SCHOOL CHOICE State Summary Indiana

OVERVIEW

Charters:

Indiana is one of 43 states, including the District of Columbia, that permit charter schools. Indiana’s charter law was enacted in 2001. INdIANA’S ChARTeRS There are currently 75 charters in the state, enrolling an estimated 34,347 students . Year of Charter Law – 2001 NAPCS Ranking of Charter Law – 2 of 43 Indiana does not place caps on charter school growth, but there are Total Charters – 75 restrictions on virtual charter school enrollment. State law permits new charter start-ups, traditional public to charter conversions, and virtual charter schools .

The National Alliance for Public Charter Schools (NAPCS) ranks Indiana’s charter law as among the strongest nationwide (2 nd out of 43 states).

Vouchers or Other State Assistance for Private School Choice:

Indiana offers three private school choice programs:

• The Private School/Homeschool Deduction offers a tax deduction worth up to $1,000 to parents with a child enrolled in a private school or who is homeschooled. The deduction may cover approved educational expenses.

• The Choice Scholarship Program offers a voucher to middle- and low-income families to attend a nonpublic school of their choice.

• The School Scholarship Tax Credit program allows individuals and corporations to claim a 50 percent tax credit for contributions to approved scholarship granting organizations. Students are eligible to receive scholarships if their family income is within 200 percent of the free or reduced-price lunch threshold.

State Laws on Other Forms of School Choice:

Indiana is home to a voluntary open enrollment program through which students may request transfers to other schools or districts.

School Choice | Indiana 1 State Summary Indiana

CHARTER SCHOOLS

History • Public charters have been allowed under state law since PeRCeNT OF STudeNTS eNROLLed IN ChARTeRS 2001 . 2011-2012 • There is no cap on the number of charter schools that can be approved, but there are restrictions on virtual charter school enrollment. 2.7% < 4.2% Indiana u.S. Average • As of the 2013-14 school year, 75 charters were in operation in Indiana, enrolling an estimated 34,347 students .

Details • State law permits new charter start-ups, traditional public to charter conversions, and virtual charter schools. • There are a number of charter authorizers , including local school boards, public four-year universities, the Mayor of Indianapolis, the Indiana Charter School Board, and nonprofit colleges or universities that provide four-year degrees. • All charter school authorizers must submit annual reports to the State Department of Education that include student achievement results, attendance rates, graduation rates if applicable, and student discipline data. • A number of charter-related bills were passed in 2014 that provide charter school networks with greater flexibility to share resources, increase charter authorizer accountability, and allow school districts to trade building space or services to charter schools.

FINDINGS ON CHARTERS IN INDIANA The National Alliance for Public Charter Schools ranks Indiana’s charter school law as one of the nation’s strongest – 2nd out of 43 states . Strengths of its law include the variety of charter authorizers allowed, a clear charter renewal process, and statutory guidelines for the expansion of high-quality charter schools. The Center for Research and Education Outcomes at Stanford University conducted an analysis in 2012 comparing the performance of Indiana charter schools with similar traditional public schools. Their study found that on average, charter school students experience larger reading and math gains than traditional public school students. However, results vary widely by individual charter school: • Eighteen percent of charter schools outperformed similar public schools in reading; eight percent saw lower gains than traditional public schools. • In math, 23 percent of charter schools outscored public school peers, while 42 percent of charter schools performed worse than similar traditional public schools in math .

2 School Choice | Indiana VOUCHERS OR OTHER STATE ASSISTANCE FOR PRIVATE SCHOOL CHOICE

Indiana is home to three private choice programs: a private/homeschool tax deduction, a voucher program, and a scholarship tax credit program. Private School/Homeschool Deduction • Taxpayers with a child who is homeschooled or already enrolled in a private school are eligible for a tax deduction worth up to $1,000 per child . • The tax deduction can cover approved educational expenses including private school tuition, textbooks, software, tutoring, and supplies. • In 2012, 51,018 taxpayers participated in the program and received an average deduction valued at $1,732.

