TITLE 511 INDIANA STATE BOARD OF EDUCATION

a. History and Background of the Rule – While there have been minor adjustments in recent years, Indiana's current high school diploma requirements found in 511 IAC 6-7.1 have not been significantly updated since the late 1980s. As part of a larger effort to "reinvent high school" during the 2023 legislative session, the Indiana General Assembly (IGA) tasked the State Board of Education (State Board), in consultation with the Indiana Department of Education (Department), with establishing new high school diploma requirements to replace the existing requirements found in 511 IAC 6-7.1;¹ and this past year, the IGA passed HEA 1243-2024, requiring the State Board to adopt rules under IC 4-22-2 to establish the new requirements and implement IC 20-19-2-21 no later than December 31, 2024. Various sections of 511 IAC 6-7.1 were last readopted in 2018, while others were readopted in 2023. In response to both HEA 1002-2023 and HEA 1243-2024, the State Board intends to promulgate rules establishing updated diploma requirements that align to the skills students need to thrive in the future.

b. What process did the agency follow to develop this rule, for example was there a committee, external working groups, model code, etc.? Shortly after the 2023 legislative session, the Department convened a diploma redesign steering committee comprised of educators, business associations, post-secondary representatives, and staff from the Department and the Commission for Higher Education to inform the diploma redesign work. The Department also partnered with national experts who made recommendations for next generation diplomas. Following convenings of the steering committee, the Department hosted numerous meetings with education associations, educators, business leaders, non-profit organizations, legislators, and community leader to get feedback on the direction of the new diplomas and incorporate stakeholder input.

c. Scope of the Rule – The proposed rule establishes new diploma requirements that allow students to (1) increase their educational attainment; (2) develop in-demand skills; and (3) participate in individualized high school experiences aligned to their interest and aspirations. The new diploma requirements include academic credentials of value and employability skills, which will better prepare students for postsecondary success.

d. Statement of Need

The future of Indiana's economy and overall prosperity requires a well-educated workforce with in-demand skills.

According to the Georgetown University Center on Education and the Workforce, 62 percent of jobs in Indiana (2,038,000 jobs) will require some postsecondary training beyond high school in 2031, with the largest increases in total jobs between 2021 and 2031 occurring in the healthcare, STEM, and community service and arts fields.² According to Hoosiers by the Numbers, four of the six fastest-growing professions in Indiana between 2021 and 2031 (all in medical fields) require a postsecondary credential.³ While these projections are informed by historical patterns and trends, they do not account for state-led efforts to attract new high-wage, high-skill industries to the state.

Indiana's current educational attainment levels fall short of the State's educational attainment goals.

According to the Lumina Foundation, only 53.8% of Hoosier adults between 25 and 34 have at least a short-term industry credential.⁴ This is well short of the state's 60% credential, certificate, and/or degree attainment goal by 2025. Several leading indicators suggest Indiana is not on track to achieve this critical educational attainment target:

These data suggest one of the most effective routes towards Indiana's attainment goals is to ensure more students receive a credential before entering the workforce or a postsecondary program. According to a study completed by the Lumina Foundation in partnership with Gallup, the most common reason people stop their postsecondary education prior to completing a credential or degree is difficulty balancing school and work at the same time.

Reinforcing these data are recommendations included in a recent Governor's Workforce Cabinet report Recommendations to Tackle Employer Talent Challenges and Accelerate the State's Economy,⁹ which identified an urgent need to rethink high school by increasing diploma flexibility and ensure students have access to:

Changes to Indiana's graduation requirements may influence the percentage of graduates who earn a quality credential prior graduating high school.

While there are several leading indicators that suggest Indiana is not on track to meet its 60% educational attainment goal by 2025, there are others that point to future gains in educational attainment. For example, Indiana saw the most rapid, non-methodologically influenced, increase in educational attainment between 2019 and 2021. According to data from The Lumina Foundation, Indiana increased total educational attainment for adults aged 25-34 by five percentage points.¹⁰ During this time, Indiana saw the greatest increase in young adults earning industry credentials, doubling the percentage of adults in this age-group who obtain an industry credential while halving the percentage with some college but no credential.

Recent data trends may also suggest adjustments to graduation requirements may have negatively influenced the percent of high school graduates pursuing degrees to the detriment of Indiana's educational attainment goals. While there were multiple large scale policy initiatives across the state between 2019 - 2021, one of the largest was a shift in graduation requirements to focus on postsecondary readiness and credentials. As a result, Indiana saw a 26% increase in the number of high school graduates completing a credential prior to graduation from 10,856 in 2021-2022 to 13,707 in 2022-2023.

