Where have all the students gone?

43 states experienced enrolment declines over SY20-22, with variation by state: Oregon, New York, Kentucky and Mississippi experienced the greatest declines of +5%.³ State level changes in enrolment over this period were not closely correlated with demographic changes such as changes in birth rates.

Elementary grade levels experienced much steeper declines in student enrollment than middle or high school grades (Figure 2), with highest declines occurring at the pre-K level of (11)%. Similarly, these declines outpaced demographic changes, suggesting that there is more at play than declining birth rates.

a. Charters: Charter enrollment growth rose during the pandemic (with 1.5-2x the number of students enrolling annually between SY20-22 vs. SY10-20⁴), as parents sought smaller class sizes, and, in some cases, more in-person instruction.

b. Virtual schools: As more families realized that remote schooling could be a fit for their students, virtual schools have seen significant growth. Multiple states have seen enrollment increases in their virtual programs, and the number of districts planning to run a virtual school increased ninefold in SY22 vs. pre-pandemic.⁵ Some fully virtual school providers experienced revenue growth of ~25% through the pandemic.

c. Private schools: While comprehensive data on private school enrollments is limited, anecdotal data, including trends in Catholic School enrollments, suggest that private schools saw an increase in enrollment as a result of COVID-19.

d. Homeschooling: The country experienced growth in student homeschooling of ~50%-60% pre-COVID-19 to Fall 2020,⁶ with many more parents choosing to take their children out of school for health and safety reasons, or choosing to defer the start of their public-school educations.

While domestic migration does not explain the national decline in enrollment, it did have meaningful localized impacts. Migration patterns within the US, primarily from the Northeast to the South and West, were exacerbated by COVID-19 (with a ~10% increase in people moving per year).⁷ The US also saw increased movement from urban areas to more suburban and rural areas, which influenced enrollment declines in major US cities. New York City, for example, saw a net migration out of the city that accounted for a ~4% decrease in the population between April 2020 and July 2021.⁸

Regardless of where these students went, one thing is evident: they, and their families, are opting out of district schools. This raises the critical question of why. Although health and safety played a prominent role during the height of the pandemic, today, families appear to be reacting more to their perception that school districts do not best serve the needs of their children. This perception raises a key challenge for districts, which may need to market and communicate to parents and families in new ways.

If there are continued enrollment declines, how will districts adjust their budgets and prioritize spending with transparency in a tighter fiscal environment? What tools will they leverage to evaluate which types of spending most impact student outcomes

If declining enrollment translates to a reduction in funding, districts will likely need to decide between cutting budget lines entirely, reducing the breadth or depth of offerings, or pursuing free or cheaper solutions. Districts may need to look for efficiencies in spending to trim costs, while still supporting strong teacher-led instruction. Collecting data to evaluate the efficacy of spending in relation to student achievement will be critical. Additionally, given that the majority of district spend is on teachers and staff, districts will need to think critically about how to make cuts. Although fewer students will in theory need fewer teachers, the impact of learning loss may require more teachers and staff (just potentially in different grades or subject areas).

How can districts adapt their value proposition and offerings to meet the needs of a new generation of K-12 students and parents, including those looking for fully virtual or home-schooling options?

States and districts may need to better understand the evolved needs of their students and parents following the pandemic. Investment in new ways of delivering education, such as modalities and curriculum content can enhance educational engagement and outcomes. District schools may need to truly evaluate how to “compete” for students, which may require significant innovation and use of marketing and communication tools to engage parents.

Given declines in student performance on standardized tests since the onset of the COVID-19 pandemic, how will companies show that their products and services improve results for students? How will they demonstrate the importance of the product to the school infrastructure or teacher workflow?

States and districts can be focused on funding products and services that are used daily, serve as the platform on which other products sit, and can demonstrate high usage and efficacy in helping student’s close gaps in reading and math achievement. Conducting studies and research to provide evidence for the impact a company is having may help justify maintaining the product or service in the face of cuts. Data reporting capabilities will likely become increasingly important as districts look to increase transparency around spending and results. Additionally, products that increase engagement with schools will likely rise in demand. Parent communications, high-quality websites, applications, etc., will likely become part of district’s strategies to encourage enrollment.

In the event of lower K-12 funding, what competitors or substitutes might a district consider for a product/service?

Companies that are aware of competitors and their relative positioning can be better prepared to respond to potential threats as districts consider their options. In the short term, this may mean companies investing more in understanding their own value to customers relative to other solutions.

How would lower K-12 enrollments impact revenue based on current pricing models?

Many third-party providers for K-12 districts contract on a per pupil basis, exposing them to risk from declining enrollments. Shifting to non-headcount-based contracts may ensure more consistent revenue where there are declines in enrollment.

How can a product or service address the needs of students and families who are opting out of traditional public schools?

To the extent that trends toward home-schooling and/or remote schooling options persist, companies have an opportunity to expand offerings to provide solutions to families and nontraditional schools.

How can a product or service help districts to engage with and communicate with the families they need to attract, and ultimately keep, in their school districts?

Many third-party providers are now introducing marketing and communications tools to help districts with this question. It is likely that this will be a continued need for many districts, in a way that it simply has not been in the past.