Peske has a point. The nationwide average teacher salary fell by over 6 percent between 2002 and 2022, going from $75,152 to $70,548 in 2023 dollars, according to new Reason Foundation research. In total, inflation-adjusted teacher salaries fell in 40 of 50 states, as shown in Table 1.

It’s also a fact that teacher salaries are tied to educational attainment and years of experience, meaning that high-performing teachers—and those in shortage areas like math, science, and special education—aren’t paid more for their results or expertise.

To put the right incentives in place, bold teacher pay reforms are needed. But to maximize the long-term impact of these policies, it’s important to address the root causes of stagnant salaries. Examining data both before and after the COVID-19 pandemic reveals structural problems in K–12 finance that keep dollars out of teacher paychecks.

Table 1: Inflation-adjusted average teacher salary growth (2002 to 2022)

Teacher salaries before COVID-19

Nationwide, inflation-adjusted teacher pay was flat in the nearly two decades leading up to the pandemic, with the average salary falling by 0.6 percent between 2002 and 2020. While a handful of states saw big swings—salaries rose by 22 percent in Washington while falling 19 percent in Indiana—most states saw moderate changes, ranging from -5 percent to +5 percent over that period.

Remarkably, teachers’ salaries weren’t increasing at a time of unprecedented growth in public school funding, which rose by 25 percent per student as all but one state boosted K–12 spending from 2002 to 2020. Figure 1 shows the growth in K–12 revenue and teacher salaries during this period.

With education funding at record levels, why wasn’t more money going to teacher paychecks?

Figure 1: U.S. revenue per student growth vs. average teacher salary growth (2002-2020, inflation-adjusted)

A surge in non-teaching staff

One reason teacher pay didn’t grow with K–12 spending is that public schools spent heavily on hiring non-teaching staff. From 2002 to 2020, as student enrollment grew by 6.6 percent, non-teaching staff expanded by 20 percent. For every five new students, public schools added about one non-teacher. In comparison, the number of classroom teachers rose by 6.6 percent—mirroring enrollment growth, but well below growth in all other staff.

Figure 2 shows the growth of public-school staff by position type. The largest growth category was in student support, which includes social workers, psychologists, speech-language pathologists, and other positions. A nearly identical number of instructional aides—paraprofessionals who assist teachers and often work with students with disabilities—were also added to public school payrolls. Taken together, the data suggest that special education and a greater emphasis on wraparound services played large roles in the growth of non-teaching staff.

Figure 2: Public school staffing growth by position type (2002–2020)

Rising teacher pension debt

Another expense that diverted funding from teacher salaries was employee benefits, a Census Bureau category that includes pensions, Social Security, health insurance, and other costs. Between 2002 and 2020, benefit spending per student rose by 79 percent in inflation-adjusted dollars. While salary and wage spending increased by $573 per student, benefit spending increased by $1,745 per student. Research indicates that rising teacher pension costs were the primary factor behind this trend. States have failed to set aside enough money to pay for the pension benefits promised to teachers, resulting in unfunded liabilities that accumulate over time.

Pension debt can add up to big bucks: In 2024, the Teacher Retirement System of Texas had an estimated $62.6 billion in unfunded liabilities, while the California State Teachers’ Retirement System had $85.5 billion in debt. These costs are usually paid for by increasing school districts’ and teachers’ contribution rates to the pension plans. As a result, K–12 funding that might go to salaries has increasingly been directed toward pension costs, even as many states have reduced teachers’ retirement benefits.

Before the pandemic, the story was relatively straightforward: Teacher salaries stagnated despite significant increases in public school funding, primarily because funds increasingly went to hire non-teachers and cover unfunded pension liabilities. After the pandemic began, however, a different story emerged.

Teacher salaries after COVID-19

Teacher pay now plunged, falling 5.6 percent in fiscal year 2023 dollars, from $74,698 in 2020 to $70,548 in 2022. But this wasn’t because more dollars were going to new hires or benefit spending—the number of non-teachers dropped by 2 percent (before again rising sharply in 2023), and real expenditures on employee benefits inched up by $39 per student. While teacher turnover during the pandemic might have played a part, inflation during those years took a big bite out of teacher paychecks.  

After the onset of COVID-19, price growth reached levels not seen since the 1980s. “We currently face macroeconomic challenges, including unacceptable levels of inflation,” said Janet Yellen, who was Treasury secretary at the time.

The price level during the 2022 school year was nearly 10 percent higher than just two years earlier. Large pay bumps were needed to keep pace with inflation, far more than the usual 3 percent or 4 percent that districts typically dole out. Yet this didn’t happen.   

While school districts weren’t exactly strapped for cash—education funding rose by 7.4 percent between 2020 and 2022, reaching a new record of $20,097 per student in 2022—most of this $1,386 per-student increase came from federal Covid-19 relief funds. And because these dollars were temporary, many districts were hesitant to allocate them to long-term commitments such as teacher salary increases. Instead, they opted to spend the federal funding on things like building renovations, tutoring, and one-time bonuses.

Groups such as the American Federation of Teachers and the National Education Association lobbied hard for the stimulus funding that ultimately squeezed teachers’ purchasing power. The consensus among economists is that Covid-19 fiscal stimulus—including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act signed by President Donald Trump and President Joe Biden’s $1.9 trillion American Rescue Plan, which sent $122 billion to public schools—helped lift inflation to historic levels. Public school lobbyists won the battle for pandemic relief funding, but that money didn’t increase teachers’ take-home pay even as inflation cut their purchasing power. 

Conclusion

Public school staffing decisions and rising pension debt led to teacher salary stagnation in the years leading up to COVID-19. While teacher take-home pay failed to keep up with inflation during the pandemic, the rise in price levels was atypical—and due in part to the stimulus spending that teachers’ unions lobbied for.

For policymakers looking to boost teachers’ salaries today, states like Texas and Arkansas offer bold ideas for targeting dollars on effective teachers and those teaching in shortage areas. But to maximize the long-term impact of such reforms, they’ll also need to pay down pension debt, examine special-education costs, and encourage school districts to prioritize teacher pay over other expenses. That teachers’ wages had stagnated over two decades of unprecedented growth in public school funding highlights deep structural problems in K–12 finance that shouldn’t be ignored.

A version of this column first appeared at The Thomas B. Fordham Institute.

The post Why teacher salaries are stagnant appeared first on Reason Foundation.

“It’s no surprise that public schools are underfunded throughout the state,” claimed Anaheim Union High School District trustee Jessica Guerrero.

In reality, new Reason Foundation research shows that taxpayers are getting a poor return on their investment in California’s public schools, and the last thing those schools need is more money. Between 2002 and 2023, the state’s public school funding increased by nearly 79%, rising from $14,526 per student to $25,941 per student after adjusting for inflation.

The most recent data shows Los Angeles Unified spends $27,073 per average daily attendance, or per student, for shorthand. Santa Ana Unified spends $25,099 per student, San Bernardino Unified spends $24,881, Long Beach Unified spends $22,379, and Corona-Norco Unified spends $18,321.

California led the nation in K-12 spending growth over the past two decades, and you would expect commensurate gains in student outcomes. But results on the National Assessment of Educational Progress (NAEP) from 2003 to 2024 were disappointing, with declines in 8th-grade math and only modest gains in 4th-grade math and 8th-grade reading. The lone bright spot was 4th-grade reading, where the share of students scoring below basic on NAEP improved from 50.4% to 43.7%. That means that just over half of 4th graders are meeting the lowest reading threshold.

Despite record education funding, student outcomes have barely budged. While there is plenty of blame to go around, Reason Foundation’s data reveal structural problems with how K-12 dollars are spent. For starters, California’s public schools are a textbook case of mission creep. From 2002 to 2023, enrollment fell by 317,253 students while the number of non-teachers—including counselors, psychologists, social workers, administrators, and instructional aides—increased by 74,428.

There are fewer kids and more staff because public schools are increasingly focused on things like “whole child” development and content about everything from climate change to ethnic studies, which takes time away from core classes like math, English language arts, and science.

For example, California is spending $4 billion on community schools that provide both students and their families with healthcare, mental health support, legal clinics, and other services. These things aren’t bad, but it doesn’t make sense to turn public schools into social service hubs when nearly 46% of 8th-graders can’t do basic math and districts like Los Angeles Unified can’t cover their bills.

Teacher pension debt is also diverting resources from classrooms. In 2023, California’s public schools spent $4,900 per student on pension benefits, which include pension costs, health insurance, workers’ compensation, and other expenses. These costs have increased by a massive 134.9% since 2002, when schools spent $2,086 per student in real terms.

While benefit spending is up, teachers’ benefits aren’t any better. That’s because the main cause of this increase is unfunded pension liabilities. For years, lawmakers failed to set aside enough cash to cover pension promises made to teachers, and the bill has come due.

In 2024, the California State Teachers’ Retirement System reported $85 billion in debt, which is more than the state spends on K-12 education each year. Allowing this debt to accumulate means even fewer dollars will be spent on instruction in the years ahead, as money is shifted to pay for benefits promised to retirees and workers.

Finally, empty school buildings are eating up resources. Between 2020 and 2023, public enrollment dropped by 5.1%. Yet only seven of the state’s public schools closed in 2023-24—well below pre-COVID-19 school closure levels and fewer than rural states like South Dakota and Utah.

Public school closures are challenging for communities, but the alternative is worse. Underutilized schools are inefficient and costly, siphoning away dollars that could be used to boost student achievement with reading programs, tutoring, and increasing pay for high-performing teachers.

There are no easy fixes to California’s student achievement woes, and even more money won’t help. Policymakers must address structural issues with how education funding is spent, with a focus on academics, reducing pension debt, and closing underutilized schools.

A version of this column first appeared at The Orange County Register.

The post Southern California school districts spend big, but student outcomes have barely budged appeared first on Reason Foundation.

Today, Reason Foundation published our 2025 K-12 Education Spending Spotlight, which brings together over two decades of school finance data for all 50 states. With nationwide funding approaching $1 trillion and outcomes declining—nearly 40% of 4^th graders aren’t reading at a basic level on the National Assessment of Educational Progress— it’s critical to examine how dollars are spent and why they aren’t producing better results.    

Reason Foundation’s interactive tool, which includes data on expenditures, staffing, teacher salaries, debt, and student outcomes, can help answer those questions and is available here.

There are five key trends to know, but here’s the big takeaway: despite record funding, K-12 finance faces structural problems that undermine student achievement.

Between 2002 and 2023, public school funding rose by 35.8% from $14,969 per student to $20,322 per student after adjusting for inflation. New York now spends $36,976 per student followed by New Jersey at $30,267 per student, and funding now exceeds $25,000 per student in eight states, including: Vermont ($29,169 per student), Connecticut ($28,975), Pennsylvania ($26,242), California ($25,941), Rhode Island ($25,709), and Hawaii ($25,485).

Since the start of the COVID-19 pandemic, the largest increase in per-student spending has occurred in California, rising 31.5% from $19,724 in 2020 to $25,941 in 2023.

Michigan, Kentucky and Missouri were the next biggest percentage increasers, all spending 17% more per student in 2023 compared to 2020. Per student spending also rose by over 15% during that period in Hawaii, New Mexico, Arizona, Mississippi and Alabama.

Figure 1: Inflation-Adjusted Public School Revenue (2002-2023)

All 50 states increased K-12 funding from 2002 to 2023, but inflation-adjusted average teacher salaries fell by 6.1% between 2002 and 2022, decreasing from $75,152 to $70,548 per year. 

From 2020 to 2022, due in part to high inflation during and after the pandemic, the average teacher’s salary decreased by more than five percent in 38 states. They declined the most in North Carolina (−9.6%), New Mexico (−8.8%), South Carolina (−8.7%), West Virginia (−8.6%), and Mississippi (−8.2%).

Research shows that effective teachers are critical to student learning, so why aren’t more education dollars showing up in teacher paychecks?

One reason is that public schools are spending more money on non-teaching staff, such as instructional aides, counselors, social workers, psychologists, and instructional coordinators. Nationwide, non-teaching staff increased by 22.8% between 2002 and 2023, while public school enrollment only ticked up by 4.1%. 

This raises important questions, such as whether public schools have drifted too far from their academic mission and whether special education costs have gotten out of control.

Another reason teacher salaries aren’t increasing is that benefit spending has risen sharply, going from $2,221 per student in 2002 to $4,022 per student in 2023—an 81.1% increase. 

In 2023, employee benefit costs in New Jersey were the highest in the nation at $8,333 per student. In New York, the cost was $7,949 per student.

Research indicates that these costs are largely driven by teacher pension debt. States have failed to set aside enough funding to cover their pension promises, and now the bills are coming due. Benefit spending increased by 194.1% per student in Hawaii, 171.3% in Vermont, 169.9% in Illinois, 167.1% in New Jersey, and 166.4% in Pennsylvania.

Figure 2: Inflation-Adjusted Spending Per Student on Employee Benefits and Salaries (2002-2023)

But these aren’t the only structural issues. With enrollment falling by nearly 1.2 million students since the start of the COVID-19 pandemic, public schools will need to become more efficient by closing schools and reducing staff counts. Available data suggest that school districts have been slow to close under-enrolled schools, and the number of non-teaching staff in public schools has increased since 2020. This is unsustainable, especially since the National Center for Education Statistics projects that enrollment losses will persist for years to come.

There are no quick fixes, but one thing is certain—policymakers can’t expect a good return on investment from public schools unless structural problems are addressed. Focusing on academics, paying down pension debt, and right-sizing schools are difficult but necessary reforms that can pay dividends in the long run. 

From the states

The New Jersey Senate Education Committee advanced a proposal that could significantly limit charter schools. It would ban virtual and prohibit charter school boards from contracting with for-profit entities to manage or operate the school, and “impose residency requirements for some charter school trustees,” the New Jersey Monitor reported. Harry Lee, the president of the New Jersey Charter School Association, argued that this legislation could be “read as a moratorium on charters.”

