The Union School Corporation — a rural school district better known for its lucrative online alternative school — will enroll students for what may be its final school year as the district awaits a civil trial in its bid to defeat a legislatively-mandated closure.
Lawmakers inserted language in a property tax relief bill last year to shutter the district by 2027, citing low test scores and graduation rates at the east central Indiana district.
They also point to the high rate of children who live in the district but attend school elsewhere to justify the closure.
Supporters of the district, which filed a lawsuit in Randolph County challenging the constitutionality of the Senate Enrolled Act 1 language, suggest the state’s true intent is to take over the Indiana Digital Alternative School.
The school continues to operate as normal while the lawsuit advances — and the superintendent is expressing optimism in a letter to parents this week.
The district even sent home yards signs supporting the schools with students.
District remains open, for now
The lawsuit alleges the SEA 1 amendment — inserted without public debate in an unrelated tax bill toward the end of the legislative session — constitutes special legislation prohibited by the state’s constitution.
“It is unclear why Union Schools was the only school corporate specifically targeted for this special legislation,” while districts with worse test scores were omitted, attorneys for the district argued in a motion seeking preliminary injunction.
Special Judge Brian Hutchison denied a preliminary injunction for Union schools last year, calling the motion “moot,” as the state conceded the law’s moratorium on new obligations does not prevent the district from conducting normal operations prior to closure.
A trial is scheduled for Nov. 24 in Randolph Superior Court.
Story continues below.
Union schools entered into a partnership with virtual learning company Stride Learning to oversee the Indiana Digital Alternative School in 2017 in exchange for 5% of the school’s revenue, according to nonprofit newsroom The 74.
The virtual alternative school nets Union schools — a district once at risk of consolidation, with only 300 students from the small town of Modoc enrolled — an estimated $3 million a year in oversight fees for the 7,529 Hoosier students who take classes online, boosting enrollment.
Union schools and its constituents “will be irreparably harmed by the lack of educational, athletic and civic opportunities schools provide, which form the bedrock of a free state,” the district argued in court filings.
The district’s website boasts that student enrollment grew by 1280% in a three-year period.
“Unfortunately for all its students, Union School Corp. provides an education that is much worse than the rest of the state, with graduation rates and test scores that rank far below comparable schools,” state attorneys argued in a motion.
A look at Union’s scores
Sixty-two percent of Union third graders earned proficient scores on the state’s IREAD-3 exam in 2025, trailing the 87.4% statewide average, according to the Indiana Department of Education. But when looking specifically at students in person at Union Elementary School they are at 78%.
Only 2% of Union sixth graders met their individual growth targets on state math assessments, compared to 35% of sixth graders statewide.
Three percent of Union freshmen completed advanced coursework before entering high school — far below the 48% of Hoosier students who earned high school credit early.
SEA 1 “remedies this situation by dissolving this failing school corporation and distributing its students and assets to much more successful neighboring schools,” state attorneys argued in a response to Union’s lawsuit.
“This constitutionally permissible legislation allows Union School Corp. to wind up its affairs and continue to operate for the next two years.”
Braun remains a defendant
The court ruled in favor of Union schools in the state’s attempts to dismiss Gov. Mike Braun as a defendant, though Hutchison agreed to dismiss Education Secretary Katie Jenner from the lawsuit.
“We believe in full confidence that we will win,” Superintendent Galen Mast wrote in a letter to parents Monday. “While we feel fully confident that the court case will be decided in our favor legally, we also have alternative plans to ensure that Union’s doors stay open to the public for years to come should we need or desire a different path forward.”
The district will begin enrolling students for the coming school year, which may be Union’s last, on May 1.
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
