Letting vouchers fund Indiana microschools could spur innovation, but also a fight for cash

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Indianapolis mom Alicia Smith home-schools her three children, working with another parent to organize field trips, virtual meet-ups, and community service projects.

Meanwhile, at Streams of Hope school in Fort Wayne, 35 students are taught in a church by three teachers for $5,000 a year in tuition.

And around 20 students from Purdue Polytechnic High School work on individualized lesson plans in an Indianapolis church basement.

These approaches to education are very different. But they can all be considered “microschools,” a loosely defined and regulated category of schooling that is growing in Indiana. They’re often described as a midway option between home school and traditional school. And in the case of private microschools, they could be eligible for vouchers in the near future.

Some state lawmakers say that next year, they’ll support a push to let all parents use Education Scholarship Accounts — established in 2021 for students with disabilities — to purchase classes, tutoring services, and extracurriculars from a variety of providers.

This could lead to more state funding flowing toward the two most common kinds of microschools: Very small private schools and collectives of students educated at home. Both prioritize small class sizes and flexibility for student learning.

Indeed, as more states have expanded ESA programs to all students, they’ve seen a boom in microschooling.

“If we really want to make a difference, we need to give parents more than two choices,” said Indiana Treasurer Daniel Elliott earlier this year. “We need to give them the option to create their child’s unique educational pathway.”

Related: Inside a unique public microschool in Indianapolis

But such an expansion would also raise concerns about academic accountability for the constellation of programs, which can be difficult to track in detail. Home-schooling families, too, may be divided by the question of whether to accept some government regulation in exchange for financial assistance.

And the use of the term “microschool” could proliferate even as clear definitions of it prove elusive.

Given Indiana’s robust school choice landscape that already includes nearly universal private school vouchers, a move to expand scholarship accounts to cover microschooling could draw opposition from private school as well as public school advocates over funding.

“With the use of public funds, shouldn’t there be some role — whether that’s data, outcomes, test scores — to make sure this was operating as it was designed to?” said Liz Cohen, policy director at FutureEd, a Washington-based nonpartisan think tank.

Regulations might ‘defeat the purpose’ of microschools

Microschooling grew during the pandemic, when families tried out pods, online, and hybrid learning and found these models to be beneficial to safety and mental health, said Ben DeGrow, a senior policy director of education choice for ExcelinEd, an education nonprofit.

Indiana has gone from just a handful of these schools a few years ago to around 45 microschools operated by tutoring organizations, private schools, and others, said Jill Haskins, Indiana field coordinator for the National Microschooling Center. The center has identified Indiana as a priority state for expansion.

It’s not clear how many Hoosier students participate in microschools, which don’t have a definition in state code, and are purposefully broadly defined by advocacy organizations.

Haskins is also the CEO of Streams of Hope, a private, nonaccredited microschool in Fort Wayne with 35 full-time students and three teachers.

The school charges around $5,000 in full-time tuition, but it also offers a menu of other services for home-schooled and ESA students.

Home-schooled students can participate in per-credit classes and enrichment activities, while their parents remain responsible for grades and diplomas, Haskins said. Starting next year, the school will add a two-day hybrid program for home-schooled students.

Streams of Hope can also accept Education Scholarship Account students as a business entity, but not as a school. That’s an important distinction under the provisions of Indiana’s ESA law, which requires schools to be accredited to accept the funds.

One student currently uses the accounts to pay for the school’s tuition and enrollment fees, Haskins said, and next year, an additional four plan to use the accounts.

The requirements for each set of students — full-time, home school, or ESA — differs, but for each, Haskins said the Streams of Hope model can provide flexibility.

As Indiana considers expanding the ESA program to all students, Haskins said the Streams of Hope would consider participating as a school, if the accompanying regulations weren’t too onerous. A testing requirement might be acceptable, she said.

Currently, the school does not participate in state testing, and has been able to offer students flexible paths to graduation, Haskins said.