The changes to Indiana's high school graduation requirements in 2019 increased flexibility by shifting from a narrow focus on two standardized assessments to a menu of options that allowed students to better tailor their postsecondary competency to their personalized career pathway. This flexibility allowed students to pursue, for example, an industry credential in lieu of repeated remedial coursework to pass an ELA or math assessment.

The State Board has a statutory obligation to establish new high school diploma requirements that comply with the requirements set forth in IC 20-19-2-21.

As mentioned in Section I.a. above, the IGA has directed the State Board to adopt new graduation requirements that:

° Direct entry into the workforce upon graduation.

° Postsecondary education aligned to the student's chosen career path.

The proposed graduation requirements are aligned with research and expert recommendations that maximize course/credit flexibility as a means of promoting career-embedded educational opportunities that prioritize work-based learning and credential completion.

Course and credit flexibility, along with opportunities to count experiences and credentials towards diploma requirements, increase the likelihood students will remain on track and able to participate in career-aligned coursework instead of being forced into a narrowly tailored set of course requirements. Aligning course and credit expectations with the aspirational vision to increase credential completion and work-based learning ensures that all components of the graduation requirements are aligned and complement each other.

Requiring work-based learning as a component of the Indiana Graduates Prepared to Succeed Plus (GPS+) designation and including it as an option in the Indiana Graduates Prepared to Succeed (GPS) designation is essential to increasing the rigor and relevance of the high school experience. According to the Department's data, students who participated in work-based learning were three times more likely to be on track to graduate entering 12^th grade than students who did not participate.

Finally, to increase credential completion in high school, the proposed rule provides students with opportunities to align their course and credit requirements to their desired pathway. The flexibility included in the proposed rule is critical to achieving Indiana's educational attainment goals and increasing the percentage of students completing a high-quality credential while in high school. Too often, high-quality credentials require coursework that is in addition to the courses required under the existing diploma requirements creating an additional burden on students who want to complete a postsecondary credential before they graduate high school. This is illustrated by the reality Indiana consistently has over 60% of each graduating class completing high school with some college credit, but only 5% are leaving having completed an actual credential.

Recognizing the critical need to increase educational attainment in Indiana, aligning Indiana's diploma requirements with the requirements of high-quality industry and postsecondary credentials is a critical next step. There is an immediate need for the changes made by this proposed rule.

e. Statutory Authority for the Proposed Rule – The State Board has general rulemaking authority under IC 20-19-2-8. Furthermore, the legislature has provided specific authority for this rule in IC 20-19-2-21, as amended by HEA 1243-2024.

f. Fees, Fines, and Civil Penalties – 511 IAC 6-7.2 does not add or increase any fees, fines, or civil penalties.

a. Anticipated Effective Date of the Rule – July 1, 2025.

Over the next 12-18 months, the Department will develop policy guidance, FAQs, and other support necessary to operationalize the proposed rule. Following this initial 12-to-18-month rollout, the Department will shift its focus towards building out the more optional/aspirational aspects of the proposed rule. For example, building out a framework for competency-based attainment of credit requirements, adding options for demonstrating employability skills, and completing proposed course sequences in addition to those required to earn one of the three seals for students based on different pathways.

b. Estimated Fiscal Impact on State and Local Government

Fiscal Impact to State of Indiana:

The new Indiana GPS diploma structure incorporates credentials of value, dual credit and dual enrollment courses, associate's degrees, CTE courses, and more. As a result, it is likely that more students will participate in these opportunities and the total number of college credits and credentials earned by high school students prior to graduation will increase. An increase in the total number of college credits and credentials earned by students in high school could have an impact on tuition support, as Indiana's tuition support formula includes additional funding for these activities via the Academic Achievement Grant (IC 20-43-10.5-4), the Career and Technical Education Enrollment Grant (IC 20-43-8-15), and the Credential Completion Grant (IC 20-43-8-15.5).

While it remains to be seen whether the changes to Indiana's diplomas requirements will have an impact on tuition support, any fiscal impact that results from an increase in the number of Academic Achievement Grants, Career and Technical Education Enrollment Grants, and Credential Completions Grants awarded to schools is likely to be offset by the elimination of the Academic Honors Grant (IC 20-43-10.5-3). The following table provides a unit cost breakdown for each activity included in the tuition support formula that may see an increase as a result of the proposed rule.

Fiscal Impact to Corporations:

Contracts with Postsecondary Institutions and Teacher Credentials: Including post-secondary and industry credentials as part of the Indiana GPS Diploma designations may result in increased local government expenditures, as districts will need to contract with post-secondary institutions and/or increase expenditures toward staff credentialing. The increased expenditures and additional costs will be mitigated to some extent by the existing framework that currently provides dual-credit opportunities and work-based learning experiences to students across the state. In fact, some schools may not be impacted at all by these changes, as sixty-four percent of students currently earn college credit before graduating high school.

