Funding online students
At what level are online students funded in each state that allows online schools?
It’s a simple question, right? Give me a day to make a few phone calls and run some Google searches and I’ll get back to you.
Nope. In fact, as lead researcher Susan Gentz found in her efforts across many months, few things are murkier than student funding levels.
That’s why we titled our just-released study “The Land of Confusion: A Review of Online Student Funding.”
As discussed in the Executive Summary and Introduction (edited slightly here for length):
Even before the COVID-19 pandemic forced schools into emergency remote learning, about 375,000 students were attending full-time online schools. These schools were operating as charter or district schools in more than 30 states, drawing students from regions or entire states. During the pandemic in school year 2020–21, the number of students in these pre-existing full-time online schools increased by 75%, to more than 650,000 students, and additional states have been approving such schools.
This renewed interest in online schools calls for a refocusing on the level of funding that online students generate. Online student funding varies significantly between different states. Some states fund online students at or very close to the same level as students in physical schools. Other states fund online students at significantly lower levels.
A commonly heard refrain is that online learning is less expensive to deliver because an online school doesn’t have brick-and-mortar buildings, physical classrooms, paper books, lab materials, etc.
Some of this thinking is factually wrong. In fact, many online schools deliver physical instructional materials, including books, to their students.
But even when narrowly correct, as in the accurate statement that online schools don’t have buildings or physical classrooms that students attend, the thinking behind these statements is exactly backwards. Why?
Because every important academic function that is performed by a physical space or object in a mainstream school must be provided in some form or fashion by an online school, often in the digital realm.
For example, an online school’s “classroom” is the learning management system. An online school’s access is via a computer, which the school often provides. Books and other instructional materials either remain physical, and must be mailed to students, or must be developed in a digital format. None of this is easy or inexpensive.
In addition, good online instruction relies heavily on teachers. Instruction is not delivered primarily via online content, artificial intelligence or chatbots. Human teachers, who connect with students and often with families, are the main source of instruction. Just as in the physical-world realm, providing high-quality, certified teachers is expensive (as it should be).
Yet too many policymakers believe that online students should be funded at lower levels than physical school students.
This funding reduction occurs in two main ways. First, some states fund charter schools at lower levels than mainstream district schools. Because many online schools are charter schools, this leads to a reduction in online student funding. In other states, online schools generate lower funding than physical schools, regardless of whether the online school is a charter or district-run school. Regardless of the policy mechanism, the result is that when families select a particular type of education modality (online), the student generates a lower level of funding for the school.
This study reviews available evidence for funding amounts for online students and funding mechanisms for online students. It first presents funding levels and mechanisms in a subset of states, and then explores several different concepts related to online student funding.
As these numbers are presented, it is important to keep in mind that every state has a highly complex formula with an impressive number of different variables. This study intends to demonstrate broad scale differences while presenting numbers that best represent the general trends and directions of state funding amounts.
Key Takeaways
Online schools have expenses that are different than, and in addition to, expenses of physical schools
Counting students for funding purposes is difficult in many states
Understanding online student funding levels is more important than ever
Lower funding for online students limits learning options
Student accounting processes need to be reconsidered
Online school funding should be far more transparent.
The full study is available on the Digital Learning Collaborative website.