Choice Scholarship Program • The Choice Scholarship Program has been in operation since the 2011-12 school year and offers a voucher to middle- and low-income families to attend a nonpublic school of their choice. • Students eligible for free and reduced-price lunch may receive a voucher worth up to 90 percent of the state per-student allocation for the sending school district. • Students from families earning 150 percent of the free and reduced-price lunch threshold can receive a voucher worth up to 50 percent of the state per-student funding allocation for the sending district. • 2013 legislation expanded the eligibility requirements for the program. Whereas the original law required students to attend a public school for two semesters before receiving a voucher, students with siblings in the Choice Scholarship program and those assigned to schools rated “F” on the state accountability report card are now able to receive a 50 percent voucher award if they had a family income within 200 percent of the free or reduced-price lunch threshold. • The legislation also expanded the vouchers to students with special needs who meet the income eligibility requirement. • Currently, the maximum voucher amount is $4,700 for grades K-8 and $4,500 for grades 9-12. The K-8 voucher will increase to $4,800 in 2014-15. • The program was challenged in the State Supreme Court, and in 2013 the court ruled that the program does not violate the state constitution.

School Choice | Indiana 3 State Summary Indiana

VOUCHERS OR OTHER STATE ASSISTANCE FOR PRIVATE SCHOOL CHOICE

School Scholarship Tax Credit • Individuals and corporations can claim a 50 percent tax credit for contributions to approved scholarship granting organizations. • There is no limit on the individual tax credit amount, but the program is capped statewide at $7.5 million . • Students are eligible if their family income is within 200 percent of the free or reduced-price lunch threshold.

• Participants are required to take a nationally norm-referenced test.

• In the 2012-13 school year, 4,638 scholarships were awarded with an average value of $1,017.

FINDINGS ON STATE ASSISTANCE FOR PRIVATE SCHOOL CHOICE IN INDIANA

Indiana’s voucher program is among the fastest growing in the country thanks in part to legislation passed in 2013. In the 2013-14 school year, approximately 19,800 students and 313 schools participated in the program, more than twice the previous year’s participation of 9,324 students. More than 5,000 students who received scholarships in 2013-14 would not have been eligible under the provisions in the original law. In 2013-14, the majority (66.5 percent) of Choice Scholarship students came from metropolitan areas, and 44 percent were ethnic minorities. More than two-thirds (76 percent) of students qualified for free or reduced-price lunch.

4 School Choice | Indiana STATE POLICIES ON OTHER FORMS OF SCHOOL CHOICE

Open Enrollment • Indiana’s voluntary open enrollment program was established in 2008. • This program allows a student to request a transfer to a different school or school district within the state. • House Bill 1381 , passed in 2013, set formal guidelines that the governing body of a school district may not deny a transfer request for any reason other than capacity or if a student has been suspended or expelled in the year preceding the transfer request. • School districts are required to establish and publicize the number of transfer students each school will accept. • If transfer applications outnumber available spaces, then the school district will hold a public lottery. • Schools offering a special curriculum may require transfer applicants to meet the same eligibility requirements as students currently at the school.

FINDINGS ON OPEN ENROLLMENT IN INDIANA

Under the original open enrollment policy, receiving school districts were able to set policies about which students they would accept, including standards based on test scores or disciplinary records. This policy was enacted at the same time as public school financing shifted from relying mainly on local property taxes to state sales and income tax revenues. Some members of the public expressed concerns that school districts were setting selective criteria that restricted the enrollment of students with special needs or academic challenges. This ultimately led to the passage of House Bill 1381 in 2013 to ban district restrictions on open enrollment transfers except for capacity or student suspension/expulsion.

Virtual Schools • Indiana offers a range of virtual education options including two statewide virtual charter schools, blended online charter schools, and district virtual offerings. Indiana does not have a state virtual school. • Blended and full-time online options are available to students in kindergarten through grade 12. • Legislation passed in 2011 includes virtual charters in the state funding formula . Virtual charter funding is calculated based on the school’s enrollment (average daily membership) multiplied by 90 percent of the school’s foundation amount under the state funding formula, plus grants. • The largest full-time virtual charter school is the Hoosier Academy Virtual School, which enrolled 4,151 students in 2013-14.

School Choice | Indiana 5 RESOURCES FOR FURTHER INFORMATION

Charter School Performance in Indiana

Choice Scholarship Program Annual Report: Participation and Payment data

Indiana Charter School Board 2012-2013 Annual Report

Keeping Pace with K-12 Online and Blended Learning: Indiana

National Alliance for Public Charter Schools: Indiana Law Profile

School Choice Issues in Indiana: Sifting through the Rhetoric

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