Funding advice for online learning

As online learning continues to gain momentum across the country, education experts are warning that policies surrounding this popular learning option are shaky at best. A new report by the International Association for K-12 Online Learning (iNACOL) is calling for a better policy and funding framework to make sure students are getting the best education possible.

The report, “Policy and Funding Frameworks for Online Learning,” written by John Watson and Butch Gemin of Evergreen Consulting Associates, and published by iNACOL, is the fifth report of iNACOL’s six-report series called Promising Practices in Online Learning, which explores some of the approaches being taken by “practitioners and policymakers in response to key issues in online learning.”

The series was commissioned by iNACOL, because interest in, and applications to, online learning institutions have increased. For example, last year iNACOL estimates there were more than one million students enrolled in online courses. More than 30 states have state-led online programs, and more than half of the school districts in the U.S. offer online courses and services.

However, even though online learning is growing at the rate of 30 percent annually, access to online schools and courses is not keeping pace with the demand from students and parents. iNACOL estimates that more than 40 percent of middle and high school students want to enroll in online courses–more than 20 million students.

“Today, every student can access a world-class education with online courses taught by talented, qualified teachers at any location,” said Susan Patrick, president of iNACOL.

“The barriers to entry are outdated policies restricting student registrations, funding policies that limit choice, and seat-time requirements. Policy makers are looking to find new solutions for education reform, and online learning will allow every student to choose customized, world-class educational options.”

By publishing this report, iNACOL hopes to guide policy makers toward “effective choices to support the high-quality online and blended learning environments potentially available to every child today.”

The challenges

The report details many considerations policy makers must take into account for online learning, the first being that there are many “dimensions,” or programs that vary widely in comprehensiveness, reach, delivery methods, locus of control, and more.

For example, differences in reach are important because several states draw distinctions between online programs that serve students across multiple districts, the entire state, and beyond. The report declares that because funding for K-12 education in the U.S. has historically been structured around local control, education and policy leaders have never had to deal with issues such as who pays a teacher’s salary if he or she teaches from another district or even another state, or who gets the state’s per-pupil funding allotment–the district, the virtual learning provider, or some combination?”

Questions that deal with reach typically center on issues such as teacher certification and reciprocity, variations in graduation requirements, portability of credits, meeting state standards, and accreditation requirements, says the report.

Next, the report states that policy makers must identify and define the types of programs they want to be covered by specific policies.

This problem is illustrated by an Idaho state audit that looked at virtual charter schools and district programs.

According to an Idaho legislature report, staff at the Idaho Department of Education (DOE) “are not aware of any other school in Idaho offering an online program other than online charter schools…However, the department does not have a process for determining whether any other school is offering a virtual program. Commission staff are also not aware of any other school offering virtual programs, but states they would only be aware of a virtual program offered at schools they authorized…”

The Idaho legislature responded, in part, by creating a legal definition of virtual schools as “…a school that delivers a full-time, sequential program of synchronous and/or asynchronous instruction primarily through the use of technology via the internet in a distributed environment,” says the report.

Another factor to consider is what the report calls the “Hybrid Dilemma,” or “how to define blended vs. online learning.”

The report explains that one way to ensure that physical classrooms using online resources are not covered by online learning policies is to explicitly exempt blended learning–that is, learning facilitated by a combination of online and face-to-face coursework.

For example, Florida’s 2008 law states that “A provider of digital or online content or curriculum that is used to supplement the instruction of students who are not enrolled in a virtual instruction program…is not required to meet the requirements of this section.  “This section” refers to the stipulations given to providers that touch on teacher certification, location of offices within the state, accreditation procedures, and other operational issues.

Principles and guidelines

After policy makers have clear definitions of the different types of online learning and what programs exist in their state, the report suggests creating a list of “First Principles,” or a set of foundational ideas that provide a touchstone for the “potentially complex and heated debates that are likely to follow.”