What to watch

Also in New Jersey, on the campaign trail, Gov.-elect Mikie Sherrill supported expanding the state’s Interdistrict Public School Choice Program–a form of open enrollment. This policy is in much need of reform and hopefully she will keep this campaign promise. As of the 2023-24 school year, more than 5,000 students used it to attend public schools other than their assigned ones. Despite being operational for more than 25 years, participation is one of the lowest in the nation due to an artificial cap imposed by then-Gov. Chris Christie’s administration in 2012. 

The New Hampshire Supreme Court issued a decision clarifying the state’s cross-district open enrollment law, which allows students to transfer to schools in other districts. The court stated that every school district must have an open enrollment policy and that a transfer student’s home district is responsible for 80% of tuition costs, even if the home district’s policy is not to have an open enrollment policy. New Hampshire’s law ranks 21st among the 50 states nationwide, according to Reason Foundation’s open enrollment best practices, but the state scored just 45 out of 100 points, receiving an F grade for its transfer policies.

Tennessee Speaker of the House Cameron Sexton (R-Crossville), expressed interest in expanding the state’s private school scholarship program. Launched last year, the program provided $7,300 scholarships to 20,000 students to pay for private school tuition. While the program is scheduled to increase the total number of scholarships available to 25,000 during the 2026 school year, Sexton argued that the expansion should be greater, as 42,000 students applied for scholarships.

The latest from Reason Foundation

–Public schools without boundaries 2025: Ranking every state’s open enrollment laws

–Policymakers are increasingly supportive of public school choice

–Open enrollment is an important part of school choice in California

–Los Angeles Unified School District celebrates mediocre test scores

Recommended reading 

Ohio school districts shouldn’t be allowed to declare students “impractical” to transport

Aaron Churchill at the Fordham Institute

“Ohio districts have used this loophole to deny transportation to thousands of public charter and private school students—and this was the way Columbus ducked their transportation responsibilities last year…Statewide, almost 23,000 charter and private school students were declared impractical last year (roughly 8 percent), while only 592 out of more than 1.4 million district students—a miniscule fraction—were deemed as such. In other words, non-district students were nearly 200 times more likely to be denied transportation than students attending district schools.”

Contested questions in public schools

Ilana Redstone at National Affairs

“Despite the post-pandemic increase in the popularity of private schools and homeschooling, the vast majority of American children have continued, and likely will continue, to receive a public education. However, doing so in an institution that hasn’t acknowledged its failures ensures that both the educational crisis and its associated erosion of democratic norms will persist. This means that rebuilding trust in this institution matters — although doing so will require us to first understand how public schools lost their way.”

Rulemaking must resolve ambiguities in federal school choice law—and fast

Jim Blew at Education Next

“Governors should be prevented from adding requirements not found in the federal law, such as prohibiting SGOs from focusing on specific student groups or educational approaches. Similarly, new governors should not be allowed to remove an organization from a state’s list unless that organization falls out of legal compliance; this stipulation would preempt the sudden disruption of a student’s education due to politics.”

___________________________________________________________________________

Are you a state or local policymaker interested in education reform? Reason Foundation’s education policy team can help you make sense of complex school finance data and discuss innovative reform options that expand students’ educational opportunities. Please reach out to me directly at jude.schwalbach@reason.org for more information.

The post Funding Education Opportunity: Study examines K-12 education spending, teachers’ salaries and benefit costs appeared first on Reason Foundation.

Policymakers must have the best data possible to inform their public education decisions. The following analysis from Reason Foundation’s K-12 Education Spending Spotlight brings together the latest figures from the U.S. Census Bureau and National Center for Education Statistics and highlights five key insights from our tool and their implications for state policymakers and other stakeholders.

These critical insights include examining and ranking every state’s total K-12 and per student public school funding, the public school enrollment levels in every state and how states continue to hire more non-teaching staff even as they lose students, how and why teachers’ salaries are failing to keep up with inflation in nearly every state, how much public school funding is increasingly being shifted to cover pension debt, and the disappointing student scores on key standardized tests since the pandemic.

Total U.S. public school funding is approaching $1 trillion and now exceeds $25,000 per student in eight states.

Nationwide, public school funding increased by 35.8% between 2002 and 2023, rising from $14,969 per student to $20,322 per student after adjusting for inflation, Reason Foundation’s K-12 Education Spending Spotlight finds.

In total, U.S. public schools received $946.5 billion in funding in 2023, with New York topping all states at $36,976 per student, followed by New Jersey at $30,267 per student.

Notably, eight states exceeded $25,000 per student in 2023: New York, New Jersey, Vermont ($29,169 per student), Connecticut ($28,975), Pennsylvania ($26,242), California ($25,941), Rhode Island ($25,709), and Hawaii ($25,485).

The lowest-spending state, Idaho, was the only state spending less than $12,000 per student. Utah, Oklahoma and North Carolina spent less than $14,000 per student.

Since the start of the COVID-19 pandemic, the largest increase in per-student spending has occurred in California, rising 31.5% from $19,724 in 2020 to $25,941 in 2023.

Michigan, Kentucky and Missouri were the next biggest percentage increasers, all spending 17% more per student in 2023 compared to 2020.

Per student spending also rose by over 15% from 2020 to 2023 in Hawaii, New Mexico, Arizona, Mississippi and Alabama.

Nationally, compared to pre-pandemic levels, K-12 funding is up by 8.6%, rising by $1,610 per student in real terms between 2020 and 2023. However, the bulk of these new education dollars, since 2020—approximately $1,181 per student—are from the $190 billion in federal COVID-19 relief funding that public schools received during the pandemic. While non-federal dollars increased by $429 per student during this time, this is a departure from pre-pandemic trends, when state and local funding rose by $1,089 per student between 2017 and 2020.

Policy implications of K-12 funding levels

For policymakers, K-12 funding has increased dramatically in the past couple of decades, with public schools in all 50 states seeing substantial increases. However, with federal pandemic relief funding now expired, combined with rising economic uncertainty, declining public school enrollment, and increased competition from school choice and homeschooling, the era of unrelenting public school funding growth may be coming to an end. Public school funding is at record levels, and state and local policymakers should shift the focus to maximizing the impact of existing K-12 dollars in ways that can improve student outcomes.

Public school funding is increasingly spent on employee benefits, including teacher pensions.

Inflation-adjusted K-12 education spending on employee benefits—which includes teacher pensions, health insurance, and other expenses—increased by 81.1% between 2002 and 2023, rising from $2,221 per student to $4,022 per student, Reason Foundation’s analysis shows.

In comparison, real spending on employee salaries grew modestly, rising from $8,449 per student to $9,098 per student, a 7.7% increase. As a result, for every new $1 that public schools spent on employee salaries between 2002 and 2023, benefit expenditures rose by $3.27. In 12 states, growth of employee benefits exceeded 100%, including Hawaii (194.1%), Vermont (171.3%), Illinois (169.9%), New Jersey (167.1%), and Pennsylvania (166.4%), as shown in Table 2.

In 2023, employee benefit costs in New Jersey were $8,333 per student. In New York, the cost was $7,949 per student. Vermont and Connecticut also spent more than $7,000 on employee benefits per student they serve.

Employee benefit costs also exceeded $5,000 per student in Pennsylvania, Illinois, Michigan, Massachusetts, Delaware, New Hampshire, Rhode Island, Wyoming, and Alaska.

Policy implications of rising benefits costs on K-12 spending

Research shows that teacher pension debt is the primary driver of rising benefit spending. For years, states have failed to set aside enough money to cover the pension benefits promised to teachers, resulting in hundreds of billions of dollars in unfunded liabilities (i.e., the difference between the total pension benefits owed to teachers and the dollars available in pension funds). Today, this means that more K-12 education funding must be used to cover pension costs, even while many states have reduced benefits for teachers, rather than in classrooms.

Policymakers should take steps to reverse this trend by paying down pension debt as fast as possible to avoid high-interest costs and modernizing antiquated assumptions and benefit designs. Otherwise, pension costs will continue to eat up a greater share of teachers’ paychecks and school districts’ budgets.

Despite plummeting enrollment, the surge in public school staffing has persisted.

Between 2002 and 2023, the number of public school staff increased by 15.1%, while student enrollment grew by only 4.1%. The bulk of new K-12 hires were non-teachers, which increased by 22.8%, such as counselors, social workers, speech pathologists, and instructional aides.

In comparison, the number of teachers rose by 7.6% during this time. Nationwide, non-teaching staff now account for over half, 52.5%, of all public school employees, up from 49.2% in 2002. Table 3 shows the growth in non-teaching staff, while Table 4 displays enrollment growth.

Since the start of the COVID-19 pandemic, the public school staffing surge has persisted. Despite public school enrollment falling by 1.18 million students between 2020 and 2023, public schools added over 81,000 non-teaching staff to their payrolls during that period.

For example, California has lost 318,532 students since 2020, but has added 3,400 non-teaching staff members, while New York has lost 159,701 students but has added 6,996 non-teaching staff members.

Public school enrollment fell in 39 states from 2020 to 2023.

The 2% increases in public school enrollment in Idaho and North Dakota were the largest gains in the country. The only other states where public school enrollment grew from 2020 to 2023 were South Dakota, Delaware, Louisiana, Utah, Alabama, Montana, Texas, Florida and South Carolina.

With a 6% decrease in public school enrollment, Hawaii has experienced the largest decline in public school students since the pandemic. Enrollment also decreased by more than five percent in New York, Mississippi, Oregon, and California, and by at least four percent in New Mexico, New Hampshire, Illinois, West Virginia, Colorado, Kentucky, Washington, Rhode Island, and Michigan, according to Reason Foundation’s analysis.

Policy implications of decreased public school enrollment and current staff sizes

With the National Center for Education Statistics projecting a 5.3% decline in public school enrollment between 2024 and 2032, current staffing levels are unsustainable. School closures are on the horizon in places like Boston, Houston, Seattle, and Oakland, but it will also be important to reduce staffing to levels that match enrollment.

To minimize the need for layoffs, school districts can leverage staff resignations and retirements, while also giving greater scrutiny to costly across-the-board pay increases. Critically, public schools should also consider the return on investment from decades of adding non-teaching personnel to their payrolls and whether this aligns with their core educational mission.

The average teacher salary has declined significantly since the onset of the COVID-19 pandemic.

Nationwide, the average inflation-adjusted teacher salary fell from $75,152 in 2002 to $70,548 in 2022, the most recent year with complete data available, a 6.1% decline, Reason Foundation finds.

However, most of this drop in teachers’ salaries occurred in the aftermath of the COVID-19 pandemic. Between 2002 and 2020, the average teacher salary remained virtually flat, decreasing by 0.6% to $74,698—but then from 2020 to 2022, it dropped by $4,151, or 5.6%.

From 2020 to 2022, the average teacher’s salary decreased by more than five percent in 38 states. They declined the most in North Carolina (−9.6%), New Mexico (−8.8%), South Carolina (−8.7%), West Virginia (−8.6%), and Mississippi (−8.2%).

Only one state, Minnesota, increased teachers’ salaries after the pandemic.

As a result of the decreases following the pandemic, only 10 states experienced positive gains in average teacher salary between 2002 and 2022, with Washington (18.6%), New York (12%), and Massachusetts (11.7%) leading the list, as shown in Table 5.

In comparison, three states saw teacher salaries decline by more than 20% from 2002 to 2022: North Carolina, Michigan, and Indiana.

Policy implications of teachers’ salaries declining

For over two decades, large and regular increases in public school funding haven’t boosted teacher salaries, and this is unlikely to change without structural reforms.

First, it’s important to understand why teacher salaries stagnated between 2002 and 2020. Public school revenue grew by $3,742 per student (25%) during this period, but funding increasingly went to cover the costs of support services spending, which rose by $1,135 per student (25.4%), and employee benefits, which increased by $1,745 per student (78.6%).

Because teacher pay is tied to years of experience and educational attainment—and teacher salaries vary substantially by state—it’s also possible that demographic shifts in the teacher population contributed to the observed trends. However, available federal data make it difficult to draw firm conclusions. While the share of teachers with over 20 years of experience has declined, educational attainment has increased, with the proportion of teachers holding only a bachelor’s degree falling over time.

What drove the decline in teacher salaries between 2020 and 2022?

Teacher turnover and other factors played a role, but historic inflation levels were likely the most significant factor. In the 2022 school year, the average monthly price level was 9.6% higher than it had been just two years earlier, negating funding increases from state legislatures and eating into teacher paychecks. Large and widespread increases in nominal pay would’ve been required just for teacher salaries to keep pace with inflation, let alone increase, during these years.

For policymakers, the key takeaway is that public school spending decisions, combined with rising pension costs, are eating into teachers’ paychecks. Even if teacher demographics have shifted over time, school officials are increasingly prioritizing spending education funding on non-teaching personnel, while unfunded pension liabilities also consume a larger share of K-12 dollars.

Student outcomes were falling even before the COVID-19 pandemic, despite record funding levels.

The National Assessment of Educational Progress (NAEP) is the gold standard for measuring national and state K-12 outcomes in math, reading, and other subjects. While the National Center for Education Statistics (NCES) publishes average scale scores that are precise, they also publish more intuitive proficiency levels: Basic, Proficient, and Advanced.

Importantly, the proficient benchmark is an aggressive target that doesn’t equate with grade-level proficiency or meeting state standards. According to NCES, “Students performing at or above the NAEP Proficient level on NAEP assessments demonstrate solid academic performance and competency over challenging subject matter.” For this reason, our analysis focuses on the share of students who perform below the basic performance threshold.

Across all four subjects examined—4th and 8th-grade math and reading—the trend is clear: the share of students scoring below NAEP basic fell between 2003 and 2013, increased by 2019, and then grew sharply in the wake of the COVID-19 pandemic in 2022. Except for 4th-grade math, scores regressed again from 2022 to 2024, and outcomes in all four subjects were worse in 2024 than in 2003. These figures are presented in Table 6 below.

For low-income students, a similar trend is observed, as shown in Table 7. Student performance improved from 2003 to 2013, worsened before the pandemic in 2019, and then dropped dramatically in 2022.

