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The Enrollment Cliff: How Economic Tools Help Districts Respond to Declining K-12 Numbers
American public schools face a perfect storm of challenges threatening their financial stability and operational effectiveness. The enrollment cliff—driven by declining birth rates, increased competition from alternative educational options, and shifting family preferences—demands immediate strategic responses from district leaders nationwide. Research and evidence-based implementation from around the world reveals that optimizing enrollment processes is an effective way for districts to drive both retention and achievement.
The Multifaceted Enrollment Crisis
Public school enrollment in the US has dropped significantly, with PreK-12 enrollment falling by more than 2% from SY19 to SY22. This decline reflects more than temporary pandemic disruption, however; it represents a fundamental demographic and competitive transformation affecting districts across all regions and sizes. Federal projections estimate a further 1.5M decline in public enrollment from SY25 to SY30. This decline stems from multiple converging factors that districts must address simultaneously.
- Declining birth rates create the demographic foundation of the enrollment cliff. Since the Great Recession, birth rates have declined by 17%, and the pandemic saw some of the lowest birth rates in recent decades.
- Rising competition from established alternatives, including private and charter schools, compounds demographic pressures. State Education Saving Account (ESA) programs are on the rise, funnelling public funding to private options everywhere from Texas to New Hampshire. Supported by these programs, private school enrollment has grown substantially—a 5% increase in median enrollment from SY19 to SY23, according to NAIS. Families are pulled toward choice programs within public systems too. Charter enrollment rose by 80,000 in SY23, a year that otherwise saw traditional public enrollment declines.
- Less-institutionalized alternatives like homeschooling and microschools also represent a competitive force to consider. The homeschooled population doubled to 6% during the pandemic. A smaller but growing population attend microschools, an emerging model that has also benefited greatly from the rise in ESAs.
As enrollment threats arrive from multiple directions, our team examined what this means for districts.
Financial Impact and Operational Challenges
With district revenue directly tied to student enrollment, each student lost to another school represents a shrinking budget. And with a smaller population, the competition for students has become ever greater. Expiring ESSER funds also means districts must now turn to long-term, budget-conscious solutions to address the following challenges that accompany the enrollment crisis:
- Unpredictable revenue due to competition. Year-to-year enrollment uncertainty makes budget planning difficult, and long-term investments become harder to make.
- Loss of operational scale. Building costs, staff salaries, and equipment expenses are not easily reduced at a per-pupil basis, leading to operational efficiency losses that result in compounding budget shortfalls.
- Increased administrative burden to boost enrollment. In a fiercer marketplace, student acquisition costs continue to increase. Just as districts hope to invest more in student services and educational programming in order to stand out, it seems more and more essential to divert funds toward expensive and unproven marketing coordination efforts.
Digital Transformation as Strategic Response
Marketing is often the first thing that comes to mind when trying to boost enrollment. While building awareness is critical, success hinges upon the details. Nicely worded flyers and descriptions of each school’s extracurricular activities or test score averages may not suffice. TetherEd’s smart platforms are built upon a decade of academic research, several papers published in economics journals, and world-wide implementation; they center around a few characteristics:
- Transparent system coordination. Families access centralized hubs to learn about school options, seat availability, and application requirements. Enrollment timelines are coordinated, helping alleviate the costs of navigating fragmented processes and allowing families to directly compare options—especially helpful for districts with choice programs.
- Real-time application guidance. Instant, personalized guidance ensures family references are realized, identifying potential errors, missing documents, or better school matches before submission. Even in districts with primarily zoned enrollment and a rarely-used transfer window, optimizing the process ensures that every student finds their seat without hiccup.
- Measurable outcomes. TetherEd generates comprehensive analytics to track enrollment efficiency, with comparisons available against historical outcomes or hypothetical scenario modeling (different lottery mechanisms, different levels of application assistance, etc). Tracking outcomes like seat utilization and conversion rates enables continuous improvement by identifying bottlenecks, allowing admin teams to focus on community partnerships rather than manual data reporting.
When put to the test, districts that implement TetherEd’s smart platforms see measurable improvements in family satisfaction, enrollment, and even long-term student achievement due to improved student-school matching. On the inside, districts can reduce admin time and speed up processes, all while leveling up their strategic planning with enhanced enrollment forecasting and analytics.
What would this look like in practice? Just ask the US districts that have already launched pilots with us, like LAUSD or New Haven, or our international partners—Chile (the whole country), major cities in Colombia, and Copenhagen. Trained in economic academia and enabled by field-leading technology interventions, our team translates generalized knowledge of “what works” to improve outcomes for each individual district we work with.
Read more about the mechanics and rigor of our smart platforms here, or reach out directly at zack@tether.education.