High Stakes Literacy Testing Indiana’s IREAD-3

In 2025, Indiana instituted a new policy for minimum levels of reading at grade 3 that students must have in order to advance to grade 4 (HEA 1499/SEA 1). Exceptions to this rule include Good Cause Exemptions (GCE) that can be applied to some identified special education students, depending on their IEP, and English learners (ELs) who have been in schools less than two years (HEA 1499/SEA 1). This policy toughened the good cause requirements for EL students. Prior to 2025, the GCE was universal for all EL students regardless of time in American schools. Presently, more than 3,000 Indiana third-graders are being retained under HEA 1499/SEA 1 requiring students to pass the high stakes IREAD-3 literacy test to advance to fourth grade (Slaby, 2025). The Indiana Department of Education (IDOE) released the data during the State Board of Education meeting on November 5, 2025. Of the 84,000 third-graders who took the IREAD-3 exam, 3,040 students, approximately 3.6%, did not pass and did not qualify for a GCE, resulting in mandatory retention at grade 3. In addition, 6,950 students received GCEs and were promoted despite not passing. These exemptions were mostly for:

• Students with disabilities (75%)
• English learners (ELs) with less than 2 years of support (24%)
• A small number with math exceptionalities or prior retention

Since 2025 is the first year this policy has been strictly enforced, the number of students held back has increased substantially (Slaby, 2025).
Indiana is one of the few states to enact a high stakes literacy test in third-grade. High stakes testing is often a useful way to ensure a particular level of academic proficiency is met to allow students to succeed in a new setting, like college, or leave high school with desired skills. However, the requirement to automatically retain third-graders who do not pass the IREAD3 test without additional information or considerations, is not supported by research (AERA, 2000). These data highlight the critical need for educators and administrators to understand high-stakes standardized tests, as they can have serious consequences for students and families.

What are High Stakes Standardized Literacy Tests?

Standardized testing occurs when a group of students take exams with a set bank of questions and conducted under uniform conditions. Standardized testing plays an important role in quantitative educational studies by allowing researchers to compare performance across classrooms and districts, as well as track individual student change over time. This data is vital in efforts to support children’s literacy growth. Indiana, like many other states, administers a standardized literacy test in grade 3 to monitor student reading and writing proficiency. Indiana has administered the IREAD-3 exam each spring to third-graders since 2013 to both second and third-graders since 2024. However, unlike half of the states with standardized literacy tests in third-grade, Indiana is among 25 states that have legislation (Indiana Senate Enrolled Act/SEA1) making the standardized exam high stakes. This means that with a few exceptions (see the Good Cause Exemptions section below), if a child does not pass the IREAD-3 exam, they are automatically retained (held back) from going to fourth grade. In other words, the possibility of retention is at stake, and such a serious consequence makes the test “high stakes.

Understanding Indiana’s Third-grade Literacy Test: IREAD-3

As a result of federal legislation, in 2010 Indiana passed House Enrolled Act (HEA) 1367, also known as Public Law 109, which required reading evaluation in third-grade. In the state of Indiana, during the 2011-2012 school year, third-grade students were required to take the new Indiana Reading Evaluation and Determination (IREAD-3) assessment. IREAD consists of multiple-choice items only. Students must attain a scale score of 446 or higher in order to pass IREAD-3 (IDOE, n.d.).

Traditionally, only third-grade students were required to take the IREAD-3 exam. However, starting in 2024, second and third-grade students are required to take the IREAD-3 exam until they pass it. Here is the required sequence of events for third-grade students who do not pass the IREAD-3 exam (IDOE, 2025; IDOE, 2024):

• If students do not pass the exam in third-grade, they are required to receive extra support in literacy at school and attend (unfunded) summer school for literacy remediation.
• They may retake the test in the spring or summer up to three times.
• If they do not pass the retake, the third-grade student is automatically retained (held back) from proceeding  to the next grade level. They may repeat third-grade one time.
• Students must retake the test until they pass or are promoted to grade seven (IDOE, 2025).
  