By 2024, low-income 8th graders fared worse than they did in 2003, while 4th-grade students still performed slightly better. Notably, performance in three of the four subjects was worse in 2024 than in 2022.

Policy implications of NAEP scores

For policymakers, a pressing concern is the widespread failure of public schools to get students back up to speed in the wake of the COVID-19 pandemic, despite receiving $190 billion in federal Elementary and Secondary School Emergency (ESSER) relief funding during the pandemic.

Research shows that public schools were given more than enough money to reopen safely; yet, many used the windfall to prioritize things other than academics, even as students fell behind. For instance, researchers at Georgetown University’s Edunomics Lab estimate that approximately 20% of the federal pandemic relief dollars were allocated to school facilities, including building repairs and HVAC upgrades. While this was permitted under the law—and some public schools used their federal relief funds wisely—ESSER was a policy failure, especially when viewed through the lens of student achievement.

It’s also notable that, even before the pandemic, student outcomes were trending downward despite record education funding levels across states. For example, 34% of 4th graders and 27% of 8th graders scored below basic on NAEP reading in 2019. While gains were made between 2003 and 2013, a large share of students still scored below the lowest performance threshold in this peak year.

Conclusion

In the years ahead, policymakers will need to address a complex set of K-12 challenges, including declining public school enrollment, bloated staffing for current and projected enrollment levels, mounting pension costs and debt, stagnant teacher salaries, and underwhelming academic outcomes. These problems arose during a period when public schools saw historic funding increases, and money alone won’t solve them.

Instead, lawmakers will need policy solutions that address their root causes and maximize the use of existing K-12 funding. Reason Foundation’s K-12 Education Spending Spotlight aims to help them get started.

Related: K-12 Education Spending Spotlight Archives

The post K-12 Education Spending Spotlight 2025: Annual public school spending nears $1 trillion appeared first on Reason Foundation.

My annual open enrollment study grades and ranks every state’s open enrollment laws based on seven best practices, as shown in Table 1.

Using Reason Foundation’s open enrollment best practices as a measure: 16 states have statewide cross-district open enrollment laws, 17 states have statewide within-district open enrollment laws, 27 states make public schools free to all students, 10 states make public schools open to all students, five states publish transparent state-level open enrollment reports; eight states make open enrollment policies and availability transparent at the district-level, and four states have a robust appeals process for denied transfer applicants. 

As with the 2024 edition, Oklahoma continues to lead the nation with the best open enrollment policy, scoring 99 out of 100 points thanks to a well-rounded law that lets kids transfer to public schools with openings, bans tuition charges for transfer students, and offers data and transparency to parents and policymakers. 

Thanks to an improvement that established a statewide within-district open enrollment law and improved transparency provisions, Arkansas now has the second-best policy in the nation, scoring 98 out of 100 points, surpassing Idaho, last year’s second-place state, which now ranks third.

Based on the Reason Foundation’s examination of open enrollment laws, six states—Oklahoma, Arkansas, Idaho, Arizona, West Virginia, and Utah–received “A” grades this year. 

Generally, these states tend to have excellent open enrollment laws, allowing students to transfer to any public school with available openings. However, their laws could be further improved by increased data sharing at the state- and district-levels or more effective appeal processes. 

Seven states — Florida, Kansas, Colorado, Delaware, Nebraska, South Dakota, and Wisconsin — received “B” grades in the report.

Two states—North Dakota and Montana—received “C” grades.

Two states — Iowa and California — earned “D” grades. California could improve its inter-district transfer laws and move all the way up to an “A” grade.

The remaining 33 states scored an “F.” 

Table 1: Reason Foundation’s open enrollment best practices

Three states that received an “F” grade still improved their overall scores from last year’s report.

Nevada codified a strong within-district open enrollment policy and adopted good state- and district-level transparency provisions, improving its score from 35/100 points to 51/100 points. It now ranks 17th overall, tied with Minnesota and Massachusetts.

Similarly, New Hampshire established a strong within-district open enrollment law, improving its score from 35/100 to 45/100 points. It now ties for 21st place with Connecticut, New Mexico, and Pennsylvania.

South Carolina has made its open enrollment policy more transparent at the district level, scoring 37 out of 100 points — an improvement of one point.

Lastly, Missouri’s open enrollment score dropped from 35/100 points to 5/100 points, ranking second-to-last, alongside Alabama and Virginia. This occurred because the state’s highly restrictive cross-district transfer options — the Metropolitan Schools Achieving Value in Transfer Corporation and Voluntary Interdistrict Choice Corporation — are either defunct or no longer accepting transfer applicants. As a result, Missouri has no cross-district transfer options.

Alaska, Maine, Maryland, and North Carolina continue to rank dead last, scoring zero out of 100 points. 

A detailed summary of the study, including its rankings and grades for every state, as well as its methodology, is available here. 

The full report, Public Schools Without Boundaries, is available here (PDF). 

Previous editions of the study can be found here.

If you have any thoughts or questions about the report, your state’s policies, or open enrollment, I’d love to hear them.

The post Funding Education Opportunity: Grading and ranking every state’s open enrollment laws appeared first on Reason Foundation.

Scholarship-granting organizations have yet to determine the amounts they’ll offer, but recipients will be able to use them to pay for approved education expenses, such as private school tuition, tutoring, and school uniforms. Moreover, many of the program’s details are still in flux because federal lawmakers have left a significant amount of discretion to the U.S. Secretary of the Treasury to establish rules governing the program. 

The letter of law appears to make students in traditional public schools or charter schools eligible. They could use “the funds to pay for items such as tutoring costs, test preparation courses, exam fees, internet services, and special-needs education,” the American Enterprise Institute’s Ian Rowe and Democrats for Education Reform’s Jorge Elorza argued.

Until the program’s rules-making process is finalized, many governors are likely to be hesitant about committing to participation. According to Education Week, many states will “await federal rules and guidance clarifying the provision” before making a decision on whether to participate. 

To date, only Tennessee Gov. Bill Lee (R) and North Carolina Gov. Josh Stein (D) have clearly announced plans to opt into the program, while Oregon’s Gov. Tina Kotek (D), New Mexico’s Gov. Michelle Lujan Grisham (D), and Wisconsin’s Gov. Tony Evers (D) have said they’ll opt out of it. 

While there is no guarantee that they will participate, based on governors’ public statements and analyses of them by EdChoice and ExcelinEd, it appears that 26 governors support school choice policies, and 14 governors have outright opposed them. Table 1 summarizes the stances of governors on school choice policies nationwide. 

Table 1: Governors’ School Choice Stances, Various Sources

The decision by North Carolina Gov. Josh Stein (D) to opt into the federal tax-credit scholarship program could be a harbinger of what’s to come in state governments that are divided over school choice. When Gov. Stein announced his intention to opt North Carolina into the federal tax-credit program, he also vetoed a state-level proposal that would have established a private school choice program, calling it unnecessary in light of the federal program.

This is because the new federal tax-credit scholarship has created a dilemma for staunch opponents of school choice programs. As the Fordham Institute’s Mike Petrilli explained: 

“Will Democratic leaders opt their states into the new federal school choice program, allowing families to accept scholarships that are funded by charitable donations from taxpayers nationwide—scholarships that don’t cost their state a penny, and therefore can’t be said to be taking any money from their public schools?

Or will they bow to the demands of the teachers’ unions and bar the schoolhouse door instead, creating a grand opportunity for GOP candidates running against them?”

National polling by EdChoice and Morning Consult found that 84% of parents supported school choice policies. Moreover, school choice policies are supported by 78% of Black parents and 83% of Latino parents.

Even if governors choose to opt out of the program, it’s not clear that the buck would stop with them in every case. The federal law states that decisions to participate must be made by a state governor or “by such other individual, agency, or entity as is designated under State law to make such elections on behalf of the State with respect to Federal tax benefits.”

Conflicts are likely to arise when state leaders disagree about who has the authority to opt in or out of the program, especially in states like Arizona, where the governor opposes school choice policies, but state legislators and agencies support them. This could lead to significant jousting between state officials in the years leading up to the program’s launch in 2027. 

However, much of this will be determined by the Department of the Treasury’s rulemaking. Governors typically opposed to school choice could be willing to opt into the program if the agency’s rules let them impose significant regulations on participating private schools or target the funds to students enrolled in public schools.

What to watch

Rep. Virginia Foxx (R-NC) introduced House Resolution (H.R.) 5181, which would reauthorize the D.C. Opportunity Scholarship Program, the federal city’s private school choice program, for another seven years. Since its launch in 2004, more than 12,000 low-income students in the District of Columbia have benefited from the program, receiving scholarships to pay for private school tuition. During the 2025-26 school year, elementary and high school students can receive scholarships valued at up to $10,000 and $15,000, respectively.

The Kentucky State Supreme Court is set to hear arguments this month about whether the state can fund charter schools. Since 2017, charter schools have been legal in Kentucky, but have lacked a funding mechanism. House Bill 9 was passed in 2022, which would let state and local education dollars follow students enrolling in charter schools. However, a Franklin County Circuit Judge ruled the law unconstitutional, stating that it would “establish a separate class of publicly funded but privately controlled schools” and create a “separate and unequal” system.

Laramie County District Judge Peter Froelicher denied the state’s motion to dismiss the lawsuit against Wyoming’s new private school scholarship program. Eligible recipients could use their $7,000 scholarship to cover a range of approved educational expenses, including private school tuition and tutoring.   

Recommended reading 

Risk Sharing: The Student Loan Reform Whose Time Has Come?
Preston Cooper at the American Enterprise Institute

“Requiring institutions to shoulder a portion of student loan risk would realign their incentives. Rather than maximizing student loan volume in any way possible, institutions would seek to disburse student loans only when they have a reasonable expectation that the loan will be repaid. While this would save taxpayers money, the primary beneficiaries would be students, who would face less pressure from institutions to take on debts they cannot afford. Going forward, lawmakers should keep in mind risk sharing as a tool for higher education accountability.”

COVID Worsened Long Decline in 12th-Graders’ Reading, Math Skills
Greg Toppo at The74

“The results, released Tuesday by the U.S. Education Department, are ‘sobering,’ said Matthew Soldner, acting commissioner of the National Center for Education Statistics. He noted ‘significant declines in achievement’ among the lowest-performing students going back even before the pandemic. In one particularly grim indicator, a larger percentage of the Class of 2024 scored in the tests’ ‘below basic’ level in both math and reading than in any previous assessment dating back decades.”

Here Comes “The Big Shrink”
Marguerite Roza, Ph.D., at School Business Now

“Nationally, we can expect a 0.5% decline in enrollment per year. Some districts will be hit much harder. Over the next decade, Los Angeles Unified will lose about a third of its enrollment. None of this should be a surprise. When enrollment is down in the youngest grades, it means there are fewer students in the pipeline. Shrinking is hard. But it doesn’t have to erode systems and hurt students. With a strong plan, leaders can approach shrinking as a path toward a smaller, stronger, more nimble school system that better serves its remaining students.”

The post Funding Education Opportunity: How states are reacting to the new federal tax-credit scholarship appeared first on Reason Foundation.

Since then, public schools have struggled to get a significant number of students to attend class regularly. Before the pandemic, only about 15% of students nationwide were categorized as chronically absent, meaning they missed 18 days of school, or approximately 10% or more of the school year.

When public schools reopened from their pandemic closures, chronic absenteeism skyrocketed to unprecedented levels, with 31% of students being labeled chronically absent during the 2020-21 school year. While many schools have reduced chronic absenteeism since then, it remains well above pre-pandemic levels.

The latest data from 40 states showed that, on average, 24% of students were chronically absent during the 2023-24 school year. That means that 8.6 million students missed approximately 155 million days of school cumulatively. Figure 1 illustrates the number of students categorized as chronically absent in 40 states collected from state education agencies so far, and the American Enterprise Institute’s (AEI) Return 2 Learn Tracker.

Figure 1: Chronic absenteeism rates during the 2023-24 school year

Alaska has the worst rates of chronic absenteeism, with 43% of its students chronically absent during the 2023-24 school year. Florida, Michigan, New Mexico, and Oregon were the other states with chronic absenteeism at or above 30% of their students in the 2023-24 school year. 

Notably, absentee data from Texas during the 2023-24 school year, which accounts for 11% of students nationwide, is not yet available. The state’s previous data, however, showed high rates of chronic absenteeism, significantly exceeding pre-pandemic rates. California, which has the most public school students in the country, got its absenteeism down to 21% in the 2023-24 school year. 

So far, no state has returned to pre-pandemic levels of chronic absenteeism. The states to come closest to returning to pre-pandemic rates of chronic absenteeism are Alabama and Virginia. During the 2023-24 school year, 15% of students were categorized as such, just four percentage points more than during the 2018-19 school year in both states.

However, students from the so-called Covid Cohort have suffered fewer consequences for missing 10% or more of the school year than past generations, according to a 2025 analysis of 22 states by AEI researchers, Nat Malkus and Sam Hollon. 

“Our most conservative estimates indicate that if attendance mattered as much as it once did, 100,000 fewer students would have graduated in 2022 alone. That’s more than the total number of 12th graders in New Jersey,” they wrote in The Washington Post.

Malkus and Hollon attribute this shift to a failure on the part of school administrators to roll back temporary policies implemented at the height of the pandemic to accommodate students, such as minimizing consequences for late or missed homework, allowing students to retake tests, or expanding access to online credit-recovery programs.

School administrators who want to improve student attendance desperately need to reverse course if policies like these are still in place. 50CAN’s Liz Cohen argued that if incentives fail to motivate students to attend school, then school officials should impose serious consequences, such as holding students back a year or requiring summer school if they fail to meet the minimum attendance requirements. 

“Think this unfair? It’s hard to conceive of something more unfair to children than passing them from grade to grade without ensuring they accumulate sufficient knowledge and experience,” Cohen explained in The 74.

This autumn will mark the fifth full academic year since schools reopened from their pandemic-induced closures. It’s time that school administrators get students to attend school regularly. 

From the states

In other significant developments, New Hampshire policymakers codified a robust within-district open enrollment law while North Carolina’s tax-credit scholarship proposal was vetoed.

