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Determining Funding for Online Schools

Policy Brief, Model Legislation Offer Blueprint for Fair, Effective Financial Support

Bruce Baker, (732) 932-7496, x8232,
Justin Bathon, (859) 257-7845,
William J. Mathis, (802) 383-0058,

URL for this Press Release:

BOULDER, CO (Oct. 15, 2013) – As supplemental online education and full-time virtual schools expand, policymakers must address a fair and effective way to determine financial support for these institutions, which didn’t exist when school financing formulas were first developed. A new brief and companion model legislation released today offer a blueprint for funding online education fairly while not shortchanging traditional brick-and-mortar schools in the process.

Both the brief, Financing Online Education & Virtual Schooling: A Guide for Policymakers & Advocates, and the accompanying model legislation document, School Finance 2.0, were written by Bruce Baker of Rutgers University and Justin Bathon of the University of Kentucky and are published by The National Education Policy Center (NEPC).

Just what is a “fair price” for funding alternatives to traditional public schools, including online schools, has been a matter of sharp disagreement. The research literature on the question is “at best, sparse and inconsistent,” Baker and Bathon write. “There exists little, if any credible peer-reviewed analysis of the costs and benefits of education alternatives.”

Simply to provide a complete analysis of what online education costs and how effective it really is when compared with traditional models of education is itself “a monumental task,” the authors note. And, they add, “there is little credible research on outcome quality.”

Baker and Bathon offer a new conceptual approach to funding online education. They set forth an analytic framework for developing online-funding policy, with formulas based on the actual cost of operating online schools and linking funding to accountability in order to establish their cost-effectiveness.

Their model legislation then puts these principles for reforming online school financing into concrete form, offering a practical blueprint from which policymakers can draw in reforming their individual states’ financing formulas.

Find the brief Financing Online Education & Virtual Schooling: A Guide for Policymakers & Advocates, and its companion model legislation, School Finance 2.0, by Bruce D. Baker and Justin Bathon, on the web at

The mission of the National Education Policy Center is to produce and disseminate high-quality, peer-reviewed research to inform education policy discussions. We are guided by the belief that the democratic governance of public education is strengthened when policies are based on sound evidence.  For more information on NEPC, please visit

These policy and legislative briefs were made possible in part by the support of the Great Lakes Center for Education Research and Practice (