To boost long-term viability, independent schools must strengthen their value proposition. Achieving this involves more than updating messaging or improving programs; it requires addressing the financial realities that dictate their future. With shifting demographics, economic instability, and fluctuating insurance and labor markets, financial sustainability is a growing concern—even for resilient schools. As a result, today’s schools are compelled to diversify revenue beyond tuition and philanthropy, and to adopt strategic planning for previously unlikely risks.
In our chapter in the new 2025–2026 NAIS Trendbook, we share insights, and research, explore the forecast for financial sustainability. We address how emerging risks and insurance market volatility will force schools to be more strategic, the importance of diversifying revenue streams, and the impact of school choice. The following is an excerpt that dives deeper into school choice, providing a comprehensive and nuanced discussion of the role school choice could play in boosting private school enrollment while also considering how economic uncertainty and demographics may limit its impact.
The Wake of School Choice Initiatives
Since Gallup’s first “Mood of the Nation” survey in 2001, Americans have grown increasingly dissatisfied with public education. By 2025, only 24% of adults expressed satisfaction with the quality of public schools—a 24-year low compared to 40% in 2001. Among adults in households with annual incomes of $100,000 or higher, satisfaction rates were even lower, at 16%. Dissatisfaction had already been increasing since 2016, but it deepened following the first year of the pandemic, when many schools shifted to online or hybrid instruction.
A 2024 study by Tyton Partners underscores this shift: During the pandemic, many parents gained a deeper understanding of both the strengths and the shortcomings of their children’s education. Nearly 60% reported that the pandemic had reshaped their educational preferences and expectations. Interest in alternatives to traditional schooling surged, with almost 80% of parents agreeing that learning could—and should—take place anywhere. Notably, parents exploring new or different learning pathways represented the largest segment of K–12 families, accounting for 48%.
Similarly, research from the National School Choice Awareness Foundation found that more than half (53.7%) of parents considered or were considering switching schools for their children, and almost two-thirds expressed a desire for more information about alternative options, such as charter schools, private or faith-based schools, homeschooling, or full-time online learning.
Alongside shifting parental preferences, the expansion of the school choice movement and the expiration of pandemic-era aid are intensifying financial pressures on public schools and their programs. Moody’s most recent report on K–12 public schools noted that traditional school districts have limited options for responding to these pressures without additional support from their states, raising the likelihood of service reductions.
Meanwhile, the legislative momentum behind school choice continues to grow. In 2024 alone, the National Conference of State Legislatures reported that 44 states and territories introduced 561 bills on expanding school choice, including private educational choice. Of these, 21 private school choice bills were enacted that year.
By June 2025, 30 states, the District of Columbia, and Puerto Rico had at least one private school choice program. Notably, 19 of these states offer universal access to K–12 students or are on track to do so—that is, the programs are open to all families regardless of disability status, income, location, or public school performance. These programs span a range of mechanisms, including education savings accounts, vouchers, tax-credit scholarships, tax-credit education savings accounts, and direct tax credits.
The potential boost to private school education could grow even more dramatically now that Congress has enacted a permanent, uncapped federal tax credit for private school donations. Under the new law, individuals who donate up to $1,700 annually to scholarship-granting organizations (SGOs) receive a 100% dollar-for-dollar federal tax credit. These SGOs will distribute funds to help families cover a wide range of educational expenses—including private and religious school tuition, homeschooling costs, tutoring, technology, transportation, and other expenses—with eligibility limited to households earning up to 300% of their area’s median income. However, states are required to opt in, so families in those states that do not do so will be ineligible. SGOs must operate independently of any school, and parents cannot earmark donations for their own children; instead, the SGOs are responsible for determining which students receive aid.
Amid growing interest in alternative schooling options, the expansion of private school choice programs and the potential reduction of public school services may drive more families to consider independent schools. However, this favorable trend may be tempered by ongoing economic uncertainty. According to Gallup, a majority of Americans are concerned about financial issues, particularly the economy, health care costs, the environment, and Social Security. Reflecting this reality, the University of Michigan’s consumer sentiment index was 55.1 in September—down from 58.2 in August and 70.1 in September 2024—due to expectations of an economic slowdown and rising inflation.
At the same time, demographic shifts are compounding enrollment challenges. Between 2007 and 2024, the U.S. experienced a 16% decline in births, a trend that directly affects school enrollment. According to the National Center for Education Statistics, total enrollment in U.S. elementary and secondary schools is projected to decline by 5% between 2024 and 2031, while private school enrollment is expected to fall by an even steeper 13% over the same period. These opposing forces—rising interest in independent education and mounting economic and demographic headwinds—will require schools to work harder and more strategically to meet their enrollment goals.
A Roadmap for What’s Ahead
The landscape of independent education is marked by both challenges and opportunities. Families are reimagining what learning can be, policies are evolving rapidly, and schools are expected not just to adapt, but to lead. The 2025–2026 Trendbook captures this pivotal moment, offering a clear-eyed assessment and practical guidance. While uncertainty persists—from economic pressures to declining enrollment—schools that embrace innovation, communicate their stories confidently, and remain true to their missions can not only weather these changes but shape the future of education.