Giving Compass' Take:

• Stephanie Wang reports that Indiana is reducing public funding for virtual charter schools after disappointing results.

• How can funders help to build better online education options? 

• Learn how online education can serve low-income students if there are sufficient supports. 

Indiana lawmakers are sending a warning signal to low-performing virtual charter schools.

Under sharp scrutiny for enrolling thousands of students who don’t earn credits and graduating few students, virtual charter schools will lose a chunk of state funding in the next two years.

In the final budget lawmakers dropped funding levels for online students to 85 percent of what students at brick-and-mortar public schools receive — a reduction from the 90 percent of funding that online schools had been receiving.

The cuts come as two of Indiana’s virtual charter schools, Indiana Virtual School and Indiana Virtual Pathways Academy, are under the threat of closure. The school district that oversees them, Daleville Community Schools, contends that the schools enrolled thousands of students who never earned any credits — including many who never even signed up for any classes.

Across the board, Indiana’s virtual schools post lower graduation rates than the state average. Virtual schools say that’s because they largely serve students with significant challenges, including those who have struggled at other schools, have disabilities, or are raising children.

But a Chalkbeat investigation showed nearly 2,000 students never earned a single credit last year across Indiana’s six virtual charter schools — an approximately $10 million drain on state funding.

Read the full article about public funding for virtual charter schools by Stephanie Wang at Chalkbeat.