have previous years of ACT or SAT exam data to use to calculate a growth score. After some debate, committee members left the door open for the Indiana State Board of Education to account for growth data, should they figure out a way to calculate it.

The new grading system is meant to rely less on metrics tied to high-stakes testing.

Earlier drafts of the recommendations suggested looking at whether students were enlisted, employed or enrolled in post-secondary education a year post-graduation. But some teachers groups have previously questioned whether it’s fair to heavily weigh school accountability on student’s decisions after graduating. It’s an important distinction that the framework now recommends looking at what students are doing when they graduate.

The committee’s recommendations will go to lawmakers by Oct. 30. The next legislative session begins in January.