In New Hampshire, Gov. Kelly Ayotte signed Senate Bill 97-FN into law, codifying a statewide within-district open enrollment program. Students can now transfer to any public school within their residentially assigned school district with available seats. New Hampshire is the 17th state to establish a robust within-district open enrollment policy based on Reason’s open enrollment best practices.

North Carolina Gov. Josh Stein vetoed House Bill 87, which would have made North Carolina the first state to opt into the new federal tax-credit scholarship program. “School choice is good for students and parents, and I have long supported magnet and accountable charter schools because public schools open doors of opportunity for kids in every county of the state,” Stein said. “Once the federal government issues sound guidance, I intend to opt North Carolina in so we can invest in the public school students most in need of after-school programs, tutoring, and other resources.” However, Senate President Pro Tempore Phil Berger and Speaker Destin Hall hope to override the veto. The legislature has overridden the governor’s veto eight times this year already.

The latest from Reason Foundation

—New Hampshire could become the 17th state to adopt a strong within-district open enrollment law

—Improving Kentucky’s open enrollment program would help students and families

Recommended reading 

Plenty of schools have no-zeroes policies. And most teachers hate it, survey finds
Kalyn Belsha at Chalkbeat

“The most common practice — and the one that drew the most heated opposition in the fall 2024 survey — is not giving students zeroes for missing assignments or failed tests. Just over a quarter of teachers said their school or district has a no-zeroes policy. Around 3 in 10 teachers said their school or district allowed students to retake tests without penalty, and a similar share said they did not deduct points when students turned in work late. About 1 in 10 teachers said they were not permitted to factor class participation or homework into students’ final grades.”

It’s time for the left to come to the school choice table
Jorge Elorza at the Center on Reinventing Public Education

“If we want different results, then we need a different approach. A system of school choice where ‘the money follows the child’ is one of the most powerful student-centered levers available, and it can help reinvent American education. Progressives who continue to ignore this powerful tool are failing to embrace a 21st-century vision of public education, and they are denying students the academic and civic benefits that follow.”

A brighter future for K–12 education
Matthew Ladner at The Heritage Foundation

“Private organizations have supplanted state efforts to rate schools. The guardians of the education status quo cannot easily subvert private organizations, and the public has a greater degree of trust in them. In addition, private school rating platforms collect reviews, which research shows families value. Innovators have begun to expand these platforms beyond schools into a variety of education-service providers and to collect user reviews.”

Aug. 28, 2025, editor’s note: This newsletter has been updated to remove New York from states that haven’t reported 2023-24 absenteeism data.

The post Funding Education Opportunity: Chronic absenteeism rates remain too high years after pandemic appeared first on Reason Foundation.

However, this loss of public school students and funding for them shouldn’t come as a shock to state policymakers and school districts. Before the pandemic, 17 states, such as Illinois and Michigan, were already experiencing declining enrollment. 

One major contributing factor to declining K-12 enrollments is the birth dearth: fewer babies means fewer students. According to the Centers for Disease Control and Prevention, the number of births in the U.S. decreased by 16% between 2007 and 2024, resulting in nearly 700,000 fewer children being born in the US in 2024 than in 2007. 

Fewer kids being born, combined with increased competition from private and charter schools, put lower enrollment rates on the horizon for many states. The pandemic exposed parents to many more educational options and made the enrollment decline happen faster and worse than expected in some cases. 

These lower student counts have significant implications for school district finances because education funding is generally based on the number of students enrolled. When school budgets shrink due to significantly fewer students, districts have to rightsize through a combination of staff reductions, school closures, or other cost-cutting measures. 

But many school districts delayed closures, relying on federal COVID-19 relief funds to keep their under-enrolled schools afloat. 

Reason Foundation research examined school closures in the 15 states that provided data, including California, New York, and Florida. Table 1 below shows the relationship between school closures and enrollment fluctuations before and after the pandemic’s onset in these 15 states.

Table 1: Public school closures before and after 2020

For example, as California’s enrollment declined by 0.9%, more than 55,000 students, between 2018 and 2020, the state’s school districts closed 63 schools. Yet only 65 schools closed in California between 2020 and 2024, when the state’s public school student counts plummeted by 5.2%, or nearly 325,000 students.

By contrast, Colorado’s public school districts faced the reality of declining enrollments sooner. Only 12 schools closed in Colorado between 2018 and 2020 as the state’s student population increased by about 0.3%. Yet this growth was reversed after the pandemic. Colorado closed 51 schools, as its public student counts dropped by 5.2%, or almost 48,000 fewer students, between 2020 and 2024. 

Unfortunately, Colorado’s initiative wasn’t the norm. Data from these 15 states showed that most delayed school closures, likely because they had federal funds temporarily bolstering their budgets. If this enrollment and closure trend holds in the other 35 states, it means that widespread school closures will likely need to occur in the coming years, as districts are forced to close or consolidate schools to reflect lower student counts and reduced funding.

To make closures fair and cost-effective, state lawmakers should have a process to identify empty schools. For example, when the student counts in Indiana school districts decline by 10% over a five-year period, they must review school building occupancy and identify schools that could be closed.  

Right-sizing schools and increasing transparency aren’t the only reforms available to policymakers. They can eliminate unfair funding protections, such as hold harmless provisions that provide funding based on outdated student enrollment figures and give districts funding for students who no longer attend those schools, spreading resources thin.

Notably, 15 out of the 16 states with declining enrollment provisions that give districts money based on outdated student counts experienced overall enrollment declines since 2020. These states are ripe for education funding reform. A better policy is to base education funding on current student counts so school districts have incentives to rightsize when their local enrollments drop. 

In the post-pandemic K-12 education landscape, there are fewer students enrolling in traditional public schools than in previous decades. Combined with the birth dearth, it’s unlikely that public school enrollments will rebound in the near future. This makes it imperative that policymakers and school leaders implement reforms that fund students and streamline school closures.

From the states

In other significant developments, policymakers in New Hampshire took a step forward on K-12 open enrollment while Vermont took a step backward, and a federal school choice bill became law.

In New Hampshire, lawmakers passed Senate Bill 97-FN, codifying a statewide within-district open enrollment program. Students can now transfer to any public school inside their residentially-assigned school district with open seats. The bill currently awaits Gov. Kelly Ayotte’s signature.

Vermont Gov. Phil Scott signed House Bill 454, which limits how families can use public dollars to pay for private school tuition. Previously, students who lived in school districts that didn’t serve their grade level could use public education funds to pay for tuition at the private school of their choice. Under the new law, however, eligible students cannot use their education funds to pay for private schools located outside of Vermont or for private schools located inside a school district that offers schooling at all grade levels, likely excluding private schools in areas with denser populations. Moreover, only private schools where 25% or more of students are publicly funded are eligible to receive public funds. This new law is a major blow to Vermont’s private school scholarship program, the oldest in the nation. 

At the federal level, President Donald Trump signed the Educational Choice for Children Act into law, codifying the first federal tax-credit scholarship program. Eligible students must come from households whose incomes don’t exceed 300% of the median gross income of their locality, according to the K-12 Dive. Scholarships are only available to students who live in states that opt into the federal program. Students can use their scholarships to cover approved educational expenses, including tuition, tutoring, transportation, and homeschooling costs.

What to watch

In Ohio, a Franklin County Judge ruled that the state’s EdChoice Scholarship, a voucher program benefiting 140,000 students, is unconstitutional. However, the judge did not order the program to stop until after appeals, acknowledging that shutting down the program would cause “significant change to school funding in Ohio,” according to The74. Ohio Attorney General Dave Yost has appealed the ruling.

In Wyoming, a Laramie County district judge paused the implementation of the state’s private school scholarship program, which was codified during the 2024 and 2025 legislative sessions. The ruling said the program likely violates the state constitution, which “bars the legislature from appropriating money for educational or benevolent purposes to any person or entity ‘not under the absolute control of the state,’” according to the Cowboy State Daily.

Recommended reading 

Democrats’ School Choice Dilemma
Michael J. Petrilli in The Wall Street Journal

“It’s a tough dilemma. Will Democratic leaders opt their states into the new federal school choice program, allowing families to accept scholarships that are funded by charitable donations from taxpayers nationwide—scholarships that don’t cost their state a penny, and therefore can’t be said to be taking any money from their public schools?Or will they bow to the demands of the teachers unions and bar the schoolhouse door instead, creating a grand opportunity for GOP candidates running against them?”

New Federal Tax Credit Boosts School Choice—But Blue States Face Big Decision
Matt Barnum in The Wall Street Journal

“The law, enacted earlier this month, will soon allow taxpayers to redirect a portion of their tax bill to nonprofit scholarship-granting organizations or SGOs. The taxpayer could write a check of up to $1,700 to an SGO but get that full amount back via a reduction of the same amount in their income taxes, instead of a regular tax deduction for the donation. It is a donation that doesn’t ultimately cost the donor anything.”

Parents Win Key Supreme Court Test in Mahmoud v. Taylor
Joshua Dunn at Education Next

“Recognizing what a disaster the case was for the school district and the public education establishment, American Federation of Teachers president Randi Weingarten lamented on X that the case “should have been worked out on a local level, it’s a shame it went all the way to SCOTUS. Parents must have a say about their own kids, they are our partners in education.” Except a belligerent school board that was too stubborn or mathematically challenged to count votes on the Supreme Court made that impossible.”

The post Funding Education Opportunity: School districts slow to close schools despite losing students appeared first on Reason Foundation.

Research by Stanford University’s Thomas Dee shows declining birth rates, domestic migration, and more families choosing private schools and homeschooling during and after the COVID-19 pandemic school closures are all factors in declining public school enrollment. 

However, enrollment trends vary across states. Some major school districts and states saw student numbers drop even before the pandemic. To put the public school enrollment figures into perspective, it is useful to examine state-level and longitudinal data reported by the National Center for Education Statistics (NCES). 

Here are five key takeaways from the data and interactive tools to explore other key trends. 

1. Public school enrollment has fallen by 1.28 million students since the start of COVID-19. 

In the U.S., the COVID-19 pandemic is viewed as starting in February or March 2020. Between the 2020 and 2024 fiscal years (FY), public school enrollment fell by 1.28 million students or 2.5%. 

States such as New York, California, Mississippi, and West Virginia all lost more than 5% of their students during that period.

Only nine states saw growth in public school enrollment during that time. In fact, North Dakota is the only state with public school enrollment gains over 2% from the pre-pandemic year. 

In comparison, in the four years leading up to the COVID-19 pandemic, public school enrollment increased in 31 states, with sharp increases in North Dakota (6.9% enrollment growth), Idaho (6.4%), Nevada (6.3%), Utah (5.7%), and Washington (5.1%). Chart 1 shows public school enrollment trends between the 2012 and 2024 fiscal years, according to NCES data.

Chart 1: Public school enrollment trends (FY 2012 to FY 2024)

2. The short-term public school enrollment recovery after the pandemic in 2022 and 2023 appears to be over. 

In the 2022 and 2023 fiscal years, the nation’s public schools recouped some of their pandemic enrollment losses with slight increases each year over FY 2021 levels, when enrollment was at its post-pandemic low point.

However, the latest National Center for Education Statistics data signals that any hope of further year-over-year enrollment gains might be over. In the 2024 fiscal year, nationwide, public schools lost over 102,000 students compared to the number of students in 2023, with 39 states experiencing a decrease in enrollment, according to NCES data. 

The states with the largest public school enrollment declines from 2023 to 2024 included West Virginia (-1.7% enrollment decline), Arkansas (-1.7%), and Wyoming (-1.5%).

Among the 11 states that increased public school enrollment in FY 2024, the states with the largest gains included New Jersey (0.6% enrollment growth), South Carolina (0.6%), and North Dakota (0.4%). 

3. Public school enrollment was inching upward before COVID-19.  

Before the COVID-19 pandemic, public school enrollment increased by 1.3 million students, or 2.6%, from 2012 to 2020. During this time, the majority of states experienced an increase in public school enrollment, with North Dakota (19%), Utah (14.3%), and Nevada (13%) seeing the most significant increases. 

U.S. public school enrollment started to flatten somewhat in the years immediately preceding the COVID-19 pandemic, but 32 states still had an increase in public school students between 2019 and 2020. 

4. COVID-19 aggravated existing enrollment loss trends in some states while reversing growth trends in others. 

For some states, the pandemic aggravated existing declines in public school enrollment. From the 2012 to 2020 fiscal years, states like New Hampshire (-7.6% drop in enrollment), West Virginia (-6.9%), and Illinois (-6.7%) lost considerable percentages of their public school student populations.

Other states saw the pandemic stop and reverse their enrollment trends. For example, Oregon saw a 7.5% increase in public school enrollment between FY 2012 and FY 2020 but a 6.2% enrollment loss between FY 2020 and FY 2024. 

Washington experienced a similar trend, with 9.2% enrollment growth from 2012 to 2020 and a 4.2% enrollment loss during and after the pandemic. Other states like New York (-0.4%), California (-0.6%), and Massachusetts (0.6%) had relatively flat enrollment changes pre-pandemic that turned sharply downward after FY 2020. Chart 2 compares pre-pandemic and post-pandemic trends in public school enrollment, based on NCES data

Chart 2: Changes in each state’s public school enrollment from 2012 to 2024

5. Public school enrollment declines are expected to continue for years. 

The National Center for Education Statistics projects that public school enrollment will decline to 46.9 million students by the 2032 fiscal year, representing a 5.3% decrease from 2024.  

States such as Hawaii, California, Mississippi, New Mexico, and New York are forecasted to lose over 12% of their public school students during this time, with only 13 states projected to increase the number of students.  

Conclusion 

Nationwide, public school enrollment has decreased by over one million students since the start of the COVID-19 pandemic. This significant drop reversed the modest growth observed in the years leading up to the pandemic. Local context is essential. Not all states experienced declines after the pandemic, while some states faced enrollment decreases that had started well before the pandemic. 

