A few years ago, tiny Union School Corp. in Modoc, Indiana was on the verge of closure.
In 2016-17, the district, which is located southeast of Muncie near the Ohio state line, had just 256 students in grades K-12.
But the school board began working with a private education corporation, K12, to start a virtual or online program — called Indiana Digital Learning School.
Total enrollment jumped to 937 in 2017-18 and an eye-opening 3,371 students statewide in 2018-19, according to the state Department of Education.
Indiana Digital Learning School is an online public school program of the Union School Corp. K12 Inc., a for-profit company that provides online education, is under contract to the school district to operate its virtual programs.
Union School Corp. now consists of two brick and mortar schools and three virtual schools.
INDLS is an arm of the public school district. It is not a virtual charter school, which must have an authorizer and be accountable to that authorizer under Indiana law.
The state has less of a role with charter schools, whether online or brick and mortar, said Adam Baker, Indiana Department of Education spokesman. Some Indiana virtual charters have come under fire for inflated enrollment, over-payment of state tuition support dollars and failure to educate children.
But whether they are public school district-run or charter schools, virtual schools are changing the way public education is delivered to thousands and prompting state officials to take a closer look at the rules that govern them.
The state Board of Education now wants to provide more oversight, and state legislators also have taken steps to better regulate virtual schools, including virtual charters, with more scrutiny likely in the 2020 General Assembly.
Liz Sliger, INDLS head of school, said the online program "absolutely" is held to the same state accountability requirements as traditional brick-and-mortar public schools.
"We have very strong engagement policies," she said. "We collect attendance data every day." If a student is not attending, "We're reaching out ... to find out what is going on."
The online program has a student support team of advisers to ensure students are participating in classes. "We're just not a place where you can sign up and not go," she said.
The program consists of a full day of 'live' classes, "so we expect students to log in" and participate, she said. If students have outside appointments, such as medical, "We work with them."
Indiana Digital Learning School employs 230 staff, including 100 certified teachers, she said.
The Union School Board has capped enrollment at 4,000 for 2019-20 to ensure it has adequate staff and equipment to meet the needs of students, said Mike Huber, Union School Corp. superintendent.
Virtual charters under fire
Recent revelations about two Indiana virtual charter schools have prompted state education officials and legislators to call for greater accountability.
Earlier this month, the Indiana Board of Accounts stated in an affidavit that Indiana Virtual School and Indiana Virtual Pathways Academy have repeatedly reported false average daily membership numbers, or ADM, and that false reporting allowed them to receive too much tuition support. Daleville Community Schools was the charters' authorizer.
As a result, the Indiana State Board of Education’s decided on July 10 to reduce the schools’ ADMs by 50 percent for the 2016-17, 2017-18 and 2018-19 school years. The state is cutting off public dollars to both virtual schools until it recovers more than $47 million overpaid those three years. And recovering those millions may prove difficult.
Indiana Virtual School was already set to close this fall, and plans called for Virtual Pathways Academy to close in a year. The state may have to pursue other remedies to recover those funds, including legal action.
The State Board of Education also wants to have more oversight of virtual charter schools.
Legislators have taken steps in response to some of the ongoing problems, including poor student outcomes. Under one change, state funding for students in virtual programs will be reduced to 85 percent of what it is for students attending traditional public schools.
Also, new legislation passed this year requires virtual programs to withdraw from a virtual school a student who is a habitual truant. Starting in 2020-21, that state requires all students and their parents to complete a mandatory orientation process before they can enroll in a virtual school.
In addition, the legislation [Senate Bill 567]:
• Requires virtual charter schools to annually report how they determine attendance rates.
• Gives the state Board of Education rulemaking authority for tracking and monitoring student participation and attendance, ongoing student engagement, counseling policy requirements and employee policy requirements and professional development requirements.
• Sets threshold guidelines for traditional public schools in creating a separate virtual education program based on percentage of education delivered virtually.
The law also requested establishment of a summer study committee to look at virtual school finances, but that did not happen.
State Sen. Jeff Raatz, R-Centerville, an author of SB 567, agrees the Legislature must do more to provide greater accountability and close loopholes.
The case of Indiana Virtual Schools and Indiana Virtual Pathways Academy "is tragic both for the system itself" as well as the overpayment of taxpayer dollars, he said.
It's a priority for Raatz, he said. He anticipates the Legislature "will take take a look at it and see if there are any other safeguards we need to put into place to make sure that never happens again."
Those responsible need to be put on notice "this state isn't going to put up with this," he said.
Should there have been more oversight up front? "Certainly that very well could be the situation," he said. "There were some things missed — there is no doubt about it."
Those lines of responsibility need to be reviewed and strengthened, he said.
But not all virtual education is performing poorly, he said: "Virtual education is certainly going to be part of the future. It's critically important that we get this correct and continue to move forward."
Raatz noted that many students who use virtual schooling have not fared well in traditional settings and begin their virtual careers deficient in high school credits. That's something that also must be reviewed, he said.
State Rep. Bob Behning, R-Indianapolis, chairman of the House Education Committee, agrees that with today's technology, more and more people will receive virtual education.
"The reality is, if used correctly, it can be very helpful in providing quality instruction," he said. "The problem is we have to make sure it's quality and actually being used."
The new law does address some of the issues and the state Board of Education "is starting to look into some things," he said.
The new law also clarifies that traditional public schools cannot authorize virtual charter schools, Behning said. Districts can have their own virtual programs and they can authorize traditional charter schools.
Adam Baker, Department of Education press secretary, said that what's needed in virtual education is more accountability, both academically and financially. The Legislature has strongly supported school choice options in recent years.
Parents should have a voice in their child’s education, "but if there’s one consequence we have seen of choice in Indiana, it’s the fact that there are few parameters. Some have even referred to it as the Wild West," Baker said.
The Department of Education has maintained that "if you receive public funding, you should be held to the same standards," he said.
The state DOE proposed language in a bill last year that was never heard, he said.
"We proposed language to a state Board of Education committee last year that never went anywhere. All along we have been watching education expand, rubber stamping nearly every move, and then when it goes awry we sit back and ask ourselves 'what happened?'" Baker said.
Huber, Union School Corp. superintendent, said the partnership with K12 succeed past all expectations. The first year, officials expected about 400 and had 740 enroll in the virtual program. The second year, they had just short of 3,000 students in the virtual program.
"It's definitely been a benefit not just financially ... but also to our students in-building," Huber said. Traditional students have access to K12 online courses that the district otherwise could not offer.
While the virtual school has helped the district financially, most of the state funds generated by INDLS students goes to K12, much of it used to operate the virtual program.
As part of the contract between Union and K12, Union retains 5 percent of state funding for administrative oversight, while K12 receives the remainder of funds generated by the virtual students.
In 2018-19, Union School Corp received $23.6 million in total state funding, including basic tuition support and other categories, according to the state Department of Education.
INDLS students come from almost every Indiana county, including 56 from Vigo last year, and many of its students live in rural areas. Families choose INDLS for reasons that range from academic struggles to academic honors; they may have social or physical difficulties; they may need flexibility to pursue certain interests. They might have been bullied, Sliger said.
The success of the partnership between Union and K12 demonstrates "there are certain students all over the state who need something different and they were looking for an opportunity; they need a well-run virtual school," Sliger said.
No matter the type of school, some are good and some are not as good, she said. "If anyone is concerned about the quality of virtual education, I would invite them to come see what we do. They are absolutely welcome to come," she said.
Sue Loughlin can be reached at 812-231-4235 or at email@example.com