“The beautiful thing about microschools is that we approach education differently, to have regulation put on us would defeat the purpose,” Haskins said.

Vouchers and microschooling: Stackable or an awkward match?

Indiana lawmakers briefly discussed this year a proposal to combine the state’s three voucher tracks into one program and give parents funding directly to pay for classes and services, whether it’s a private school math class or lessons with a professional musician.

Though it was shelved, author Sen. Ryan Mishler expects the proposal to return next year, when lawmakers craft the biennial state budget.

In other states, this kind of universal ESA program has opened the doors for more microschooling as small groups of families pool resources to purchase curriculum, or enroll in a hybrid school option.

In the latter example, students might learn at home primarily from their parents, but take one or two courses from a microschool, an online program, or even a public or private school. ESA accounts could fund the per-credit costs of these classes. This is already allowed for students with disabilities under Indiana ESA law.

But Indiana has the well-established Choice Scholarship program that pays for tuition at private schools. After the state expanded eligibility for the scholarships last year, participation in the voucher program soared by about 30% to a record high of over 69,000 students.

In contrast, just 169 students participated in Indiana’s ESA program. And it’s not clear from the available data what educational setting they chose to use the dollars in, according to the Indiana Treasurer’s Office. Nationally, while most families used an ESA account like a voucher, around 10-15% opted for a custom option, noted DeGrow of ExcelinEd.

Since Indiana lawmakers have favored incremental expansion of voucher eligibility over the last decade, it’s unlikely that they would eliminate the voucher program in favor of a new, universal ESA, said Betsy Wiley, President and CEO of the Institute for Quality Education, an Indianapolis-based school choice advocacy organization.

Wiley said the institute would support creating a universal ESA program to function as a stackable fund on top of Choice Scholarships: The latter would pay for tuition and fees, while the former could cover tutoring, therapies, and other costs.

If Indiana does opt to merge the programs, the state will likely continue to require voucher students to take state tests for accountability purposes. That could prompt a range of responses among home-schoolers and microschoolers.

It could also create confusion for students using the funds for single courses or nonacademic expenses like transportation, for home-schooled students who don’t expect to take state tests, and for school providers who would have to decide whether to accept the regulation that comes with the funding.

Microschools are not quite home school

Both home-schoolers and microschoolers use terms like pods and co-ops. But the key distinction is that home schools are nonpublic, nonaccredited schools with less than one employee, said Kylene Varner of the Indiana Association of Home Educators.

Home-schoolers were initially included in this year’s bill to create a universal ESA in Indiana, but lawmakers later cut them out of the proposal at the urging of home school advocates. While they’re eligible to receive ESA’s under existing Indiana law, they are no longer legally considered home-schoolers.

In states like Florida and Arizona that offer universal ESAs, home-schoolers are allowed to participate, but are similarly no longer considered home-schoolers.

This is because traditional home-schooling families don’t want government funds or intervention in their children’s education, said Wiley of the Institute for Quality Education. But an ESA may appeal to parents interested in a hybrid schooling model.

Microschools need to be clear about who they serve, and parents must understand what laws they will be subject to if they enroll in a microschool, Varner said. That could include testing, responsibility for grading and transcripts, Department of Child Services procedures, and more.

Smith, the Indianapolis mom who home-schools her children, said she’s worked with another friend to create something that’s become a microschool, she said.

She has considered whether she would use an ESA if it were to become available, but is wary of the potential strings attached. Furthermore, taking the money might mean less for children who have disabilities, she said.

Better, Smith said, for her and her friend to pool their talents and resources and provide the education that’s best for their children.

“There is a bigger opportunity here to educate children that don’t fit inside the mold,” Smith said. “And you shouldn’t have to get to a breaking point. I don’t think there should be a prerequisite for teaching you the way you learn best.”

Aleksandra Appleton covers Indiana education policy and writes about K-12 schools across the state. Contact her at aappleton@chalkbeat.org.