Indiana schools that let too many kids graduate even after they fail state tests will have to explain to the state how they will improve under a new rule.

The state has a waiver process to allow students who have not passed one of Indiana’s two required graduation tests — in 10th grade English and Algebra 1 — to receive a diploma if they meet other criteria. In 2012 more than 9 percent of Indiana high school graduates needed a waiver or their test scores would have blocked them from receiving diplomas. By comparison, Ohio has a similar rule but less than 1 percent of graduates there use waivers.

In 2012, an Indianapolis Star investigation found Indiana schools made widespread use of waivers to boost graduation rates, prompting a summer study of the issue by the Indiana legislature and changes to state law in 2013. As part of a series of changes to state laws about remediation help for struggling students, the legislature last year made those who use waivers to graduate ineligible to receive any state financial aid for college. That rule goes into effect starting next school year.

That helped cause the percentage of graduates using waivers to drop dramatically, to 6.8 percent for 2013. But the Indiana State Board of Education wants even fewer waivers.

That’s because even with the three-percentage-point drop in waiver use statewide, many schools still use them liberally. In fact, state board members were told in a meeting last week that about a third of all high schools allowed 10 percent or more of their graduates to use waivers in 2013, a number that has been relatively steady for three years.

Last year, seven Indiana schools saw at least half their graduating classes use waivers, led by Kokomo’s Victory Christian Academy with all 17 graduates using one. John Marshall High School of Indianapolis Public Schools had the highest use in Marion County at 33 percent of graduates. (Find your school’s waiver rate here.)

Statewide, about one in six Indiana high schools had more than 10 percent of graduates using waivers in each of the last three years, which means they would be subject to the new rule the state board passed last week.

That rule requires any school with more than 10 percent of graduates using waivers for three straight years to submit a plan to the Indiana Department of Education for how they will reduce the number. If they remain above 10 percent for a second year, the state will assist in rewriting the plan.

“I want all children to get a diploma that means something,” state board member Dan Elsener said before a unanimous vote in favor of the rule.

The new standard was established after a study of waiver rates and a survey of 137 principals around the state. The study showed waiver rates were not strongly affected by students in special education, as some principals suspected. Special education students must meet the same graduation criteria as other students and can obtain a waiver by following the same steps.

The survey showed most principals were comfortable with the new rule, a sentiment echoed by Steve Baker, principal of Wells County’s Bluffton High School.

“Ten percent over three consecutive years is a fair number for students and a fair number for schools,” said Baker, who is on the executive board of the Indiana Association of School Principals. “Assisting schools, versus punishing, is alway a better route.”

Baker defended the use of waivers, saying students who complete all their other high school requirements and meet the waiver expectations should not be blocked by a test score.

“If you’ve looked at the waiver, it is a very comprehensive criteria a student must meet,” he said. “Those students who were granted waivers are very productive members of our community.”

Seniors who fail to pass one of the required tests can earn a waiver if they had 95 percent attendance and earned a C average in that subject. They must have taken the test each time it was offered, undertaken any test preparation help offered at school and presented a teacher’s recommendation as well as one from the principal. If they do all those things, they can be granted a waiver.

Critics say waivers were not intended for so many students but only for unusual cases, such as students with serious test anxiety who otherwise do quality schoolwork.

Henryville High School Principal and state board member Troy Albert said involving the state after three years above 10 percent made sense.

“You have to have a trend that shows you are not trying to meet that standard,” he said. “It will discourage a lot of principals from cheating.”