On My Mind: The Forces Shaping the Independent School Market

Fall 2022

By Donna Orem

This article appeared as "Ride Alert” in the Fall 2022 issue of Independent School.

In the summer of 1998, I had just started my career at NAIS and simultaneously started investigating independent middle schools in Washington, DC, for my son. I felt like I knew him pretty well and identified two schools that I thought were good fits academically and culturally. I knew how stiff the competition would be, and once I started doing the research it became even clearer. At the time, area independent schools were bursting at the seams with applicants, and families were applying to numerous independent schools in the hopes of attaining a place in at least one. I did the same, applying to both schools and worrying that perhaps I had not cast the net wide enough.

To put that in perspective, acceptances as a percentage of applications for the NAIS membership were 58% in 1999; by the 2021–2022 school year, they had risen to 71%, according to NAIS’s Data and Analysis for School Leadership (DASL). The independent school market has certainly changed over the years and will continue to. What does it look like now? What factors will shape enrollment and the market in the years ahead? 

Fewer Students

According to the “2022 Condition of Education” report, issued annually by the National Center for Education Statistics (NCES), pre-K through grade 12 public school enrollment dropped from 50.8 million students in fall 2019 to 49.4 million in fall 2020, a 3% decline that brought total enrollment back to 2009 levels. Private school enrollment also fell from 4.9 million to 4.7 million from 2017 to 2019 (2020 data not available). Some other trends in that time period include:
  • From 2019 to 2020, enrollment rates fell by 6 percentage points for 5-year-olds (from 91% to 84%) and by 13 percentage points for 3- to 4-year-olds (from 54% to 40%).
  • Enrollment in public pre-K through grade 8 increased by 3% (from 34.4 million to 35.6 million) from fall 2019 to 2020 and then dropped 4% to 34.1 million students in fall 2021.
  • Enrollment in public school grades 9 through 12 increased 2% between fall 2009 (15 million) and fall 2019 (15.2 million) and continued to increase in fall 2020 to 15.3 million.
Looking ahead to 2025–2026, the school age population is projected to decline by 4.9% overall, according to DASL demographic data, with the largest decline (6.3%) in the 0–4 population, followed by a 5.6% decline in the 14–17 population, 4.3% in the 5–9 population, and 3.4% in the 10–13 population. Looking even farther ahead, 2030 will be a demographic turning point in the U.S.—all baby boomers will be older than 65. At this point, one in every five Americans is projected to be of retirement age. Later that decade, by 2034, the U.S. Bureau of Labor Statistics projects that older adults will outnumber children for the first time in U.S. history. 

A Volatile Economy and Wavering Confidence

Economic conditions will also likely impact private school enrollment in the near future, as pandemic effects continue to shake consumer confidence and affect how families allocate spending among their priorities. 

According to an April 2022 Pew Research study on the pandemic’s impacts on finances, lower- and middle-class families experienced the most financial hardship. From 2019 to 2020, the median income of lower-income households decreased by 3%, and the median income of middle-income households fell by 2.1%. In contrast, the median income of upper-income households in 2020 was about the same as it was in 2019. The pandemic also increased the wealth of upper-income families; the share of aggregate U.S. household income held by upper-income families reached 50% in 2020, up from 46% in 2010, while the share held by middle-income families decreased from 45% to 42%, and by lower-income families from 9% to 8%, over the same time period. To fully understand how this will affect school enrollment and financial aid, it is useful to understand how Pew categorized the various classes, defining “middle-income” adults in 2021 as those with annual incomes of $52,000 to $156,000, “lower-income” adults as those with incomes less than $52,000, and “upper-income” adults as those with incomes of $156,000 and over.

Given the volatility of the stock market and rising inflation, consumer confidence is wavering, which could affect the willingness of even the well-resourced to make long-term spending commitments, such as a school tuition. According to recent University of Michigan Surveys of Consumers research, consumer sentiment slumped to a record low between May and June 2022, similar to the low reached during the 1980 recession. And, because of rising costs, consumers are digging deeper to cover necessities, which will impact their discretionary spending.

Parents and Polarization

Another potential determinant for independent school enrollment is how societal polarization will affect school choice. Although media coverage has highlighted a growing wave of parental frustration with schools, a nationally representative parent poll conducted by NPR and Ipsos in April 2022 indicates that most families are very pleased with the school their child attends. When reflecting on their school’s performance during the pandemic, 88% of respondents agreed “my child’s teacher(s) have done the best they could, given the circumstances around the pandemic.” And 82% agreed “my child’s school has handled the pandemic well.” The majority of parents (76%) also felt that their school did a good job informing them about the curriculum, including potentially controversial topics. These numbers support how important it will be to continue to keep families informed and in dialogue throughout the coming years.

The NPR/Ipsos survey also confirmed that many parents are concerned about the impact of the pandemic on their child’s mental health, with 73% saying that their child would benefit from mental health counseling. Also of note was that survey respondents were less concerned about their child’s learning loss than they were in 2021. When asked about progress in various areas, 40% and 38%, respectively, said that their children were ahead of where they should be in reading/writing skills and math/science skills. Additionally, 48% reported that their child was on track in reading/writing skills and 51% in math/science skills. Parents also said they felt more confident about their child’s socialization and communication skills, with only 11% of parents reporting concern that their child was behind where they should be. Nearly the same is true for their child’s time-management abilities, with only 15% of parents reporting concern in this area. These findings could open the door for more emphasis on student well-being in the coming year.

What other pandemic effects could affect school choice in the year ahead? According to nonpartisan school choice organization EdChoice’s latest monthly poll, many parents would like to continue some form of hybrid schooling. When asked, “After the pandemic, if given the option, to what extent would you prefer schooling to be scheduled each week at home with a parent or tutor to provide the best education for your child?,” 8% responded one day per week, 17% two days, 13% three days, 5% four days, and 13% fully at home. These results may indicate that schools can find a middle ground that offers both parents and teachers more flexibility in where schooling occurs in the years ahead. And finally, EdChoice’s Schooling in America poll continues to highlight parent satisfaction with school types, with 72% of respondents noting that they are very satisfied with private schools, compared to 63% for home schooling, 40% for charter schools, and 31% for public district schools. 

As we consider the headwinds and tailwinds in the enrollment market ahead, schools will need to craft plans that consider both their parents’ Jobs-to-Be-Done and the price point at which they can afford that job. We have some momentum coming out of the pandemic to build on, so let’s take advantage of that to ensure long-term sustainability for independent schools.

Although I didn’t think of it as my Job-to-Be-Done as a parent looking for a school nearly 25 years ago, my experience navigating the DC school market to find the right environment for my son was exactly that. And the wonderful Edmund Burke School in Washington, DC, which my son was accepted to and graduated from, delivered, helping him develop his passion.
Donna Orem

Donna Orem is NAIS President.