  

Good Cause Exemptions (GCEs) Students who receive good cause exemptions may include students who have an individualized education plan (IEP);  English learners (ELs) with less than 2 years of EL support; students who attend schools with 50% or more EL populations; students who pass the math portion of the ILEARN exam; students who have already been retained twice and received intensive intervention in K-2; and students who have already repeated third-grade once. The Indiana Learning Evaluation and Assessment Readiness Network (ILEARN) is an assessment system that measures achievement and growth related to Indiana Academic Standards for students in grades three through eight, high school biology, and high school U.S. Government. The assessment system includes a through year assessment for grades 3-8 mathematics and English Language Arts (ELA) with 3 Checkpoints and one end-of-year summative assessment.

Students may not receive a GCE until they have attempted all three summer IREAD-3 retake attempts. In addition, unlike ILEARN, no read aloud accommodations are granted on IREAD-3, which makes it difficult for students who are eligible for a read aloud accommodations,  including those with dyslexia. Students who receive a GCE are still required to take the IREAD-3 exam in grades four through six and will participate in IREAD-3 spring and summer administration until they pass or are promoted to grade seven (IDOE, 2025).

There is currently no grade retention exemption for poor test takers. Neither supplemental classroom data, progress monitoring data, nor parent elections to move children on to the third-grade is considered if the child fails the IREAD-3 exam. Indiana has devoted significant resources to literacy achievement (Lilly Foundation, 2023), yet unfunded summer school and no exemption for poor test takers remain two opportunities to address a need for children in terms of policy and pedagogy (Webster, 2025).

Indiana Makes Impressive Growth, but a Disproportionate Gap Still Exists

Research has indicated that students that reside in low-income families or are Black or Hispanic are more likely to be retained (e.g., Greene & Winters, 2009; Winsler et al., 2012). According to the IREAD-3 data released by the IDOE, students who identify as Black or Hispanic have a 76.1% pass rate compared to 92.3% pass rate for students who identify as White (SBOE, 2025). Both subgroups have seen an increase in IREAD-3 pass scores for the past 4 consecutive years, yet a gap persists.

Low-income children and children of color who do not pass the state exam are the IDOE’s particular focus for Science of Reading initiatives and mandated curriculum for underperforming schools who serve a majority of this population of students (Jenner, 2024; Pak-Harvey, 2023). Further, although the state emphasizes a focus on literacy components including phonemic awareness, phonics, vocabulary, fluency, comprehension, recent research has increased the importance of instruction in oral language and writing as well (Datchuk & Dembek, 2018; Duke & Cartwright, 2021; Mass Literacy, 2021).

Neutral and Harmful Impacts of Grade Level Retention

There is robust scholarship outlining the harm grade level retention can bring in the early grades (e.g. Darling-Hammond, 1998; Reynolds, Temple and McCoy, 1997). One ‘classic’ study longitudinally tracked children whose schools routinely held them back in Baltimore. It found that while children experienced little self-esteem or academic harm, there was still “something about the experience that apparently weakened repeaters’ attachment to school” (p. xi, Alexander et. al, 2003). High stakes testing and subsequent grade level retention also disproportionately negatively affect disadvantaged/marginalized groups. Of great concern is the fact that the highest retention rates are found among “poor, minority, and inner-city youth” (National Association of School Psychologists [NASP], 2011, p. 1). Children of color (Frey, 2005; Greene & Winters, 2009; Katsiyannis, Zhang, Ryan, & Jones, 2007), children with disabilities (Katsiyannis et al., 2007), and poor children are more likely to be retained (Alexander et al., 2003; Meisels and Liaw, 1993, Reynolds, 1992, Winsler et al., 2012). These findings suggest that retention does not serve students’ long-term needs. Increased retention based on a single test brings decreased local control for parents and educators, can impact children’s self-worth, as well as increase special education referrals. 

The research is inconsistent on the impact of retention. Recent studies have been done in both Mississippi and Florida concerning the effects of third-grade retention due to not passing a high stakes exam. Mississippi research has shown neutral to positive results as a result of retention. Students who have been retaining in Mississippi scored  substantially higher in state sixth-grade literacy results and no significant impact on other outcomes (Slungaard Mumma & Winters, 2023). Further studies need to be completed in these states and Indiana to track the outcomes of student retention.