Course Access: The increased focus on credential completion may result in high schools needing to offer courses through the Indiana Course Access Portal (iCAP). While not required, school corporations may opt to pick up some of the costs for these iCAP courses. For dual credit courses specifically, Ivy Tech, Indiana State University, and Indiana University do not currently charge fees. Additionally, students who qualify for the Free and Reduced Lunch Program do not pay any fees for dual credit courses offered by Indiana's public institutions. These free options demonstrate that school corporations will have several ways to increase access to dual credit coursework without incurring additional costs. That said, the following table provides the average cost per course on iCAP.

Career Coaching & High School Counseling: Changes to the graduation requirements may increase demand for high school counseling services as school corporations work to ensure each student is on track to graduate. Increased costs attributable to high school counseling are expected to be short-term in nature, lasting from 2025 to 2030, as counselors shift their practices and school corporations increase overall efficiency and counselors' productivity by refining existing systems.

To some extent, existing grant funding may offset counseling costs for grant recipients. For example, the Career Coaching Grant will provide school corporations with an additional $25 million over the biennium, which may be used to cover the cost of providing students with comprehensive and relevant information about career pathways.

According to the department's supply and demand educator marketplace accessed on 5/15/24, the salary range for a school counselor in Indiana varies from $43,000 to $96,000. It is difficult to reliably estimate the additional capacity that will be needed to implement the new graduation requirements, as the need, and therefore the costs, will differ significantly from school to school. With that in mind, the following table provides a breakdown of the average total compensation for a high school counselor in Indiana.

Work Based Learning: It is unclear how many students will participate in work-based learning because of this new rule; however, given one of the main objectives of the new graduation requirements is to increase participation in work-based learning, the Department has derived a unit cost to help guide fiscal impact analyses at the local level as schools expand work-based learning opportunities, support school based enterprises, and provide transportation to students participating in graduation qualifying experiences outside of their school campus.

c. Sources of Expenditures or Revenues Affected by the Rule – The Department considered potential impacts to schools' Education Fund, as costs may increase as schools work to meet instructional requirements for students as a result of the proposed rule. Overall, the new requirements may place a greater demand on the Education, Operations, and/or Debt Service funds as schools reallocate existing funds to support staffing and updated systems at the school level.

Parties impacted by the rule change include approximately 418 school corporations encompassing 1,874 schools; 369 accredited non-public schools; 862,676 current pre-kindergarten through ninth grade students; 66,838 teachers; and 1,333 high school counselors. Schools, teachers, and high school counselors will need to know how to effectively navigate the new requirements to ensure student success. Students will be directly impacted by the updated requirements because they will need to complete the new requirements to graduate from high school. In the short-term, as high school counselors work to implement new systems and supports for students, students may need to devote additional time to considering their new options (designations and seals), including the pathways aligned to their chosen career path, to ensure they are on track to meet the new graduation requirements.

In addition to the parties listed above, the proposed rule will impact Indiana's approximately 58 colleges and universities, as each institution may have to update their transcript review infrastructure, potentially revisit historical admissions policies, and update communications materials to high school students to reflect the changes in graduation requirements.

The following table provides a section-by-section breakdown of the changes in diploma/graduation requirements that result from the larger shifts described above.

a. Estimate of Primary and Direct Benefits of the Rule - The following table lays out the potential benefits of adopting the proposed rule. The analysis is informed by expert recommendations, research into educational attainment and workforce development, and data on Indiana's current educational, economic, and workforce development landscape.

b. Estimate of Secondary or Indirect Benefits of the Rule – The following table lays out the expected secondary benefits of adopting the proposed rule. The analysis is informed by expert recommendations, research into educational attainment and workforce development, and data on Indiana's current educational, economic, and workforce development landscape.

c. Estimate of Any Cost Savings to Regulated Industries – In a 2021 Indiana Commission for Higher Education Early College Report, the Commission demonstrated that earning the Indiana College Core during high school would save families between $4,200-$10,500 in college tuition depending upon whether their child attended a 2- or 4-year post-secondary institution.

a. Estimate of Compliance Costs for Regulated Entities – As schools increase access to work-based learning opportunities for their students, and as their students take advantage of the new opportunities, the cost to schools of providing transportation, equipment, fees, etc. will increase accordingly. The Department estimates the cost to schools to expand work-based learning, including school based enterprises, is approximately $1,697 per student. However, the total cost imposed by the work-based learning changes in the proposed rule cannot be quantified, as many districts have existing work-based learning infrastructures that support this change, and the number of districts that will need to build out new or expand existing infrastructure is unknown. Additionally, the cost of complying with the proposed rule will vary depending on a number of factors including school size, the number of students participating in work-based learning, and the work-based learning opportunities available in surrounding communities.