As public schools become increasingly underutilized and school districts face mounting cost pressures, state and local policymakers must adjust to current enrollment and the forecasts of fewer students in the decade ahead. Public school enrollment trends will impact state and local budgets, bond elections, and teacher pension liabilities that policymakers must grapple with.

The post Examining the latest K-12 public school enrollment data and trends appeared first on Reason Foundation.

Table 1 shows open enrollment participation in each of these states. 

Table 1: Open enrollment participation in 19 states

Public school transfer laws and policies vary widely by state. These 19 states were examined because they could provide data on open enrollment transfers. Colorado and Delaware have the highest participation rates in their programs, with about one in four students using open enrollment. 

The report also details open enrollment participation in other publicly funded K-12 education options. Between students using open enrollment, charter schools, and private school scholarships, about 16% of students choose publicly funded education options other than their residentially assigned schools in the 19 states examined. 

Figure 1 shows how many students use publicly funded private and public school choice programs in comparison to those who remain in their assigned public schools in these states.

Figure 1: Publicly funded K-12 education options

Of these 19 states, Arizona stands out the most. Over a third, 35% of Arizona’s publicly funded students chose education alternatives through open enrollment, charter schools, and private school scholarships during the 2022-23 school year. Open enrollment accounted for 10% of these students in the Grand Canyon State. 

After Arizona, students in Colorado, Delaware, and Wisconsin chose publicly funded alternatives to their residentially assigned public schools at the highest rates.

As more states expand and adopt universal private school scholarships and strong open enrollment laws, even more students will participate in these programs. In 2025, Texas, Arkansas, and Indiana established or significantly strengthened their school choice laws. 

Reason Foundation obtained data from seven states showing that open enrollment participation generally increases over time, as families become more familiar with their choices. Figure 2 shows open enrollment participation trends in select states.

Figure 2: Open enrollment growth over time in seven states

Wisconsin, which publishes the most extensive open enrollment data, shows that open enrollment participation has increased by about 14% each year, growing from 2,500 participants during the 1998-99 school year to nearly 61,000 participants during the 2023-24 school year. 

Accordingly, states that recently launched their open enrollment programs, such as West Virginia, Kansas, Oklahoma, and Arkansas, will likely see increased participation rates in future years. 

More states should maximize students’ transfer opportunities by codifying strong open enrollment policies. These laws can make a big difference in students’ transfer opportunities. On average, about 10% of students transferred via open enrollment in states with strong open enrollment laws, while only about 6% of students used it in states with weaker laws that allow public school districts to reject transfer students. This underscores the importance of adopting stronger open enrollment policies in the 34 states with weak ones. 

In the 2026 legislative sessions, state policymakers should support strong open enrollment policies so more public school students can attend schools that are the right fit, regardless of where they live.

From the States

In other important education and school choice developments, policymakers in New Hampshire, Louisiana and Nevada consider school choice proposals.

In Louisiana, the Senate Finance Committee cut $50 million from the LA GATOR private school scholarship program. The proposal provides $44 million to fund 6,000 scholarships for existing participants, but it eliminates the expansion backed by Gov. Jeff Landry and the House, which aimed to add 5,300 new scholarships to the program. 

Gov. Joe Lombardo signed Nevada Senate Bill 460 into law. This bill would establish a statewide within-district open enrollment program to let students attend public schools inside their district other than their assigned one with open seats. Nevada’s open enrollment program would improve its score by 15 points, improving its overall score to 50 out of 100 points in Reason Foundation’s next annual evaluation of every state’s open enrollment best practices.

New Hampshire Gov. Kelly Ayotte signed Senate Bill 295, which expands student eligibility for the state’s Education Freedom Accounts–private school scholarships—by removing the income cap. Program participation will be capped at 10,000 students during the 2025-26 school year, but after that, the cap will automatically increase “by 25% in any year when applications exceed 90% of the limit,” ExcelinEd in Action reported. According to EdChoice, 5,600 students received an account during the 2024-25 school year, which can be used to pay for private school tuition, textbooks, and other approved education expenses. 

What to Watch

The U.S. Supreme Court was deadlocked 4-4 on St. Isidore of Seville Catholic Virtual School v. Drummond. As a result, the Oklahoma State Supreme Court’s ruling that a publicly-funded religious charter school violates the separation of church and state remains in place.  

New data from Step Up for Students, the organization that administers education choice scholarships, showed nearly 1.8 million students, 51% of the state’s K-12 students, used some sort of school choice option during the 2023-24 school year. 

The Latest from Reason Foundation

–Strengthening open enrollment laws is key to unlocking public school choice for kids

–Which K-12 finance systems foster school choice?

–How LAUSD can start grappling with budget deficit, declining enrollment 

–Don’t trust the federal government with the nation’s largest school choice program

Recommended reading 

The pandemic is over. It’s time for schools to get the message.
American Enterprise Institute’s Nat Malkus and Sam Hollon at The Washington Post

“All signs indicate that many more of today’s students are falling behind academically but are still being allowed to graduate. What this means in practice is that more students will leave school underprepared for the world of college or work. School leaders need to act now to reset basic expectations — including consistent school attendance — for graduates, or pandemic exceptionalism will become the new normal.”

ESA rules review: Improving rulemaking for ESA programs
Jenny Clark, Michael Clark, and George Khalaf at State Policy Network

“While procedural and administrative rules are necessary for efficient program management, substantive decisions—such as determining eligible expenses and qualifying education providers—must remain in the hands of elected lawmakers. Otherwise, agencies risk overstepping their bounds, either by imposing burdensome restrictions or by slowly reshaping the program away from its intended purpose. ”

Schools closing in Arizona? Blame the failing schools, not school choice
Heritage Foundation’s Jason Bedrick and Matthew Ladner at The Daily Signal

“Critics claim that school choice “diverts funding.” But public education dollars are meant for students, not systems. In Arizona, when families leave a district school for a charter or private school, or to another district, the funding follows the child to the learning environment that works best for him or her—and away from one that didn’t. That’s not a bug, that’s a feature. That’s the system working to be responsive to the needs of students and their families.”

The post Funding Education Opportunity: Study finds more than 1.6 million students using K-12 open enrollment in 19 states appeared first on Reason Foundation.

Guaranteeing open enrollment for students assigned to persistently dangerous schools

Federal guidance encouraged states to let students assigned to traditional public schools that have been designated as persistently dangerous transfer to safer schools. Under section 8532 of the 1965 Elementary and Secondary Education Act (ESEA), states must let students assigned to unsafe schools, or who are victims of a violent crime, transfer to other public schools. 

However, persistently dangerous public schools have long been underidentified because states set their own definitions of unsafe schools, which are often overly narrow. For example, an Ohio “high school of 1,000 students could have four homicides and 19 weapons possessions without being deemed persistently dangerous,” Reason magazine’s Emma Camp reported. 

Narrow definitions of unsafe, like Ohio’s, mean that many states have avoided designating public schools as unsafe even when common sense says otherwise. Unfortunately, this isn’t a recent practice. 

In 2003, California had the most K-12 students nationwide, yet the state reported no unsafe schools. Students and their families balked at this patent falsehood. “I don’t think there is safety here [Jefferson High School near downtown Los Angeles]. There are always fights,” junior Lorena Guerrero told the Los Angeles Times that year. 

Similarly, a 2019 analysis published by The74 showed that only six states–Oregon, North Dakota, Texas, Georgia, New York, Pennsylvania, New Jersey, and Maryland– identified any of their schools as unsafe. It noted that California has never identified any of its schools as unsafe.

Most recently, just five states identified 25 persistently dangerous schools during the 2023-24 school year. These low figures, however, don’t reflect reality as “public school districts reported through the Civil Rights Data Collection nearly 1.2 million violent offenses that school year,” District Administration reported. 

The Department of Education recommended that states review their definitions of persistently dangerous schools to ensure that students are afforded transfer options to safer ones, consulting state data, input from families, and the local community. 

State policymakers can expand the definition of persistently dangerous schools as they wish. They don’t have to limit themselves to homicides, gun infractions, or bullying. They could expand the definition to include failing schools and other situations that significantly hamper students’ learning environments.

Once a good definition is established, policymakers should also ensure that students assigned to persistently dangerous schools have real transfer opportunities. For instance, receiving districts could be required to accommodate these transfers regardless of their available space. 

Maximizing Title I flexibility

Earlier guidance released by the Education Department highlighted flexibility afforded to states under Title I, Part A of ESEA. During the 2021-22 school year, Title I provided $17.9 billion to states, earmarked for school districts with low-income students. However, states can reserve up to three percent of these funds to pay for Direct Student Services (Section 1003A), which can “allow parents to exercise meaningful choice in their child’s education.” 

Two permitted uses under Section 1003A could allow students to use open enrollment, which lets them attend public schools other than their residentially assigned ones, giving them access to academic courses not available in their assigned school, such as Advanced Placement (AP). This would ensure that supplemental dollars follow eligible students across district boundaries. Currently, federal dollars don’t follow transfer; reforming this, however, could create key fiscal incentives for districts to accommodate transfers. 

Similarly, students assigned to schools needing comprehensive support and improvement (CSI) could use these funds to pay for transportation costs to attend public schools not identified as CSI. Currently, 16 states have robust open enrollment laws, but most do not guarantee these students free transportation options. Only Florida and Wisconsin provide small transportation stipends to students using open enrollment. 

According to the federal guidance, Ohio is the only state to use Direct Student Services under Title I. While state education agencies can’t force school districts to use funds to pay for specific services, they could award the funds under 1103.A to districts whose priorities and goals align with the state agencies.

What this means for states 

The Trump administration cannot force states to adopt these recommendations because K-12 education, rightly, remains a state-level issue. Consequently, it’s up to state policymakers to implement the department’s guidance. One challenge in doing so, especially regarding funding, is state-level red tape. Most states layer additional regulations on top of federal ones to minimize non-compliance. Consequently, state regulations related to federal education funds are often stricter than those imposed by Congress. 

This practice unnecessarily restricts how federal funds are used at the state level. To ensure that federal funds provide students with the flexibility intended by Congress, state policymakers should identify and eliminate cumbersome regulations that stifle legal uses of federal funds. States shouldn’t let red tape stand in the way of students’ learning opportunities.

From the states

In other important education and school choice developments, as mentioned briefly above, policymakers recently codified significant public and private school choice laws in several states.

In Texas, Gov. Greg Abbott signed Senate Bill 2 into law, establishing the state’s first private school choice law. The program provides $10,000 scholarships to 100,000 students to pay for private school tuition and other approved education expenses. Participants with disabilities would receive an additional $1,500. Home-schooled students are also eligible to receive scholarships of $2,000. 

Arkansas Gov. Sarah Huckabee Sanders signed Senate Bill 624 and House Bill 1945. Under the new laws, students can transfer to any public school across the state. It would also require the state Department of Education to collect and publish key open enrollment data. Moreover, school districts must post their open enrollment policies and procedures on their websites and inform rejected transfer applicants why they were denied in writing. Together, these laws will launch Arkansas’ open enrollment policies from 10th place to second best nationwide in Reason Foundation’s annual rankings. 

Senate Bill 2241 was signed into law by North Dakota Gov. Kelly Armstrong, letting charter schools operate in the state. North Dakota is the 44th state to permit charter schools. 

South Carolina Gov. Henry McMaster signed Senate Bill 62, restoring the state’s private school scholarship. Last September, the State Supreme Court struck down the program as unconstitutional because it conflicted with its Blaine Amendment, which prohibits South Carolina from funding religious schools, leaving thousands of scholarship recipients in limbo. The new law, however, transfers state funds to a trustee who then funds the accounts, avoiding the court’s concerns. Moreover, scholarships are valued at $7,500 per student, a 25% increase. During its second year of operation, eligibility will expand to 85% of students. 10,000 scholarships will be awarded during the 2025-26 school year, increasing to 15,000 scholarships the following year. The number of scholarships can increase with demand after that.

Indiana Gov. Mike Braun signed a budget that eliminates income eligibility for the state’s voucher program. This means that every K-12 student is eligible for a $6,000 scholarship to pay for private school tuition. More than 70,000 students participated in the program during the 2023-24 school year. He also signed Senate Bill 1 into law, giving charter schools access to local property tax revenues as of 2028. The funding increases will be phased in over five years. Mind Trust estimated that charter schools would receive “an additional $3,750 per charter school student,” according to Chalkbeat Indiana.

The New Hampshire House approved an expansion of the state’s Education Freedom Accounts so that up to 10,000 students could receive scholarships. Students can use these accounts to pay for approved education expenses, such as private school tuition and tutoring. During the 2024-25 school year, 5,600 students were awarded scholarships.

What to Watch

In Utah, the attorney general’s office petitioned an appeal regarding the Utah Fits All Scholarship, which was ruled unconstitutional by a district court. According to the Salt Lake City ABC affiliate, the petition argues that the constitution doesn’t “limit the legislature’s authority to create educational programs; rather it sets the minimum, which the state has already met through the traditional public school system. Additionally, a 2020 ballot referendum, approved by voters, lets the legislature use income tax to “support children.”

The U.S. House’s Ways and Means Committee approved a budget proposal that would establish a $5 billion federal tax-credit scholarship program. If codified, students whose families’ income is 300% of their area’s median income in all 50 states would be eligible to receive a $5,000 scholarship. These can pay for approved education expenses, such as private school tuition and homeschooling materials.

The Latest from Reason Foundation

–Arkansas’ K-12 open enrollment slam dunk 

–Texas open enrollment bill would significantly increase school choice

–States can expand school choice to millions of public school students

–School choice could help defuse culture war fights

–Frequently asked questions about Montana school finance reform

Recommended reading 

Plenty of Room in District Schools
Ben Scafidi at Education Next

“At least five of these districts—Wichita, Auburn-Washburn USD, Shawnee Mission, Blue Valley, and Olathe—are self-reporting capacity at levels well below their building capacity—because they served many more students a mere five years ago. For example, the Auburn-Washington district experienced a decline of 468 students after fall 2019 yet reported no capacity to serve transfer students five years later. The Andover school district self-reported more open seats (344) than indicated by the change in enrollment method, indicating that the district had open seats back in fall 2019.”

