Widespread school enrollment declines undoubtedly come with challenges, but that’s not the whole story.
June 1, 2026 — Across the country, public school districts are seeing steep drops in enrollment. This trend has prompted something of an existential reckoning in the education world. In the media, the trend is regularly characterized as a “crisis.”
Often ignored are the potential opportunities that could stem from school enrollment declines, benefits which could range from less overcrowding; to smaller class sizes; to restoration of art, music, and other specialized spaces; to greater room for and focus on both high needs and special needs students; to new pedagogical techniques; to larger-scale societal impacts like reimagining school campuses to meet other community needs.
“There are lots of other ways to be thinking about this and dealing with it that are not being discussed,” said Linda Darling-Hammond, the chief knowledge officer at the left-leaning Learning Policy Institute and president of the California State Board of Education. “Some places are really re-imagining school, and they will ultimately get the benefit of the declining enrollment.”
What will really happen to education spending?
Perhaps the greatest concern expressed about school enrollment declines is the prospect of decreased funding for schools. This concern rests on the assumption that school funding formulas are based on static per-pupil allocations. But, in practice, that’s not how the majority of school funding is allocated. And, even if overall education spending were to decline, per-student spending could go up, as it has in many districts with drops in enrollment.
“School finance experts should know better because federal state and local funding, a lot of it is not enrollment driven,” said Ben Scafidi, a professor of economics at Kennesaw State University in Georgia.
Scafidi’s research shows that in general, enrollment declines are actually associated with more funding per student. Between 1999 and 2019, school districts across the country with declining enrollments lost 3.7 million students. During that same period, school staffing increased by 17,000, Scafidi found in a 2025 paper.
“What we show is on a per-student basis, you have more resources for those children if they are in a declining enrollment district relative to if they are in a growing enrollment district,” he said. “They have more access to teachers, more access to counselors, more access to psychologists.”
In some cases, these funding trends are the result of “hold harmless,” or “grandfather” policies that freeze funding formulas at rates based on enrollment from prior years. There are a wide range of hold harmless policy designs, with some lasting for just one year and others lasting decades or more. Many of these policies are set to expire in the coming years, a prospect that could lead to reduced education spending.
Some education researchers and advocates think that teacher layoffs and budget cuts are a necessary part of adapting to declining enrollments — and that hold harmless policies could be deferring the inevitable. These policies “reduce the incentive for school districts to right-size operations or innovate in response to budget constraints,” Adam Garth Smith and Christian Barnard wrote in a 2024 report for the libertarian Reason Foundation.
But even without hold harmless policies, trend lines suggest that per-student funding will grow, rather than shrink. Governments and taxpayers have generally kept tax revenues dedicated to education steady. These revenues grow along with the economy, regardless of what happens with school enrollments. “As the U.S. economy has grown, tax revenue has gone up, and politicians have tended to give a bit more to schools each year,” Matt Barnum wrote earlier this year in Chalkbeat.
A 2025 report by the nonpartisan Public Policy Institute of California found that if the state keeps its status quo school funding formulas in place, and enrollment trends continue, it will have an additional $7.5 billion in per-student funding by 2030.
“The question is, are we going to spend that in a way that’s more effective or less effective?” said Julien Lafortune, a senior fellow at PPIC and one of the report’s authors. Right now, there’s very little research or guidance from state governments on how school districts should navigate this transformation. “I don’t know that I can point to a lot of examples where districts have done this well.”
Deciding what to do with the enrollment decline dividend
With more money available per student, school districts face tradeoffs as to how and whether that money should be spent. Smaller class sizes, more specialized programming, higher teacher salaries, or simply reducing overall education spending are among the competing policy priorities. School districts will have highly consequential decisions to make.
Conservatives have long argued that education spending in the U.S. is divorced from results. Enrollment declines offer an obvious line of argument to make the case for bending the cost curve: funding could be reined in even without lowering spending per student. In contrast, a recent Wisconsin policy change establishing a compounding per-student funding formula, despite falling enrollment numbers, “will guarantee ever-growing spending without improving student outcomes,” Daniel Buck and Cory Brewer wrote in a Washington Examiner op-ed.
They call the policy “emblematic of a larger trend” in liberal education policy, in which there are “no changes to the education system, just more of it — more money, more regulation, more programs, more unions, more credentialing for teachers, and more preschool.”