The Department also examined potential costs related to the Indiana Course Access Portal ("iCAP"), which affords students an opportunity to access courses aligned to their individualized graduation pathways that aren't offered at their school. Currently iCAP courses cost $250-$300 per course while a dual enrollment course costs $550-$750 per course. To the extent changes in the proposed rule result in costs being imposed on students or schools due to an increase in the use of iCAP, those costs cannot be quantified at this time.

There may be additional cost to schools associated with teacher credentialing, as teachers must have additional credentials to teach dual credit/dual enrollment courses that lead to a credential of value. iCAP or other virtual delivery modalities may help offset some of these costs. However, determining the total cost to schools attributable to teacher credentialing is difficult due to a number of factors. In addition to costs associated with teacher credentialing, there are likely to be costs associated with the increased need for high school counseling services. A breakdown of the unit cost for high school counselors in included in Section II.b. above.

It is possible, however, that many schools will have access to additional grant funding that can be used to offset these costs. For example, schools that are successful in helping their students obtain credentials of value will receive additional funding via the Academic Performance Grant and the Credential Completion Grant. In addition to Academic Performance Grants and Credential Completion Grants, the newly established Intermediary Capacity Building Grants and Career Coaching Grants administered by the Commission for Higher Education (Commission) are competitive grants available to help offset costs related to the infrastructure needed to connect students with work-based learning opportunities and the increased demand for high school counseling services.

Finally, the funds available to students via Career Scholarship Accounts may offset costs associated with operational infrastructure, increased access to credentials, and additional work-based learning opportunities.

b. Estimate of Administrative Expenses Imposed by the Rules – As a result of the changes in the proposed rule, school corporations may incur administrative costs as they create new systems and processes to track and manage students' progress towards graduation, including the external verification of required competencies. The proposed changes will also impose administrative costs at the state level as both the Department and the Commission make necessary changes to existing data system and update data collection processes. The Department estimates the cost at the state level will be approximately $500,000. In addition to the state-level administrative costs mentioned previously, and after accounting for the use of existing licenses, the Department is expected to incur additional licensing costs, which are estimated to be $25,000 per year. Finally, the rule change will require the Department to review and update its ED-Fi data standard model to enable the collection of data not currently in the model. Updates to the Department's ED-Fi data standard model are expected to cost somewhere between $300,000 - $500,000.

The investment of time and resources at both the state and school corporation level will be necessary to assure streamlined transmission of data. The benefits of standardizing this approach will greatly outweigh associated administrative costs, as student progress will be tracked regardless of the school they are currently attending.

c. The fees, fines, and civil penalties analysis required by IC 4-22-2-19.6 – This rule does not add or amend a fee, fine, or civil penalty.

The Department engaged internal staff, IT and management professionals, data collection, finance department, and other departments to conduct an initial cost assessment of the rule. The Department relied upon extensive stakeholder outreach and engagement (both via one-on-one meetings, as well as small groups) when evaluating the costs and benefits of the rule. Various stakeholders were represented when weighing cost factors and benefits of the rule including educators, community organizations, other state agencies, colleges and universities, philanthropy, students, parents, advocacy groups, business and industry, the Indiana General Assembly, and policy and content experts.

The Department has determined the proposed rule is likely to increase costs in the short-term due to (1) an expected increase in demand for work-based learning opportunities; (2) teacher credentialing requirements; (3) an expected increase in demand for local transportation services as students seek ways to get to the new work-based learning opportunities; and (4) an expected increase in demand for high school counseling services. While the Department is unable to determine the total estimated aggregate cost of implementing the proposed rule, the Department believes certain ascertainable costs attributable to the proposed rule are either outweighed or mitigated by the benefits of the proposed rule. As outlined in further detail above, any potential increase in costs to students and their families associated with a student's participation in advanced, credit-bearing coursework will be offset by the significant discount at which those credits are earned while in high school when compared to the cost of those same credits when earned in college. Implementation costs required because of the rule change may be offset by the cost savings associated with greater access to earn college credit, obtaining credentials of value, savings on college tuition costs, and creating opportunities for a better quality of life with increased wages for Indiana's students.

Ron Sandlin

Sr. Director, School Performance & Transformation

rsandlin@doe.in.gov

(317) 232-0962

David Buyze

Director of Policy and Special Programs

Executive Director

Indiana State Board of Education

dbuyze@doe.in.gov

317-234-1930

Notice of First Public Comment Period with Proposed Rule: 20240626-IR-511240220FNA

Notice of Determination Received: June 19, 2024

DIN: 20240626-IR-511240220RAA

Composed: Jul 30,2024 2:24:20PM EDT

A PDF version of this document.