KBRA Releases Research – Shrinking Enrollment, Sticky School Footprints: The Mismatch in Public Education

NEW YORK--(BUSINESS WIRE)--KBRA releases research discussing the mismatch between declining traditional public school enrollment and the number of schools that districts continue to operate.

Enrollment in traditional¹ public schools is declining across much of the U.S., while the number of schools operated by those districts has declined much more slowly.² A recent academic study found that declining enrollment is associated with a greater likelihood of permanent closure among traditional public schools.³ The lag in school closures is significant because many district costs do not decline at the same rate as enrollment. Districts still need to maintain buildings, administrative functions, transportation networks, and other fixed expenses even as student counts and, where applicable, enrollment-linked revenues decline. National research focused on traditional public school districts has found that many districts experiencing enrollment losses have made relatively few changes to the number of schools they operate, contributing to smaller average school sizes and greater underutilization of existing facilities.⁴ Over time, a persistent mismatch between enrollment and school capacity can strain financial operations and increase pressure to consolidate programs or close schools as districts attempt to align costs with a smaller student population.

Key Takeaways

• In many districts, declining enrollment has contributed to greater underutilization of existing school facilities.
• A mismatch between enrollment and school capacity can strain operating flexibility.
• A recent academic study found that traditional public schools with declining enrollment are more likely to close.
• The lag in closures is critical because many district costs do not decline at the same rate as enrollment.
• Public school enrollment declines are expected to persist over the medium term, reflecting demographic pressures led by falling birth rates, slower immigration, and interstate migration in some states, along with greater use of private schools and homeschooling.
• KBRA’s assessment of school district credit profiles will incorporate a review of the impact of enrollment declines on the district’s overall financial position.

Click here to view the report.

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¹ In this discussion, “traditional public schools” generally refers to public schools other than public charter schools, consistent with National Center for Education Statistics (NCES) terminology. Definitions used in individual studies may vary and are noted alongside citations where relevant.

² Christine Dickason, Paul Beach, Carrie Hahnel, and Andy Jacob, Systems Under Strain: Warning Signs Pointing Toward a Rise in School Closures, Bellwether, August 2025. https://bellwether.org/publications/systems-under-strain/. Bellwether’s analysis focuses on traditional public school districts and traditional public schools and excludes charter schools and districts composed entirely of charter schools. Its sample also excludes districts with fewer than 500 students and certain districts with missing data.

³ Sofoklis Goulas, Enrollment Declines and Permanent Closures in Public Schools, IZA Discussion Paper No. 17902, May 2025. Goulas classifies schools as traditional public or charter using the NCES charter-school indicator. The analytical sample further excludes alternative schools/programs, adult centers, and fully, primarily, or exclusively virtual schools.

⁴ Christine Dickason, Paul Beach, Carrie Hahnel, and Andy Jacob, Systems Under Strain: Warning Signs Pointing Toward a Rise in School Closures, Bellwether, August 2025. https://bellwether.org/publications/systems-under-strain/.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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