Declining Enrollment in America’s Public Schools

Executive Summary

After decades of steady growth, the country’s K-12 public school enrollment is in sustained decline. Federal projections indicate that 40 states will experience further losses through 2030-31, driven primarily by falling birth rates, with other contributing factors including slowing immigration and the expansion of private school options and homeschooling.

This decline could cause the nation’s public education system to lose $11.5 billion in state revenues annually by 2030-31, prompting widespread staff layoffs, program reductions, and school consolidations and closures. As overall enrollment shrinks, the share of students requiring supplemental support, including English Learners, students with disabilities, and students from low-income families, is growing. Districts face the compounding challenge of serving a wider range of student needs even as total funding contracts.

The short-term tools that states used during the Great Recession — budget deferrals, reserve drawdowns, spending cuts and service reductions, and temporary tax hikes — may provide temporary fixes, but are poorly suited to structural and demographic shifts demanding long-range system redesign. Accordingly, state leaders must develop policy responses that enable local school systems to both adapt and thrive amid these changing circumstances.

This paper outlines three key recommendations for state leaders:

1. Align state funding policy with changing enrollment and student needs.
2. Provide forecasting tools, technical assistance, and system redesign grants and support that build local capacity for managing change.
3. Engage in strategic communication and case-making that strengthens public confidence and political will.

Absent a long-term vision and clear strategy for action, states risk a vicious cycle in which ongoing enrollment declines and the fiscal distress they create constrain the quality of public schools, further accelerating family opt-out, disinvestment, and erosion of public trust. However, periods of enrollment contraction can also catalyze transformation. States that act with urgency and intentionality can equip districts to emerge from this transition stronger, more resilient, and better aligned with the needs of their communities.

Recommendations for State Leaders

As enrollment continues to decline, school systems in states across the country will eventually change — the question is whether those changes will be haphazard and reactive or proactive and strategic. That depends in large part on how state leaders structure policies and funding systems that actively account for these factors. State leaders have an important role to play in shaping the conditions under which districts adapt, including whether they have the resources, flexibility, tools, support, and political cover needed to adjust to new demographic realities.

Recommendation 1: Align state funding policy with changing enrollment and student needs.

State funding systems are not designed for a period of sustained enrollment decline. As districts serve fewer students and encounter growing needs, they often face structural imbalances and budget pressure since costs do not decrease proportionately or concurrently with enrollment loss. Policymakers can modernize funding systems to better reflect these dynamics — ensuring districts have the flexibility they need to adjust budgets and programming and better aligning funding formulas with student needs — by pursuing the following strategies:

• Update K-12 funding formulas to account for enrollment change through the use of dynamic hold harmless policies or tapering mechanisms that allow funding to gradually adjust as enrollment shrinks. 
• Provide sufficient base funding coupled with local flexibility by ensuring districts have adequate base funding that covers their fixed costs while also granting districts flexibility in how those funds are used. 
• Update formula weights for higher-need student populations. As student needs change — for instance, as districts serve a growing share of students from low-income households or English Learners — policymakers should ensure that funding formulas include sufficient weights for these groups.

Recommendation 2: Provide forecasting tools, technical assistance, and system redesign grants and support that build local capacity for managing change.

The state can play a critical role in ensuring that districts are not left to tackle enrollment declines on their own. Many local districts lack the tools, guidance, and capacity needed to adjust their budgets and redesign their systems and programs. Districts may need support in navigating the complex political dynamics that accompany decisions about budget reductions, including staff layoffs, program reductions, and school consolidations and closures. States can support districts by building infrastructure and capacity and creating collaborative partnerships to:

• Offer user-friendly tools for forecasting and fiscal planning that help districts forecast enrollment changes in their communities and model the budget implications of different scenarios.
• Provide guidance, technical assistance, and resources that help districts adjust budgets, staffing, master schedules and instructional programs, facilities plans, and attendance zones in response to enrollment declines.
• Fund local planning and system redesign via planning grants and support that help districts redesign their systems, develop new facilities plans, or plan for district or school consolidations.
• Support effective labor-management collaboration, since declining enrollment often necessitates difficult decisions about salary agreements, staff reductions, and school consolidations.

Recommendation 3: Engage in strategic communication and case-making that strengthens public confidence and political will.

In addition to policy and technical support, state leaders play an important role in shaping how declining enrollment is understood and addressed. With strategic communication methods, state leaders can help build public understanding of enrollment trends, reinforce public confidence that declines will be managed responsibly, and create the political cover needed for districts to make difficult but necessary decisions. Suggested strategies that can support local leaders include the following:

• Convene legislative or agency-led hearings to surface trends and solutions. These hearings can create space for district leaders and other interest holders to discuss the challenges and implications of enrollment trends and to share practical responses (e.g., adjusting staffing models, repurposing facilities).
• Spotlight innovation opportunities and success stories, sharing examples of districts that have adopted promising new school designs, facilities plans, staffing models, or cross-sector partnerships amid shrinking enrollment.
• Provide political cover for difficult decisions. State leaders can use the bully pulpit to emphasize the importance of aligning services with enrollment realities and normalizing the fact that budget realignment will be necessary. 
• Encourage districts to innovate in response to changing demographics, student needs, and family preferences. By framing enrollment decline as an opportunity to better align offerings with student and family needs, states can support districts in strengthening both quality and relevance, helping to retain and attract students over time.

To learn more about what state leaders can do, download and read Declining Enrollment in America’s Public Schools.