Other advocates and analysts say a better student-teacher ratio and expanded services and offerings are exactly what schools need.
“Optimally,” the enrollment decline “would allow for special needs kids to get their services in actual rooms rather than hallways, closets, and stairwells, where a lot of them are still getting their services, which is un- unacceptable,” said Leonie Haimson executive director of the New York-based advocacy group Class Size Matters, which advocated successfully for an as yet only partially implemented class size reduction mandate. She added that at some New York City schools, lunches are staggered at odd hours to accommodate bloated student bodies. That’s something that could change as the school district shrinks.
Already, enrollment declines in New York City have made a positive difference on overcrowding, though benefits have been unevenly distributed across the city, Haimson said.
“The first thing that has actually made a positive difference in our schools in terms of overcrowding . . . has been declining enrollment,” she said. “If we want our kids to be able to enjoy anywhere near the conditions that kids in the suburbs enjoy every day as a matter of right, we should be welcoming that trend line,” she added.
Haimson noted that enrollment declines in New York have allowed “some schools to regain the use of rooms that were originally slated for art, music, libraries, et cetera, or even rooms for special education services.” Though there’s little evidence that this effect is happening elsewhere, it’s a possible outcome of well-managed shrinkage.
In Broward County, Florida, an enrollment decline of nearly 9 percent between 2014 and 2024 has created the opportunity for more specialized programming because larger schools can typically support more extracurriculars than smaller or under-enrolled ones, said Valeria Wanza, the district’s chief strategy and innovation officer. Over that period class sizes have “pretty much held steady,” she added.
Enrollment declines, and the flexibility with facility space and student-teacher ratios that they create, could help schools move toward more “individualized, personalized,” learning environments, Darling-Hammond said. At a time when “our kids have greater needs than before,” schools need more flexibility to serve those needs, she said. If schools don’t adapt during this transitional moment, “we will actually exacerbate declining enrollment, because kids who cannot fit into [the old] model will continue to leave.”
Ideally, smaller class sizes and specialized services would be concentrated among the student populations most in need, said Thomas Dee, an education professor at Stanford. “Declining enrollment will shrink class sizes, and there’s evidence that smaller class sizes help students, but it’s particularly helpful when it’s targeted at very early grades.”
But right now, he said, this process is happening haphazardly. It’s not clear that simply investing in smaller class sizes across the board is “the best use of scarce district resources in terms of supporting student development,” Dee said.
Additional potential strategies for investing in enhanced school quality could include creating more remedial classes, advanced classes, non-academic electives, and other specialized learning experiences.
A better chance to retain teachers?
Many school districts are struggling to hire and retain teachers, and the profession is losing popularity, said Michael Petrilli, an education researcher and the president of the right-leaning Thomas B. Fordham Institute. “There’s been a decline in the number of young people who say they want to become teachers,” he said. “That’s what’s gotta change if you want to see a really big movement in policy and in practice.”
One potential outcome of more spending per student could be better teacher pay, which, in turn, could help attract and retain teachers. But so far, it doesn’t appear that this outcome has come to fruition.
Scafidi’s research found that school districts with declining enrollments had “no detectable advantage” on teacher pay as compared to those with growing enrollments.
“There’s a lot of skittishness out there about raising salaries,” Darling-Hammond said. In the face of declining enrollment, “districts are sometimes feeling that they have to do layoffs if the total amount of money that’s coming to them has dropped,” she said.
Another potential outcome of school enrollment declines that is not yet borne out by the data is improved working conditions for teachers. If class sizes are smaller, teachers may have a more fulfilling experience that leads them to remain in public schools, rather than defecting to privates or charters.
Overall teacher shortages make teaching less appealing as a career, according to the Learning Policy Institute. Other important factors for “teacher attractiveness” include time for professional development, mentorship, and expenditure per pupil — factors that could be affected positively by enrollment declines.
Improving teacher quality
School enrollment declines could bring to a head long-running debates about the optimal way to improve teacher quality. Right-leaning education policy analysts view this moment as an opportunity to cull low-performing teachers. Those on the left, with close relationships to teachers’ unions, tend to be wary of all teacher job cuts.
In a constrained teacher labor market, like the one that exists today, “you can’t fire the bad teachers because there’s nobody willing to take their place,” Petrelli said.