What Would Religious Charter Schools Mean for Education Choice?
Nicole Stelle Garnett and Derrell Bradford at Education Next

“Charter schools ought to fight any suggestion that they are government schools. They are, by design, freed from government control so as to enable innovation. A decision that they are government actors would undermine that goal by placing them in a constitutional straitjacket. And that decision’s ramifications would also threaten the autonomy of government-funded private organizations that provide services other than education, including health care, foster care, community development, and poverty alleviation,” Garnett wrote

The New Frontier Of School Choice: Zoning
Michael McShane at Forbes

“Some cities, for example, require private schools to get a special exception in order to open but allow public schools to open by right (that is, without all of this lengthy process). If new schools cause issues with traffic, or risk ruining the architectural character of the neighborhood, or are hazardous in one way or another, one would think that would be equally true if the school was public or private. When only one sector needs to jump through all of the hoops, it suggests that those hoops are not serving the purpose they purport to.”

The post Funding Education Opportunity: The Trump administration’s role in supporting school choice appeared first on Reason Foundation.

However, this setback hasn’t deterred the Trump administration from taking a sledgehammer to the agency by slashing over a thousand staff and reportedly eliminating dozens of federal contracts. Winding down the Education Department, an agency long considered dubious by many conservatives and libertarians, is welcome news, but the Trump administration’s slash-and-burn technique could have negative unintended consequences that even undermine its own initiatives.

Winding down the U.S. Department of Education

In March, the Department of Education announced that it would cut its workforce by approximately 50% or 1,900 jobs via layoffs or voluntary resignations. The American Enterprise Institute’s Senior Fellow and Director of Education Policy Studies, Frederick Hess, estimated that these cuts would save taxpayers $400 million in salaries and benefits.

However, the layoffs lack precision because the executive branch can’t cut individual staff; instead, it can “only eliminate whole units or ‘subcomponents’” due to civil service rules, Hess noted. Accordingly, the department’s sweeping staff reductions could result in unintended consequences.

For instance, even though U.S. Secretary of Education Linda McMahon claims she is committed to retaining the National Assessment of Educational Progress (NAEP)—the biannual exam often called the nation’s report card administered by the National Center for Educational Statistics (NCES), which provides insights into students’ progress nationwide—only three employees remain at NCES after the administration slashed its workforce by 97%. 

As a one-of-a-kind study, boasting decades of research that predates the 1980 establishment of the Department of Education, NAEP has often been used by researchers and school choice supporters to make apples-to-apples comparisons of states’ progress and outcomes. Cutting NAEP so sharply shows how the far-reaching layoffs could unintentionally undermine school choice and reform initiatives the Trump administration wanted to retain. 

The Department of Government Efficiency (DOGE) also audited the Department of Education and claims it terminated 89 contracts, valued at more than $881 million. However, AEI scholar Nat Malkus argued that DOGE’s estimated savings are significantly overstated, and that more accurate savings are closer to about $197.6 million in savings, approximately 22% of DOGE’s estimate. 

Altogether, Hess’ and Malkus’ estimated total savings amount to about $600 million or 0.4% of the Education Department’s 2024 budget. 

Hamstringing the Department of Education vs Rebuilding It

While the savings gained through downsizing are underwhelming, the staffing cuts could portend major cultural shifts, especially in the agency’s research branch, the Institute of Education Studies (IES), where 90% of the staff were laid off.

AEI’s Mark Schneider, who led IES during the first Trump and the Biden administration, said he encountered “laziness, [and] corruption” during his tenure there. He even recounts how one staff member openly admitted to being captured by a special interest (which is illegal). 

Bureaucratic red tape often stopped Schneider from implementing even modest reforms, he says. As a result, he argued that the Trump administration’s slash-and-burn techniques at the agency were long overdue. “Every once in a while, you just need to just blow the shit up and rebuild,” he explained.

Rebuilding the Department of Education and its research division, however, is a hotly contested debate on the right. In an interview with the Manhattan Institute’s Chris Rufo, The New York Times columnist Ross Douthat argued that the Trump administration should rebuild the department, filling it with conservatives who would “run the actual bureaucracy.”

Rufo, on the other hand, viewed the department as “beyond reform,” arguing that the Trump administration should cripple the agency as much as legally possible. Unlike Douthat, Rufo believes that conservatives lack the manpower to successfully compete in the Department of Education’s bureaucracy.

So far, Rufo’s arguments seem to have resonated with the Trump administration, especially in light of Secretary McMahon’s recent skepticism of IES’ value to taxpayers. 

Overall, these changes show that the Trump administration plans to run the Department of Education on a skeleton crew and significantly reduce the federal role in K-12 education research. Although future administrations could try to expand the federal department to its previous size, it would likely be a monumental task, especially since many would-be workers could be skeptical of their long-term job security.

What’s next for federal and state lawmakers

While downsizing the Department of Education should be a success, much work remains. Even if the department ceased to exist, many federal grant programs under the Elementary and Secondary Education Act (ESEA), such as Title I, which sent approximately $16.5 billion to school districts in 2021, would continue to operate.

Unfortunately, these funds are allocated opaquely, inflexibly, and lack portability. For example, Title I funds do not follow low-income students who transfer to new schools through public or private school choice programs. 

The next step for Congress is to rethink how federal education funds are distributed. Proposals, such as the A PLUS Act (introduced by Sen. Steve Daines (R-MT) in the Senate and Rep. John Moolenaar (R-MI) in the House), would increase federal education funds’ flexibility so state policymakers can use them for any education purpose under state law.

If codified, most state policymakers would have a chance to change how about 10% of their state education budgets are allocated. Yet, Congress often attaches strings to its funding, and the flexibility of these federal funds would depend much on the federal requirements that accompany them. Plus, to maximize funding flexibility, state policymakers would need to update any related state laws and regulations, which often stifle federal funds’ versatility just as much as federal ones. 

Federal education funding needs to be reformed, and the Department of Education can certainly be downsized, but these efforts should be strategic and student-focused. 

From the States

In other important education and school choice developments across the country, as mentioned briefly above, policymakers advanced public and private school choice laws in New Hampshire, Arkansas and North Dakota. State policymakers are also considering school choice and funding-related proposals in Texas and Alabama.

In Texas, the House approved Senate Bill 2, a private school choice proposal, sending it back to the Senate for concurrence. This is the first time a private school choice bill has successfully passed the state’s lower chamber, according to The Texas Tribune. If signed into law, the program would provide $10,000 scholarships to 100,000 students to pay for private school tuition and other approved education expenses. Participants with disabilities would receive an additional $1,500. Home-schooled students are also eligible to receive scholarships of $2,000. The Texas House also approved a K-12 education funding package amounting to $7.7 billion, increasing per pupil revenues by $395 and providing raises for teachers. 

The Arkansas House and Senate passed Senate Bill 624, which would ensure that students can transfer to any public school inside their school district. It would also require the state Department of Education to collect and publish key open enrollment data. The bill awaits Gov. Sarah Huckabee Sanders’ signature. If codified, Arkansas’ open enrollment law would tie for third best nationwide in Reason Foundation’s annual open enrollment best practices rankings with West Virginia and Arizona. 

Lawmakers in the New Hampshire House passed House Bill (H.B.) 741, which would establish a universal open enrollment program, allowing students to attend public schools with open seats regardless of where they live. If codified, New Hampshire’s open enrollment score would rank fifth nationwide per Reason Foundation’s open enrollment best practices. Additionally, the lower chamber also passed H.B. 115 to expand eligibility to students whose families’ incomes are 400% of the federal poverty limit (current law limits participation to students whose families’ income is 350% of the federal poverty limit).

Due to higher demand than anticipated for Alabama’s new private school choice program, the House Education Budget Chair, Rep. Arthur Orr, proposed increasing the program’s funding from $100 million to $135 million. So far, nearly 37,000 students have applied for scholarships, which are valued up to $7,000 per pupil attending an approved private school. 

The North Dakota House approved Senate Bill 2241, letting charter schools operate in the state. Currently, North Dakota is one of seven states that don’t have any charter schools. 

What to Watch

Despite codifying a robust private school choice law in 2024, Louisiana lawmakers are backpedaling and may not fund the scholarships. 

After 33,000 students applied for Louisiana’s LA GATOR private school choice scholarships, state policymakers want to cut the program’s $50 million in funding. Instead of providing the promised scholarships to students, the legislature’s leadership announced they will use the funds to pay for teacher and support staff stipends. Using the funds set aside for the LA GATOR program would only pay for about 25% of the proposed stipends. 

This month, all Iowa students will be eligible to receive an education savings account valued at nearly $8,000 per student. This new expansion lifts income restrictions that previously limited student eligibility. During the 2024-25 school year, almost 28,000 students received a scholarship.

Utah’s Third District Court ruled that the state’s private school scholarship is unconstitutional. The program, launched in 2024, provided eligible students with scholarships valued at $8,000. In her decision, Judge Laura Scott found that the program’s funding came from revenues reserved for public schools. Utah Governor Spencer Cox plans to appeal the decision.

The Latest from Reason Foundation

–Why open enrollment laws that let public schools reject transfer students aren’t good enough 

–Open enrollment can help New Hampshire’s students and school districts

–Kansas schools fought open enrollment but now need it to stay afloat

–The push for greater oversight of homeschoolers

–Missouri’s 2025 K-12 open enrollment proposals

Reason Foundation also testified or submitted public comments on open enrollment proposals in Montana, Nevada, Maine, and New Hampshire.

Recommended reading 

Less Than Half of Student Borrowers Are Paying Their Loans
Preston Cooper at American Enterprise Institute

“In February 2020, the last month before the payment suspension took effect, 60 percent of Nelnet’s [the largest federal student loan servicer] borrowers were in current repayment on their loans. By February 2025, the share in current repayment had dropped to just 38 percent. Current repayment rates have not risen above 40 percent in the past five months since the payment pause effectively ended.”

Trump’s anti-DEI funding threat hit like an earthquake. This is what’s happened since.
Erica Meltzer at Chalkbeat

“The Trump administration is signaling that states should take its threats to withhold funding seriously. In an unprecedented move, the U.S. Department of Education said Friday it was moving to strip K-12 aid from Maine following an investigation under Title IX — the federal law banning sex discrimination in education — into the state’s policy for transgender athletes.”

The Supply Side of School Choice: What Happens To Private School Tuition When Demand Grows?
Marty Lueken at Informed Choice

“Economic theory predicts that in the short term, both targeted and universal choice programs will increase tuition prices to some extent. In the short term, supply is relatively inelastic. Private schools can’t instantly add seats, build new classrooms, or hire more teachers. As a result, families at some schools may face higher prices and limited availability while the financial assistance from the choice program may or may not cover the new higher tuition.”

The post Funding Education Opportunity: Trump gutted the U.S. Department of Education—what this means for taxpayers and the public appeared first on Reason Foundation.

Nearly 50 years ago, more than 90% of students were enrolled in public schools nationwide, with less than 10% attending private schools and only 20,000 students homeschooling. 

But during the 1980s and ‘90s, more parents began to look for better fits for their children, and cracks started to show in traditional public schools’ monopoly: charter schools and open enrollment laws were codified, letting students attend public schools other than their residentially assigned ones.

Today, “public education is on the verge of an unprecedented crack-up. In fact, it’s already underway,” the American Enterprise Institute’s Robert Pondiscio argues. In the past decade, state lawmakers in these 14 states expanded targeted private school choice programs so that all or nearly all students could use public funds to pay tuition at private schools. 

These reforms officially broke the dam on private school choice as state after state codified expansive private school choice laws. Already, these laws are changing the educational landscape in those states. 

As Figure 1 shows, more than 1.8 million students in six states used public funds to attend public or private schools of their choice. Delaware and Colorado do not have publicly funded private school choice programs. These states were chosen on data availability.

Figure 1: Students using publicly funded school choice in select states

In these six states, charter schools gained the lion’s share of the students leaving public schools—859,000 students or 45% overall. Open enrollment, meanwhile, was the second most common form of school choice in these states, accounting for 36% of transfers or 686,000 students. Lastly, more than 351,000 students or 19%, used private school scholarships to attend private schools. 

In states that lack private school choice programs, students participated in public school choice programs at high rates. For instance, in Colorado and Delaware, 28% and 22% of traditional public school students, respectively, used open enrollment to attend a school other than their assigned ones.

Today, education marketplaces in states such as Florida and Arizona are experiencing major growth with the introduction of universal private school choice programs. Notably, the number of students using public funds to attend schools other than their residentially assigned ones increased by about 150,000 Florida and 49,000 Arizona students—increases of 19% and 14%, respectively—between the 2021-22 and 2022-23 school years.

Overall, these data indicate that parents and students are increasingly choosing public or private school options other than their residentially assigned ones as they seek schools that are a better fit for their academic and family needs. 

Across the country, declining birth rates and increased student mobility mean that traditional public schools can no longer assume guaranteed market dominance. In this new education landscape after the COVID-19 pandemic, public schools must consider dynamic strategies to attract and retain students. 

There are signs this is happening. For instance, the four finalists for the 2025 National Superintendent of the Year all hailed from public school districts in states with universal or near-universal private school choice programs. According to Edweek, each of these superintendents stated that developing “school-to-career pipelines” were key to making “public schools a competitive option for students.”

This sort of innovation is how charter and private schools have carved out niches in the education marketplace. It’s time that public schools responded in kind, creating a diverse schooling ecosystem that is responsive to students’ needs and interests.

From the States

In other important education and school choice developments across the country,  as mentioned briefly above, policymakers passed private school choice laws in Wyoming, Tennessee, and Idaho. School choice proposals also advanced in Missouri and New Hampshire.

Gov. Bill Lee signed House Bill 6004 into law in Tennessee, establishing an education savings account program. As of 2025, 20,000 students can receive scholarships valued at $7,100 to pay for private school tuition and other approved education expenses. Applicants from low-income families will receive priority. The number of scholarships will increase by 5,000 each year after 2026 if 75% or more of available scholarships from the previous year are distributed.

