North Carolina’s school‑choice expansion has produced a complicated reality: private schools and education entrepreneurs say there is “room to grow,” yet persistent barriers threaten their ability to meet rising parental demand, according to a new John Locke Foundation report released this month.
The report, “Room to Grow: Evaluating Private School Readiness for School Choice Demand in North Carolina,” analyzes two spring 2025 surveys — one of private school leaders and one of education entrepreneurs — and summarizes capacity, finance, and regulatory issues facing private and alternative K–12 providers as school choice expands. The report is co-authorized by Dr. Robert Luebke, director of the Center for Effective Education at Locke, and Kaitlyn Shepherd, a policy analyst with the center.
School choice landscape
Today, more than one in four of NC’s roughly 1.8 million K–12 students attends a charter, private, or home school, reflecting a steady shift toward school choice across the state, the report found.
The school choice landscape in North Carolina is anchored by the Opportunity Scholarship Program — the state’s voucher that helps families afford a private school education — and the ESA+ program for students with special needs.
Enrollments in the Opportunity Scholarship Program jumped after the legislature removed income limits in 2023, with the program awarding more than 80,000 scholarships in 2024–25. Private‑school enrollment has risen by about 32,000 students — a 31% increase — since 2020, yet only 179 new private schools opened during that same period.
The State Board of Education reports that just 8.4% of recent Opportunity Scholarships recipients were prior public‑school students, meaning most new voucher awards went to students already enrolled in private schools.
Capacity challenges
The John Locke/EdChoice School Capacity Survey collected responses from 177 private schools representing about 25,000 students. Those schools reported combined capacity of 31,845 — leaving 6,818 open seats and an average utilization of roughly 79%. In other words, the responding schools had about 21% unused capacity.
At the same time, private‑school leaders expressed concern about future space and staffing: 92% expect demand for their services to increase over the next three years — 50% “significantly,” 42% “slightly” — and nearly half said they were moderately to extremely concerned about seat/space capacity over the next three to five years.
On finances, respondents’ average tuition in the sample was $8,748 — noted as well below the statewide private‑school average cited in the report, $13,231. Roughly two‑thirds of students at responding schools receive financial assistance, with the average aid package being $5,071 — covering about 78% of the typical tuition at those schools.
Many private schools reported plans to add seats, classrooms, or expand on current campuses. Asked for their short‑term plans of one to two years, the answers most commonly included adding seats within classrooms at 53%, adding classrooms at 47%, and expanding campus facilities at 39%.
But schools and entrepreneurs identified consistent barriers: lack of revenue and capital, limited facilities or infrastructure, zoning and building regulations, and difficulty finding qualified teachers and staff.
In the private‑school survey, lack of revenue was cited by two‑thirds of respondents as a reason for no current expansion plans. In a companion survey of education entrepreneurs, 57% called lack of funding a major barrier to launching or scaling new programs.
In the education entrepreneur survey, 87% of respondents said they plan to start or expand a school or program. Funding sources cited included tuition/earned revenue, personal funds, philanthropy, and revenues from school‑choice programs. Entrepreneurs also flagged zoning and safety, fire, and health rules, land‑use permits and program participation regulations as notable constraints. Despite those obstacles, many entrepreneurs reported that competition for funding — not competition from other schools — is the clearest market friction.
Recommendations
To help supply respond to growing demand, Locke report offered six policy recommendations:
- Stabilize funding by moving OSP and ESA+ to formula‑based funding rather than annual appropriations so providers have predictable revenue streams.
- Market OSP and ESA+ more broadly, possibly by creating a scholarship‑granting office, to boost awareness and steady demand.
- Expand access to capital by creating loan and grant funds for facilities and operations, incentivizing private giving with tax credits, and enabling tax‑exempt bonds for private school construction.
- Reduce regulatory burdens that go beyond health and safety by simplifying zoning and building rules relevant to small or alternative schools and applying regulations equitably.
- Encourage public–private partnerships and organizations to coordinate private‑school interests and capital solutions.
- Encourage entrepreneurship by lowering administrative burdens, allowing experimental models to scale, and offering targeted financial incentives.