There are currently over 5.7 million students enrolled in private schools in the U.S.—totaling 10% of the K-12 student population. Private schools serve a wide range of students, with many dedicating themselves to serving low- and middle-income communities. These schools do this by offering scholarships and other forms of financial aid and sometimes operating at a deficit so they can serve any student who applies.
Like their public-school counterparts, private schools are also experiencing disruption in the time of COVID-19. While some won’t feel the financial pain that comes with an economic recession until the fall, the struggle has already begun for many. During times of economic downturn, private schools are historically at risk of closure.
A flood of private school students returning to public schools could overwhelm—even cripple—public schools as they struggle to recover from this crisis.
Private School Closures Affect Private Schools and Public Schools Alike
Public schools rely upon revenue from federal, state and local sources, and different states have different formulas for determining the amount of state and local funding that contributes to overall per-pupil spending. Private schools, on the other hand, charge tuition to meet operational expenses. In states with private school choice programs, students can use government funds to pay for all or part of their tuition, but even then, most schools rely upon some families to pay tuition out-of-pocket. When states closed schools to slow the spread of COVID-19, private schools began to lose the revenue that will enable them to re-open in the fall.
Why? Families who have lost jobs or taken pay-cuts may not be able to pay tuition for the remainder of the 2019-2020 school year. Most likely, they will opt to not re-enroll in their private school for fall. Declines in private school revenue, both current and future, will be compounded because many schools depend on philanthropy to cover costs that tuition alone can’t meet. Donations from individuals, corporations and even large foundations decrease in times of economic uncertainty. Faith-based schools associated with churches have already forfeited funds that comes from charitable donations collected at church services each week.
Consequences of Students Leaving Private Schools
If private schools close or students leave their private school, as many did during the Great Recession, the consequences will be swift and serious:
- Students will suffer from an abrupt disruption in learning as they transfer from schools they chose to new school environments.
- Local school districts will have to absorb hundreds of thousands—perhaps millions—of students who can no longer afford to pay tuition or have seen their schools close. This will come at a time when districts are facing their own financial uncertainty.
- Higher student enrollments in district schools causes a problem for states as well: in a time when they need to reduce spending, states will be forced to send more money to public schools.
Looking at the Data
At the end of the day, private schools save states and districts money. If they close because of this unprecedented crisis, all students—not just those in private schools—will feel the pain.
How Can We Prevent Private Schools from Closing?
There are ways to mitigate the risks of private school closures. Under the CARES Act private schools are eligible to participate in the Paycheck Protection Program, a forgivable loan that private schools can use to make payroll, rent, mortgage interest or utilities payments. Private schools are also eligible to receive money from the CARES Education Stabilization Fund. When federal or state funds are distributed to districts, private school students in their purview are to receive “equitable services,” just as they would under the Elementary and Secondary Education Act (ESEA).
The CARES Act also provides governors with the flexibility to send some portion of the Governor’s Emergency Education Relief Fund directly to private schools. In a time when sudden and overwhelming private school closures could so adversely impact private and public-school students alike, governors can consider allocating some portion of CARES funding to support all students, no matter where they are educated. Below are potential options for Governors to consider which may mitigate the risks of private school closures:
- Earmark a portion of Governor’s Emergency Education Relief Fund to support private schools, especially those that serve concentrations of low-and middle-income students. Any funds allocated to private schools should be flexible enough to support both students and teachers. Everything from tuition support and relief to teacher training in distance education should be possible.
- Ensure that state ombudsmen closely and transparently monitor the distribution of funds that school districts are obliged to give private school students under the equitable services provision of the CARES Act. Make data on the distribution of funds available and easily accessible to the public.
- Use some portion of the Governor’s Emergency Education Relief Fund to provide means-tested grants to families that they can use for educational purposes, including but not limited to: educational hardware and software, internet connectivity, privately-provided distance learning, and private school tuition.
- Provide tax-credits to parents who continue making tuition payments to private schools during extended school closures. If your state has a tax-credit scholarship program, ensure that individuals and corporations that donate to scholarship granting organizations receive a 100% tax-credit for their donations.
Explore ExcelinEd’s recent guidance on The CARES Act for private school leaders.
About the author
Cara Candal serves as Director of Educational Opportunity, focusing on private school choice, for ExcelinEd. Cara has spent the last 10 years working in education policy as a Senior Fellow with both Pioneer Institute and the Center for Education Reform. She was also a founding team member of the National Academy of Advanced Teacher Education (NAATE) and a research assistant professor at Boston University in the Department of Educational Leadership and Development. Cara has authored/edited more than 25 papers and three books on education policy. She earned a Bachelor of Arts in English Literature from Indiana University, a Masters of Arts in Social Science from the University of Chicago and a Doctorate of Education from Boston University.