For charter school supporters, it can be frustrating. There’s always something new in the Electronic Classroom of Tomorrow (ECOT) saga. The most recent allegation, by a whistleblower who’d worked for the online giant, is that officials from the school were ordering staff to manipulate student attendance data—after the school had already been ordered to repay $60 million in state funds as a result of a review of student participation by the Ohio Department of Education (ODE).

At about the same time, Senate President Larry Obhof mused that it might be time for the General Assembly to “take a look” at how the state calculates attendance and funding. “When the legislature’s able to do things or has the responsibility for doing things,” he said, “it should be the legislature, not an administrative agency, that does that.”

President Obhof is right. It’s time for legislative action. Thoughtful policymaking could not only hold online schools accountable for their work but also strengthen the virtual school sector and improve outcomes for students. Here’s a look at a few common sense reforms that the legislature should consider.

Commission a study on performance-based funding

Performance-based funding is an attractive solution that’s been pitched before, most notably by State Auditor Dave Yost. Done well, it could be a strong accountability measure that would align incentives with funding—when students complete coursework, virtual schools generate revenue. Switching abruptly to a completely new funding system is risky and logistically challenging, so the legislature should immediately commission a study to examine performance-based funding systems used by other states. This study could be led by the ODE, along with representatives from district, charter, and online schools. The study should explore the pros and cons of this type of approach, create a list of recommendations for how Ohio could create and implement its own system, and devise a pilot program to test for strengths and weaknesses. To prevent a repeat of the ECOT situation, Ohio needs to resolve this issue of funding virtual education, but do so in a thoughtful rather than reactionary manner.

Adjust the number of hours used for automatic withdrawal to sixty-five

Under current law, contracts between sponsors and governing authorities must include procedures for automatically withdrawing students that have failed to participate in 105 consecutive hours of learning opportunities without a legitimate excuse. Although the state calculates student attendance based on hours and not days, 105 hours is roughly equivalent to fifteen full school days—an entire three weeks of consecutive absences. This provision is too permissive, considering that state law considers students attending brick-and-mortar schools habitually truant if they have been absent without legitimate excuse for only seventy-two hours (approximately ten days) in a single year—regardless of whether those hours are consecutive. This is a simple change that would ensure a student failing to engage would be required to move from the more flexible online environment to a more structured classroom setting.

Allow online schools to disenroll students who aren’t actively participating

In a traditional classroom, teachers are able to directly observe students and select instructional strategies that ensure student engagement. Teachers in online schools, on the other hand, are far more limited in how they can interact with students. Under current law, online schools are only able to monitor and enforce a student’s attendance; they have little power to hold students accountable for active participation. This means that hundreds of online students could be cruising through school and not learning anything simply because they log in every day. Even if the school knows there’s a problem and the student isn’t learning much or isn’t engaged, its hands are largely tied because the student is meeting minimum attendance requirements. In such cases, students are being academically harmed and taxpayer dollars are being wasted. To remedy this, Ohio’s online schools should be permitted (but not required) to take a page out of Indiana’s book and disenroll students who they can prove are actively refusing to participate. To minimize the potential for students to fall through the cracks, online schools should be required to document their attempts to contact families about student engagement issues, and to notify the student’s school district of residence when a student is being disenrolled.

Modify graduation rate calculations to be based on the percentage of time spent in each school

Ohio’s current method of calculating graduation rates, the federally mandate adjusted cohort graduation rate, places the entire responsibility of a student’s graduation on the last school he or she attended. For example, consider a student who attends Lincoln High School for his first three years. Behind on credits and frustrated, the student transfers to Jefferson High School for his senior year. If the student fails to graduate, Ohio attributes the student’s performance entirely to Jefferson. This is extremely unfair to schools that receive large numbers of transfer students who are close to their expected “on time” graduation date. These schools are often held accountable for students who spent very little time enrolled in their programs. To make graduation rate calculations fairer and more accurate, the legislature should create an enhanced adjusted cohort graduation rate to supplement the current calculation and report this rate in the state accountability system. The enhanced cohort method would break each student’s high school attendance into eight semesters, and attribute credit for whether the student graduates to whichever school the student attended for the majority of that particular time period. This calculation would ensure that schools would be held responsible for the proportion of time students spent actually attending, rather than their most recent place of enrollment.

Limit sponsor fees for schools with more than 2,000 students to 1.5 percent

Under current law, sponsors may charge the schools they authorize oversight fees of up to 3 percent of the total amount of payments received from the state. These fees are an instrumental part of maintaining quality authorizing practices. But as schools continue to grow, the economy of scale should be taken into consideration. Limiting sponsors to oversight fees of 1.5 percent for schools that educate more than 2,000 students acknowledges this principle. It also prevents authorizers from relying on a single school for a disproportionate amount of their funding, a practice that could create perverse incentives for keeping a low-performing school open, essentially making it too big to fail.

Limit sponsorship of statewide online charters to statewide authorizers

Online schools are unique in that they aren’t automatically constrained by geographic boundaries. As a result, in Ohio, some online schools serve students from all over Ohio while others limit their services to particular school districts or regions. While a school’s service area doesn’t necessarily require the school to alter its general operating procedures, it does impact an authorizer’s ability to provide effective oversight. In other states, for example, individual districts have opted to sponsor statewide online schools and then struggled to oversee them because of the varying needs and contexts that come with such a broad geographical base. To prevent these challenges, Ohio should ensure that only authorizers that have gained approval from ODE to oversee charters statewide can sponsor schools that take students from every district.


Online schooling has many benefits and it’s an option that thousands of Ohio families take advantage of each year. But the state legislature has a responsibility to make sure that the students in these schools are learning, and that taxpayer funds are being spent well. The provisions outlined above would be a step in the right direction for Ohio’s online charter sector, and should—sooner rather than later—be considered carefully by members of the General Assembly.

Policy Priority:

Chad Aldis is the Thomas B. Fordham Institute’s Vice President for Ohio Policy and Advocacy. In this role, Chad plans and leads Fordham’s Ohio policy, advocacy, and research agenda . He represents the Institute in its work with the media, state and local policy makers, other education reform groups, and the public.

Chad has a strong background in Ohio education policy work having previously served as the…

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