In the report, iNACOL provides a list of “First Principles” to help policy makers. Principles include (but are not limited to): Provide equal access to all students; advocate for valid research to ensure effective, research-based instructional and curricular practices; and maintain teachers as the expert leaders and facilitators of learning, giving them responsibility for overseeing and managing student learning, and for ensuring academic progress and accountability.

After the principles have been defined, the report suggests applying these principles to legislative and policy themes, such as funding, and gives examples of how states and online learning institutions are implementing and dealing with these policy themes.

According to iNACOL, funding is the “single most important policy issue in online learning,” and the report goes into detail on several funding-related issues.

Online schools should be funded within the range of a brick-and-mortar school’s operating costs in each state. The report details expenditures such as technology components and technical support and cites still other reports that detail these expenditures.

The report notes that accounting and reporting should be freed from seat time and census dates. iNACOL believes that one of the biggest barriers to effective policy for online learning is the way funding is linked to student attendance. Most states predicate student counts on the idea that the student is in a physical classroom and can be counted in a census-like fashion. In online learning, students are most often not in a physical classroom, and therefore “the very language in such census exercises does not fit virtual learning, resulting in a lack of funding for online programs or the need to change accounting practices.”

A common alternative is to fund based on equivalencies (the online course is deemed to be equivalent to the face-to-face course and is funded at the same level). But the report says a more innovative option is to fund students based on outcomes.

“States that fund based on successful completion find that having defined benchmarks or milestones for incremental completion (for example 50 percent and 100 percent complete) provides a more rational and predictable approach than ‘all or nothing.'” For example, the Florida Virtual School (FLVS) has outcome-based funding; the school does not receive funding until students successfully complete each course segment.

Julie Young, FLVS CEO, offers this recollection: “In our early days of development, we were highly influenced by a 1992 Secretary’s Commission on Achieving Necessary Skills (SCANS) report. One quote we’ve returned to over and again says, ‘In our current system, time is the constant and achievement the variable. We have it backwards. Achievement should be the constant and time the variable.’ As we continue to evolve, we keep this central focus on achievement as our guidepost for development.”

In terms of student participation requirements, state law may set requirements for communications from students to make sure they are actively participating in the online school.

State-led supplemental programs, which have traditionally been funded through line-item state appropriations, should be shifted to a sustainable funding source, according to the report.

Along with noted policy themes, the report describes policies it would be well to avoid, such as requiring on-site or face-to-face instruction, mandating enrollment limits on the number or type of students who can enroll in online schools or online courses, and setting funding levels for online students well below funding of other students in the state.

There also is a section devoted to “Next Generation Legislation,” which lists elements of policy making that will lead to better online learning and start to pull away from “one-size-fits-all legislation.”

“The many intricate policy details and questions can be confusing, and certainly challenging to understand and explain,” concludes the report. “In fact, even when you find something that works in one state, there is no guarantee it will work everywhere. With so much local control and without national education standards, perhaps the best approach is to agree on promising frameworks for creating policy and then leave it to states and districts to create policy specific to their needs within those frameworks.”

However, the report does say that there is a “litmus test” for evaluating online-learning policy.

“Good policy answers two key questions affirmatively: 1. Does the policy hold promise for increasing student educational opportunities? and 2. Does the policy hold promise for improving student educational outcomes? If the answer to both questions is yes, the policy is likely to be beneficial.”



“Funding and Policy Frameworks for Online Learning” (PDF)

Note to readers:

Don’t forget to visit the Stimulating Achievement resource center. Learn how to make wise spending decisions and keep track of school needs as stimulus funds become available. Go to: Stimulating Achievement

Sign up for our K-12 newsletter

Newsletter: Innovations in K12 Education
By submitting your information, you agree to our Terms & Conditions and Privacy Policy.

Meris Stansbury

Want to share a great resource? Let us know at

eSchool News uses cookies to improve your experience. Visit our Privacy Policy for more information.