Cost of Retention

As teachers and principals are held more accountable for student performance, many states use retention as an intervention strategy for students who are performing below grade level. When a school retains a student, the school district incurs additional costs of educating that student for an additional year. It has been estimated that nearly 2.5 million students are retained each year at a cost of over 14 billion dollars annually (Dawson, 1998; Shepard & Smith, 1990; Stipek & Lombardo, 2014). Texas, for example, retained approximately 202,099 students (4.8% of total students enrolled) during the 2006–2007 year; based on the average per student yearly 93 expenditures of $10,162 that year, the cost was more than two billion dollars (NASP, 2011). Current research shows the cost of retention has risen substantially since 2006-2007. It could cost the state more than $105.6 million at $13,200 per student (Skiba, Scheurich, & Murphy, 2024; Smith, 2023). On the other hand, the cost of being an illiterate adult is substantially more. Every student who does not complete high school, frequently due to the inability to read, costs our society an estimated $260,000 in lost earnings, taxes, and productivity.

Teacher Knowledge

Tomkinson’s 2016 study of Indiana superintendents, administrators in special education, and elementary school principals found gaps between teacher knowledge of literacy instruction and implementation in the classroom. The top three themes identified included a lack of on-site professional development for teachers in the area of reading instruction, not enough teacher training in the area of reading at the university/college level, and a lack of differentiation of instruction. Additional teacher training and professional development in differentiation of instruction and how to effectively teach reading may help close the gap between teacher knowledge and reading instruction (Tomkinson, 2016).

House Enrolled Act (HEA) 1558 (2023) and  Senate Enrolled Act (SEA) 1 (2024) revised Indiana Code (IC) 20-28-5-19.7 require Indiana teachers teaching elementary, early childhood, or special education  to complete 80 hours of training in effective reading instruction and take the new reading PRAXIS exam (PRAXIS Teaching Reading, 5205) to renew their license. The IDOE has also required schools with students who score below 70% on the IREAD-3 choose a curriculum on the approved reading curriculum list (IDOE, n.d.). Although this initiative has been met with some resistance,  it is imperative that teachers have the knowledge and the resources to provide high quality reading instruction.

Recommendations

For a host of complex reasons, minoritized and low-income students are particularly at risk for doing poorly on standardized tests (Allington, & McGill-Franzen, 2017; Frey, 2005; Greene & Katsiyannis et al., 2007; Tavassolie & Winsler, 2019; Winsler et al., 2012; Greene & Winters, 2009). With few exceptions (IDOE 2024), if children do not pass, even with intervention support, they must automatically repeat third grade. If the IREAD-3 exam is not passed during spring testing, the state requires children to engage in summer school, then retest during the summer. However, summer school is currently unfunded and varies widely from a 2-week online experience to 6 or more weeks of in person schooling in targeted, small intervention groups integrating fun, motivational activities (Superintendent personal communications). It is recommended that summer school and remediation be fully funded by the IDOE to ensure each student has equal access to high quality, evidence-aligned instruction to support reading instruction. It is also recommended that higher education institutions and the K-12 systems continue to ensure teachers have the training and the resources they need to provide evidence-based, effective reading instruction. Evidence-Based Reading Instruction (EBRI) is essential to ensure teachers can utilize data to provide targeted, explicit, systematic, and direct instruction. Higher education institutions should also embed courses in linguistics in their teacher preparation programs to ensure pre-service teachers can comprehend the English language and understand the research behind how the brain learns to read, otherwise known as the science of reading. Research is clear that when teacher knowledge in effective instruction increases, so do student results. Teachers’ content knowledge plays a key role in student reading outcomes (Iowa Reading Research Center, 2025).

References

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Alexander, K. L., Entwisle, D. R., & Dauber, S. L. (2003). On the Success of Failure: A Reassessment of the Effects of Retention in the Primary Grades. New York, NY: Cambridge University Press.

Allington, R. L., & McGill-Franzen, A. (2017). Summer reading loss is the basis of almost all the rich/poor reading gap. In The achievement gap in reading (pp. 170-184). Routledge.

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Beck, C. (2025). New Indiana IREAD law sparks parent concern as student retention set to rise. Indianapolis Star. Retrieved fromhttps://www.indystar.com/story/news/education/2025/07/28/new-indiana-3rd-grade-iread-law-raises-parent-concerns-over-retention/84264183007/

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