But with a smaller overall workforce, school districts have more flexibility on whom to hire or fire, Scafidi said. “If a district really did have to lower its teaching force, they could, they could get rid of . . . the worst teachers in the district,” he said. “The payoff on that educationally is massive.”
Darling-Hammond disagrees, imploring school districts not to reflexively lay-off teachers in the face of enrollment declines. “We are seeing places that are sticking with the old way,” she said. “They’re laying off teachers; they’re therefore not getting the benefit of smaller learning environments.”
However, Darling-Hammond added that strict rules attached to federal and state education dollars force school districts to hire more bureaucrats than they would otherwise need. “When we give resources to schools in these very inflexible ways with all kinds of audit strings and categorical rules attached to them, they have to hire a lot of green eyeshade people,” she said. “That then takes away from the resources you want to be spending on teachers and other services for kids.”
One model for improving teacher quality comes out of Washington, DC. In 2010, the district simultaneously increased teacher pay substantially and fired the lowest performing teachers. The impetus was rewarding the best teachers, not downsizing, Dee said, calling the program “really effective.”
Reimagining school campuses
School closures are a very likely outcome from enrollment declines. This presents opportunities for using these facilities, or the underlying real estate, in a different way. Different kinds of opportunities could emerge where a school is downsized, allowing for other uses to co-exist on the campus.
Broward County closed one school last year, and will close six more in the coming academic year. Wanza expects more closures, out of its total portfolio of about 230 schools, in the years to come.
Broward County is looking at a wide range of reuse opportunities for its shuttered school properties, Wanza said. The school it closed this year has become an early childhood education center. Other uses it’s considering for other school properties include a technical college, an administrative building, a public safety training facility, and an affordable housing development.
School-to-housing conversions are the fastest growing type of reuse of existing property in the U.S., according to a report from RentCafe. In 2024, nearly 2,000 apartments opened on former school properties, three times more than in the prior year. Closed school campuses, like other abandoned buildings, can attract vandalism and squatting, adding urgency to the project of giving these buildings new life. Historic school buildings in cities like Philadelphia and Atlanta have proven popular with residents attracted to the unique architecture.
There are also ways to partially transform school properties to accommodate more uses on the same site. New York City’s Education Construction Fund has created 18,000 school seats, 1.2 million square feet of office space, and 4,500 homes on school properties. Most of that development took place during the 1970s, but the agency has more big projects underway, including a twin-towered residential high-rise project atop a school in downtown Brooklyn.
Capturing some of the value of school properties could be a financial boon to school districts and city governments, Scafidi said. “You could imagine lots of things” on these properties, Scafidi said, citing health centers, community colleges, and housing. “It just depends on what that community might need.”
Darling-Hammond says school districts, particularly those in California, need relief from strict regulations that govern how districts can spend their money in order to reimagine their campuses. One way she’d like to see schools use that flexibility is creating more “community schools,” that co-locate community facilities like childcare, clinics, and other social services on school campuses.
Dee thinks pre-K programs are a particularly good use to locate in shuttered or downsized school campuses. Governments in places like California and New York City are increasingly subsidizing these programs, but accessing space has been a challenge. Not only could repurposed school sites help solve the space challenge, Dee said, they could also get families acclimated in the public school ecosystem — and potentially keep them there over the long term.
But beyond pre-K, Dee is skeptical of the community schools model. “We should at least hold with some agnosticism whether schools that have trouble doing their core academic functions can also manage a myriad of other social services,” he said. The top priority for schools, amid declining enrollments, is to “focus on their core functions and making them more appealing and attractive to families around interesting curricula, evidence-based pedagogy and creating opportunities for students to access rich academic content,” he said.
School closures and consolidations —the main tools districts have to adapt to shrinking enrollment — are always fraught, Wanza said. But Broward County residents are beginning to understand that major changes are necessary to address school enrollment declines.
“What has become more apparent in our community is that it’s not just us,” she said. “It’s our neighbors to the north, our neighbors to the south, statewide, actually nationwide.”
School districts and the general public are well aware of the enrollment decline trend. The question now is whether schools persist with the status quo or whether they are motivated to make the changes needed to realize the opportunities that exist. Either schools will “look at the lemons and make lemonade,” Darling-Hammond said, or else they really will allow a doom loop to take hold.