Idaho Gov. Brad Little signed House Bill 93, codifying a $50 million tax-credit scholarship program that provides recipients with scholarships valued at $5,000, which could pay for private school tuition, tutoring, and other approved education expenses. Students with disabilities are eligible to receive $7,500 scholarships.

Gov. Mark Gordon signed Wyoming House Bill (H.B.) 199 into law, establishing a universal education savings account program. Participants can receive scholarships valued at $7,000 to pay for private school tuition and other approved education expenses. In a victory for homeschoolers, Gov. Gordon also signed H.B. 46, eliminating existing regulations that made homeschooling families share their curricula with the local school district.

Missouri House Bill 711 passed the House and is headed to the state Senate. The proposal would establish a voluntary open enrollment program and let school districts cap the number of departing students at 3% of the previous year’s enrollment.

The New Hampshire House passed House Bill 115, and the state Senate passed Senate Bill 295, both of which would make the state’s Education Freedom Accounts universal. Scholarship recipients can use these accounts to pay for private school tuition and other approved education expenses. If codified, the proposal would expand income eligibility over two years so that all students would be eligible to receive an average account valued at $5,400 per year during the 2024-25 school year. The Senate will now consider the bill.

In Texas, the Senate Education K-16 Committee approved Senate Bill 686, which would establish a strong open enrollment law. It would ensure that Texas students could attend any public school, regardless of where they live, for free—without being charged transfer fees. If signed into law, the proposal would improve Texas’s grade from an ‘F’ to an ‘A’ in Reason Foundation’s open enrollment best practices scoresheet, moving the state up to fourth best in the rankings.

What to Watch

Oklahoma Catholic charter school takes its arguments to the U.S. Supreme Court and the White House seemingly tones down plans to dissolve the U.S. Department of Education.

The U.S. Supreme Court has taken a case about Oklahoma’s Catholic charter school claims that it faced religious discrimination after the Oklahoma Supreme Court ordered the state board of education to rescind its contract. The Oklahoma Supreme Court ruled that the state and U.S. Constitution “prohibit the State from using public money for the establishment of a religious institution.” The U.S. Supreme Court is expected to hear the case on April 30.

After numerous reports that President Donald Trump would issue an executive order calling on  U.S. Secretary of Education Linda McMahon to shut down the Department of Education, the administration did not do so. As many legal experts have noted and the secretary has announced, the agency can not be eliminated unless Congress votes to do so. However, the department announced its plans to cut its 4,133-person workforce in half. According to Chalkbeat, one-third of the agency’s workers will be eliminated due to a “reduction in force,” and additional staffing cuts will occur via “voluntary buyouts.”

The Latest from Reason Foundation

–Open enrollment is a school choice policy that both blue and red states can embrace
While many perceive school choice as a red state phenomenon, K-12 open enrollment bucks this trend. Statewide open enrollment laws, which allow students to attend any public school with open seats, have succeeded in seven states, including California, Colorado, Delaware, and Kansas, whose governments were either purple or leaned blue when the laws were passed.

Figure 2: States’ political leanings when codifying statewide open enrollment laws

–Debunking Missouri’s K-12 open enrollment fears
While opponents of open enrollment in Missouri claim that it would create fiscal chaos for public schools and force school closures, these fears are overwrought. Data from other states show that open enrollment helps rural school districts attract students, helps struggling school districts improve their educational programs, and can serve as a stabilizing revenue stream to districts.

–Nebraska aims to have the third-best open enrollment policy nationwide
Nebraska’s open enrollment policy currently scores a grade of B on Reason Foundation’s open enrollment scoresheet of best practices. However, if Legislative Bill 557 is signed into law, it could boost the state’s score to a grade of A.

–Southern California school districts are serving fewer students and facing massive budget deficits

–California bill would make public school interdistrict transfer program more accessible

–Iowa House File 68 would be a step backward for open enrollment

Recommended reading 

Student Well-Being, School Choice, Higher Ed Top Governors’ Priorities for 2025
Bella DiMarco at The74

“School choice remains a key topic this year, with 15 governors addressing the issue. While initiatives to let families use public money for private schooling dominated the discussion, several governors proposed expanding public-school choice, sometimes alongside private-school initiatives.”

Many Children Left Behind: The 2024 National Assessment of Educational Progress Results Indicate a Five-Alarm Fire
Mark Schneider at The American Enterprise Institute

“The 2024 NAEP scores underline a continuing decline in educational achievement in the United States. For years following the No Child Left Behind Act of 2001, the nation focused on the noble but unattainable goal of bringing all our students up to NAEP’s proficiency level. This two-decades-long focus on proficiency hid one of the most damaging—and worsening—trends in American education: the growing number of students who don’t even meet NAEP’s “basic” level of performance.”

The Anti-D.E.I. Crusader Who Wants to Dismantle the Department of Education
Ross Douthat at The New York Times

Douthat: “A big reason that American education writ large is left leaning is that many people who go into it are left leaning. You and I know this very well. Some of my best friends are left-leaning graduates of America’s many fine educational schools. It just seems like it’s sort of pre-emptive despair on the part of conservatives to say, Well, we have political control over this agency that has a certain kind of influence over American education, and we’re just going to give it up because we can’t find enough people.”

The post Funding Education Opportunity: Data on 1.8 million students attending schools of their choice across six states appeared first on Reason Foundation.

My name is Jude Schwalbach, and I’m a senior education policy analyst with Reason Foundation, a national 501c(3) nonprofit policy research organization. I’m testifying on California Senate Bill 399.

California Senate Bill 399 would make the state’s public school interdistrict transfer program, which allows students to transfer to public schools in districts outside of their residentially assigned school districts, more transparent and accessible. It would require the California State Superintendent of Public Instruction to publish an annual report on the Department of Education’s website, showcasing student transfer data at the school district level. This report would show the number of transfer applications granted, rejected, and withdrawn, and why transfer applicants were denied.

It would also detail the number of actual interdistrict transfer students, disaggregated by student demographics and sub-groups, such as low-income students and English Language Learners. If codified, California would be the fourth state in the country to adopt this level of transparency, representing the gold standard in open enrollment reporting provisions.

Overall, it’s a strong bill that would help parents and lawmakers. The California Department of Education publishing an excellent annual open enrollment report would put school districts’ transfer practices at the fingertips of families looking for transfer information and policymakers seeking to improve public schools for the state’s students.

However, Senate Bill 399 could be improved. In addition to showing the number of interdistrict transfers, the report should also include the same data regarding transfers that occur between two schools inside the school district (within-district transfers). 

While California already publishes data on the District of Choice program, it publishes no data on the much larger interdistrict permit system, which was used by almost 156,000 students during the 2018-19 school year, the last year with data available.

Moreover, according to California’s Legislative Analyst’s Office’s 2016 and 2021 reports, demand for interdistrict public school transfers is growing. The Interdistrict permit program added approximately 16,000 participants, or an increase of 11%, between the 2014-15 and 2018-19 school years.

Detailed transfer data, like those proposed in SB 399, can help families better understand the public school options available and show policymakers and taxpayers enrollment trends. 

Wisconsin and Oklahoma publish annual student transfer reports showing similar transfer data to that proposed in California’s SB 399. Notably, Wisconsin has published its report for nearly three decades, and state policymakers have used this information to modernize existing transfer laws to improve public school students’ experiences.

For example, participation in Wisconsin’s open enrollment program, which allows students to transfer to any public school with an open seat, jumped by almost 20% after policymakers adopted a secondary application time period for transfers because the annual reports demonstrated a high demand for the program that couldn’t be served by one application window.  

Adopting these types of detailed open enrollment reports in California would help create more opportunities to improve public school students’ transfer options and ensure that the interdistrict transfer process is fair and transparent to all families. 

The post California bill would make public school interdistrict transfer program more accessible appeared first on Reason Foundation.

And state policymakers are taking note. Since 2020, nine states have significantly strengthened their open enrollment laws, opening opportunities for students and increasing transparency for parents and lawmakers. Most of these states have improved their laws by ensuring students can transfer to any public school with open seats outside their assigned school district (cross-district open enrollment) or by letting students transfer to any school with open seats inside their assigned district (within-district open enrollment).

Last year, state policymakers introduced 85 open enrollment-related proposals. This year, 18 states have already introduced 41 proposals related to K-12 open enrollment during the 2025 legislative sessions. Approximately half of these proposals would positively impact the state’s scores on Reason Foundation’s open enrollment scoresheet, which examines each state’s open enrollment laws in seven critical areas, including allowing cross- and within-district transfers, and making public schools free for all students, which includes not charging transfer students additional fees or tuition. Figure 1 highlights the states whose 2025 open enrollment proposals would pack the biggest punch for students and parents if codified.

Figure 1: Most impactful open enrollment proposals of 2025

Most notably, Alaska’s open enrollment proposals would launch the state from dead last on Reason’s ranking of open enrollment policies to 5th best nationwide, surpassing states with good open enrollment policies, such as Florida and Colorado. Similarly, three other states–Missouri, Nebraska, and Texas–are reviewing proposals that could improve their open enrollment scores from grades of ‘F’ to ‘A’ in Reason Foundation’s rankings. 

In other cases, legislative proposals would make modest but important improvements to their open enrollment laws. For example, Wyoming Senate File 109 would ensure students could transfer to any public school with open seats inside their assigned district. 

Overall, if all the bills in Figure 1 are signed into law, the number of states with strong cross-district open enrollment laws would increase from 16 to 21. Additionally, the number of states with strong within-district open enrollment laws would increase from 14 to 20.

Even in states where proposals don’t significantly improve open enrollment laws, many are still small steps in the right direction. For instance, Oklahoma House Bill 2259 ensures that current transfers can remain in their new school district year after year without reapplying annually.  

In other cases, proposals need only minor tweaks to be vastly improved. Rhode Island Senate Bill 112 requires all districts to adopt an open enrollment policy that lets students transfer schools, but it should be clarified that transfer applicants can only be rejected due to schools having insufficient capacity. 

As the 2025 legislative sessions continue, policymakers should ensure that open enrollment proposals are designed to maximize learning options so every public school student can attend a school that is the right fit.

From the states

In other recent important education and school choice developments across the country, Tennessee policymakers finally passed a private school choice law. School choice proposals also advanced in Texas and Idaho.

Gov. Bill Lee signed Tennessee House Bill 6004 into law, establishing an education savings account program. It would provide 20,000 scholarships valued at $7,100 to students to pay for private school tuition and other approved education expenses. 

In Texas, Senate Bill 2 was passed by the Senate. House Speaker Dustin Burrows stated that the proposal already has enough support to pass in the lower chamber. This proposal would provide $10,000 scholarships to 100,000 students to pay for private school tuition and other approved education expenses. Participants with disabilities would receive an additional $1,500. Home-schooled students are also eligible to receive scholarships of $2,000. Gov. Greg Abbott supports the proposal and declared school choice to be an emergency item.

The Idaho House passed House Bill 93, establishing a $50 million tax-credit scholarship program. Participants would receive scholarships valued at $5,000, which could pay for private school tuition, tutoring, and other approved education expenses. Students with disabilities are eligible to receive $7,500 scholarships.

What to watch

Florida private school scholarship participation continues to surge.

More than 120,000 students applied for Florida’s private school scholarships in the first two days of applications opening. While most applicants sought scholarship renewals, 18% of them were new to the program. Since all of Florida’s private school scholarships became universal, participation has skyrocketed. Between the 2023-24 and 2024-25 school years, participation increased by nearly 85,000 students.

The latest from Reason Foundation

–Alaska aims to be the 10th state to improve K-12 open enrollment in five years 

–Southern California school districts are serving fewer students and facing massive budget deficits 

The expiration of federal COVID-19 relief funds and the loss of students in California’s public schools is causing financial turmoil in many districts. With fewer students meaning less funding for school districts, some districts may have to permanently close schools to right-size operations and best serve remaining students. 

–Assessing the fiscal impact of the Montana Academic Prosperity Program for Scholars

Reason Foundation conducted a fiscal analysis of Montana House Bill 320, which would establish a tax-credit education savings account program that would be available to all students. The analysis examines the potential fiscal impact of the program on the state budget and finds that the net program costs would be affordable to taxpayers--comprising no more than 0.2% of the state budget in its first year. Further, the analysis finds that the total amount of tax credits allowed under the program could be quadrupled and would still equal no more than 1% of the state budget.

–Fiscal Analysis: How Arkansas’ Education Freedom Account program is impacting taxpayers and students 

“For each participating student who would have otherwise enrolled in an Arkansas public school, the state’s EFA program generates about 10% in net state savings because EFA scholarship values are 90% of per-student public school formula funding from the prior year. On the other hand, EFA students already using private education represent a pure cost to the state because they weren’t previously receiving any public resources,” Reason Foundation’s Christian Barnard explains.

Recommended reading 

Trump's plan to abolish the Education Department could fall short yet still hamstring the agency
Erica Meltzer at Chalkbeat

“Sweeping education cuts could be felt just as much by red states as blue states, Resh pointed out. Meanwhile, he said, Congress can’t sit on the sidelines forever. The government is only funded through March. That could force Congress to confront Trump’s spending decisions or provide an avenue to legitimize them.”

The Whirlwind in Washington
Frederick Hess at Education Next

A more nuanced view posits that the [Trump} administration’s ultimate goal is to reduce Washington’s sway in schools and colleges but that accomplishing this requires first uprooting the discriminatory practices and destructive dogmas abetted by past federal activity. Indeed, some conservatives versed in deterrence theory argue that only when Republicans harness the Department of Ed like this will Democrats discover the merits of shrinking Washington’s footprint.

The State of Educational Opportunity in America: A 50-State Survey of 20,000 Parents
50Can and Edge Research

“With many of the activities and experiences explored in this study, lack of opportunity is not just a phenomenon among low-income families. It is a middle-class challenge as well. In many cases, the challenges and barriers faced by middle-class families are much closer to that of low-income families than high-income families.”

The post Funding Education Opportunity: The best K-12 open enrollment proposals of 2025 appeared first on Reason Foundation.

