Why It Matters
Virtual schooling in Indiana has grown into a significant force in K-12 education, with nearly 29,000 students enrolled in online programs during 2025. The expansion raises questions about school funding mechanics, student outcomes, and state oversight as traditional districts increasingly partner with third-party virtual providers to access state tuition dollars.
What Happened
Sabanna Yenna’s freshman year at North White School Corporation in White County ended with a difficult choice: continue facing bullies or pursue education elsewhere. She enrolled at Indiana Digital Learning School, a virtual program operated by Stride K-12, and found a different environment. The school held its inaugural in-person commencement ceremony at Hinkle Fieldhouse, drawing 900 virtual classmates. Yenna joined the school’s FFA chapter and became president of its National Technical Honor Society.
Indiana Digital Learning School operates under a cooperative agreement model that allows traditional public school districts to partner with third-party virtual providers. The district enrolls the students, receives state tuition funding on their behalf, and the virtual operator delivers instruction. Stride K-12 recently expanded these partnerships, signing new cooperative agreements with Beech Grove Schools and MSD of Warren County Schools, which sits 13 miles from the Illinois border and serves 1,332 students.
The financial incentives are substantial. Virtual schools receive 85 percent of standard state funding per student. Union School Corporation, which has partnered with Indiana Digital Learning Schools since 2016, now hosts a student population where virtual attendees outnumber traditional students at a 25-to-1 ratio.
The state has grappled with oversight challenges. Two virtual charter schools authorized by Daleville Community Schools collected $68 million through inflated enrollment figures, sometimes described as “ghost” students. Union School Corporation itself faces closure by state lawmakers due to poor academic performance, though the district has filed a lawsuit to block the action, with trial set for November.
The State Board of Education is drafting new financial reporting and oversight rules to address accountability concerns. Those regulations are due by the end of the year.
By the Numbers
29,000 — Hoosiers enrolled in virtual K-12 schools during 2025
900 — attendees at Indiana Digital Learning School’s first in-person commencement ceremony
85% — funding percentage virtual schools receive from state tuition dollars
25 to 1 — ratio of virtual students to traditional students in Union School Corporation
$68 million — funds collected by two Daleville virtual charter schools through inflated enrollment
Zoom Out
Virtual and hybrid learning expanded nationwide during and after the COVID-19 pandemic, but Indiana’s growth reflects a particular structural incentive: the cooperative agreement model. Unlike traditional charter schools that operate independently, virtual providers integrated into district structures allow failing or financially strained school systems to generate revenue without directly managing instruction. This has created both opportunities for students seeking alternatives to traditional settings and fiscal pressures on districts that may prioritize enrollment over academic quality.
The tension mirrors broader debates over school choice and funding mechanisms. Some education officials and lawmakers question whether the financial structure itself encourages districts to adopt virtual programs for revenue rather than educational fit. Political challenges to education governance have intensified scrutiny of how state dollars flow through public systems.
What’s Next
The State Board of Education will finalize new oversight and reporting rules by year’s end, likely focusing on enrollment verification and financial transparency. Union School Corporation’s lawsuit over its mandated closure will proceed to trial in November, potentially setting precedent for how the state handles academically underperforming districts. Meanwhile, Stride K-12 and other virtual providers continue expanding their cooperative agreements with Indiana districts, a trend that will likely accelerate unless the new regulations impose stricter limits on enrollment or funding mechanics.