Parents of more than 200 students will now have to find alternative schooling.
Less than a third of students at the Indianapolis Project School passed ISTEP tests -- well below the state average of 71 percent.
The Board of Education says adding fourth-through-sixth graders would in essence extend the state takeover to schools which haven‘t been classified as failing.
Private and charter school advocates organized a rally for students at the Indiana statehouse Wednesday.
The state superintendent said the questions centered around making sure the state, turnaround school operators, schools and community work together.
The reasons for the schools' improvement vary, say teachers and administrators.
Daniels says the legislation is a step towards giving all Hoosier children a chance at a quality education.
Governor Daniels calls the 2011 session a success while Democrats say some of the bills that were passed will hurt Hoosiers.
Charter schools in Indiana set to expand greatly with Governor Daniels' signature.
Opponents of the bill say it will drain money from the traditional public school system.