Strong open enrollment laws are popular, especially with families. National polling conducted by Morning-Consult and EdChoice in Dec. 2024 showed that 79% of Democrats, 75% of Republicans, and 73% of independents with school-aged children supported open enrollment.

Many students use open enrollment when strong policies are in place. For example, about one in 10 students used it in Wisconsin, Florida, and Arizona. Similarly, in Colorado and Delaware, 28% and 22% of students enrolled in traditional public schools used open enrollment to attend schools that were the right fit.

Strong open enrollment laws help students in varying ways, such as escaping bullying, accessing Advanced Placement (AP) or International Baccalaureate (IB) courses, shortening commutes, and smaller class sizes. In fact, most open enrollment participants in Florida, Arizona, and Texas used it to attend school districts rated A or B by the state.

If codified, HB 76 and SB 82 would make these options available to Alaska students across the state. Most importantly, they would establish statewide cross- and within-district open enrollment laws. These policies would let students transfer to any public school with available capacity, prioritizing applicants on a first-come-first-serve basis or who already have siblings enrolled at the school.

They would also guarantee that transfer students aren’t charged tuition. This is important since it ensures that students aren’t excluded from public schools because of their families’ income.

These proposals would be a massive improvement if codified, launching Alaska from last place to 5th place nationwide per Reason Foundation’s open enrollment best practices. 

However, these proposals can still be strengthened, especially regarding transparency. For instance, school districts should be required to post their open enrollment policies and procedures on their websites so families know when, where, and how to apply for transfers. 

Additionally, the Alaska Department of Education should publish the detailed open enrollment data that both proposals would require it to collect in an annual report. This would ensure policymakers, taxpayers, and families could hold districts accountable for their open enrollment practices. 

The bills would establish an appeals process for rejected applicants, but they should clarify that a neutral entity, such as the Alaska Department of Education, would conduct the appeal. Districts should also be required to inform rejected applicants in writing why they were denied. These provisions ensure that the open enrollment process is transparent and fair. 

Lastly, policymakers should clarify that school districts cannot discriminate against transfer applicants based on their abilities or disabilities. Reports from Wisconsin and Arizona show that even in states with strong open enrollment laws, students with disabilities are often rejected at higher rates than their counterparts. 

Despite these shortcomings, HB 76 and SB 82 would significantly improve Alaska’s students’ educational options. Currently, Alaska is one of only four states nationwide that doesn’t have an open enrollment law established in state law, scoring 0 points on Reason Foundation’s 2024 open enrollment study. If signed into law, these proposals would make Alaska’s open enrollment policies one of the best in the nation. But most importantly, they would expand educational opportunities for students, helping more children attend schools that are the right fit.

The post Alaska aims to be the 10th state to improve K-12 open enrollment in five years appeared first on Reason Foundation.

The National Center for Education Statistics (NCES) expects these downward trends in public school enrollment to continue. It projects statewide enrollment losses of 15.7 percent by the 2031-2032 school year.

With decreased enrollment and federal pandemic relief funding expiring, Southern California school districts face severe budget crunches. State and local budgets for the next fiscal year are still being developed, but LAUSD’s projected deficit is $94.5 million, Long Beach Unified’s expected deficit is $54 million, and Santa Ana Unified’s is facing a whopping $180 million budget deficit.

School districts facing these massive deficits should be looking to right size. However, new data from Reason Foundation shows that California’s public schools have been slow to respond to the red ink and loss of students. In fact, California has actually closed fewer public schools in recent years. In total, California closed 31 public schools in 2019-2020 but only closed seven public schools statewide in 2023-2024, which is even fewer public school closures than in smaller, rural states like South Dakota and Utah.

Today, California has thousands of underutilized schools. Statewide research published by The 74 shows that 1,400 public schools lost at least 20% of their enrollment during the pandemic, 125 of which were in LAUSD. Underutilized schools are expensive to operate and spread resources thin, which isn’t good for students.

Generally, public school funding is tied to student enrollment, and fewer students mean fewer dollars. But during the pandemic, California’s public schools got a windfall of federal relief cash, and non-federal funding rose faster than in any other state—by $1,691 per student after adjusting for inflation.

California also has a generous hold harmless provision in its funding formula, allowing public schools to collect funding for students they had in previous years but who are no longer at the schools—known as “ghost students.” A Reason Foundation study estimated that California funded 401,000 ghost students in 2022-2023, costing taxpayers $4 billion.

Together, these policies insulated public schools from making difficult budget decisions like closing underutilized schools, even allowing them to give in to teacher union demands for salary increases and bonuses. For example, LAUSD—which got billions in federal COVID relief funds—gave teachers a 21% hike pay hike in 2023 and doled out pay bumps to counselors, psychologists, nurses, and others.

With federal relief dollars expiring and a bleak state budget outlook, school districts are beginning to face fiscal reality. California’s Legislative Analyst’s Office estimates that the state’s budget deficit could grow to $30 billion by 2028-2029, which would put future K-12 funding increases in jeopardy. Statewide, inflation-adjusted public school funding grew by 59% per student between 2002 and 2022, but declining enrollment puts schools in unchartered waters.

School closures are difficult and politically fraught, and they will not alone balance school district budgets. However, they are critical to properly serving the students still in public schools, right-sizing spending, and reaching fiscal sustainability.

State policymakers should shine a light on the problem by requiring the state to collect and report on vacant and underutilized school buildings annually. That way, taxpayers and other stakeholders can hold public schools accountable for being good stewards of public resources. For their part, local policymakers must tackle enrollment declines and school closures head-on and resist attempts to delay or block plans to reduce their facilities footprint.

Ultimately, California’s public schools must prioritize the students still in them, which will require closing schools and making other difficult decisions such as staff and programmatic reductions.

A version of this column appeared in the Orange County Register.

The post Southern California school districts are serving fewer students and facing massive budget deficits appeared first on Reason Foundation.

With falling birthrates—and parents looking to K-12 alternatives such as private schools and homeschooling—state and local policymakers will need to right-size public education. In school districts with significantly fewer students—and presumably fewer dollars— public school closures will be necessary since under-enrolled schools spread resources thin, are costly to maintain, and are often lower-performing.

The most recent federal data from 2021-22 shows that school closures were down by nearly one-third compared to pre-pandemic levels. That’s because many school districts could plug budget holes with the $190 billion in federal COVID-19 relief funding they got during the pandemic. Now that these federal dollars are expiring, public schools are feeling the fiscal impact of losing students.

As states and districts begin grappling with having fewer students and their fiscal realities, new data published by Reason Foundation indicates that public school closures were on the upswing across states in 2024. Reason obtained school closure data from 15 states, including California, Colorado, Florida, and New York, finding that total school closures returned to pre-pandemic levels in 2023-2024. Across the 15 states with data available, there were 98 public school closures in 2023-2024—nearly the same number closed, 99, in 2019-2020.

Despite losing over 5% of their public school students, California’s public school closures declined each year since the start of the COVID-19 pandemic. In 2023-24, only seven public schools in California closed—down from 31 closures in 2019-2020. This was fewer closures than in rural states like Utah, South Dakota, and Iowa.

One reason is that California’s public schools have been flush with state and federal cash, giving them little incentive to right-size. California’s public schools got $23.4 billion in federal COVID-19 relief funds during the pandemic, while non-federal funding increased by $1,691 per student in real terms between 2020 and 2022—the highest growth rate in the country.

In the coming years, school closures will be a heated issue on school board agendas in California and other states. Already, battles are taking place in big cities experiencing significant enrollment declines, such as Oakland, San Francisco, Boston, Seattle, and others.

Reason Foundation offers five recommendations for how state policymakers can address declining public school enrollment, including shoring up teacher pension systems that can drain money away from classrooms, eliminating hold harmless funding protections that give schools money for students no longer there, and modernizing facilities funding and management by right-sizing operations, selling unused land and buildings. 

Lawmakers should also pay close attention to Indiana, which offers a model for shining a light on empty school buildings and strengthening rights for charter schools. In 2023, Indiana lawmakers established reporting requirements for school districts whose enrollment declined by 10% or more in the preceding five years. These districts must conduct an annual review to identify buildings eligible for closure under the policy and report their findings to the state. Importantly, under-enrolled school buildings are now included in the state’s right of first refusal policy, which gives charters access to vacant or under-utilized facilities for just $1. Policymakers in other states could also consider extending these protections to non-profit education providers.

Public schools must adapt to their new enrollment reality. This won’t be easy, but in the long-run it’s best for students, taxpayers, and communities. 

From the States

In other important education and school choice developments across the country, South Carolina policymakers are seeking to bypass constitutional challenges to private school choice, and Tennessee and Wyoming policymakers introduced proposals to significantly expand existing private school choice programs.

In a proclamation, Tennessee Gov. Bill Lee called for a special legislative session, beginning Jan. 27, to pass expansive private school choice reforms. Nearly identical proposals in the state House and Senate would make about $7,100 private school scholarships available to 20,000 students annually. The first 10,000 scholarships would be reserved for students whose families’ incomes are below 300% of the federal poverty limit. Currently, private school scholarships are only available to students from low-income families in Davidson, Shelby, and Hamilton counties.

South Carolina’s State Supreme Court struck down the state’s private school choice program in 2024 as unconstitutional, stating that the state cannot directly fund private schools. However, South Carolina policymakers aim to circumvent this ruling with funding tweaks. Instead of funding the program via the general fund, the new proposal would use funds from lottery revenues. If passed, 15,000 eligible students could receive scholarships valued at $8,500 to pay for private school tuition in 2027.

In Wyoming, House Bill 199 aims to expand the state’s limited education savings account into a universal program, providing $7,000 scholarships per family to pay for non-public education costs. Last year, state policymakers passed an expansive private school scholarship program, but Gov. Mark Gordon line-item vetoed the proposal to limit student eligibility to those whose families’ income was less than 150% of the federal poverty limit.

Texas Gov. Greg Abbott announced he has the necessary votes to pass school choice proposals this year. Moreover, Sen. Brandon Creighton, the Chair of the Senate Education Committee, introduced Senate Bill 2 which would provide private school scholarships to 100,000 K-12 students valued at $10,000. Scholarship recipients could use these funds to pay for tuition at accredited private schools, textbooks, and other eligible education expenses. Moreover, the bill would provide recipients with disabilities scholarships valued at $11,500. Additionally, homeschooled participants could each receive scholarships valued at $2,500.

What to Watch

Indiana Gov. Mike Braun called for universal private school choice.

In his first state budget, Indiana Gov. Mike Braun announced plans to increase K-12 funding by 2% each year and make the state’s near-universal private school scholarship universal. Currently, students whose families’ incomes are less than 400% of the federal poverty limit can receive $6,200 scholarships, which can pay for private school tuition.

The U.S. Supreme Court announced that it will hear oral arguments regarding religious charter schools which were ruled unconstitutional by Oklahoma’s State Supreme Court last summer. The virtual charter schools would have been operated by the Catholic Archdiocese of Oklahoma City and the Diocese of Tulsa. All concerned parties must submit their briefs to the U.S. Supreme Court by April 21, 2025.

The Latest from Reason Foundation

–More than 20 percent of publicly funded students in Delaware use open enrollment to choose schools About 26,000 students, more than 20%, used K-12 open enrollment in Delaware during the 2020-21 school year. This policy can help students escape bullying, access specialized courses, smaller class sizes, and shorten commutes.

–Public school closures were on the upswing in 2024 Permanent school closures seemingly paused during the pandemic as districts were temporarily buoyed by federal pandemic relief funds. But as those funds expired and districts felt the effects of lower enrollments, school closures increased in regularity. 

Fiscal Analysis: How Arkansas’ Education Freedom Account program is impacting taxpayers and students “The Arkansas EFA program’s true cost (i.e., net cost) is substantially lower than its total cost. That’s because switchers generate substantial offsetting state fiscal savings that can account for as much as half of the total costs” writes Reason’s Christian Barnard.

–Public school enrollment is plummeting. Here are five things policymakers can do about it Instead of delaying the inevitable, policymakers should proactively consider how they can shore up districts’ finances, especially as K-12 enrollments drop and enrollment projections look grim. Solutions include shining a light on vacant facilities, strengthening rights for charters and other K-12 providers, eliminating funding protections, and shoring up teacher retirement systems.

Universal School Choice Programs Probably Cost States Money. They’re Worth It. At Education Next, Reason’s Christian Barnard analyzes how universal school choice policies impact state budgets by using Arizona’s universal education savings account program as a case study. He argues that while it’s likely that universal school choice costs states money in the short run, the costs aren’t nearly as high as opponents claim and are still a small portion of state budgets. Additionally, he argues that the benefits of expanding educational options on a large scale are worth the cost tradeoff.

Recommended reading 

Public Schools Added 121,000 Employees Last Year, Even as They Served 110,000 Fewer Students
Chad Aldeman at The74

“Despite all the continued attention to supposed teacher shortages, the truth is that schools employ more educators than ever. At the same time that student enrollments fell by 1.3 million (a decline of 2.5%) over the last five years, schools added the equivalent of 55,000 teachers.”

Shrinking Indianapolis Schools Could Be Dissolved, Turned Into Charters
Patrick O’Donnell at The74

“The bill targets districts where so many students have left for charter and private schools that fewer than half remain in district schools. It would shut all five districts, including the Gary Community School Corporation near Chicago, by 2028. Schools would then be turned over to charter schools that would be overseen by new panels appointed by the governor, Indiana charter school boards and local officials.”

Don’t want to close underenrolled schools? Here’s how to make the math work.
Marguerite Roza at the Thomas B. Fordham Institute

“What isn’t financially viable? A school with the full complement of typical school staff but fewer kids. These aren’t purposely designed small schools, rather they’re underenrolled large schools (sometimes called “zombie schools”). Los Angeles Unified School District, for instance, has a slew of tiny schools spending over $30,000 per pupil. Such schools vary in performance, but all sustain their higher per-pupil price tag by drawing down funds meant for students in the rest of the district. In the end, no one wins.”

The post Funding Education Opportunity: Public schools closing as enrollments decline appeared first on Reason Foundation.