The coronavirus recession, the Great Lockdown, and the Great Suppression are all terms used to describe the global economic downturn produced by COVID-19 mitigation measures. As elected officials issued stay-at-home orders and closed “nonessential” enterprises, unemployment skyrocketed. From mid-March to mid-April, about 22 million Americans, or roughly 13.5% of the labor force, filed initial claims for unemployment benefits. Economists estimate the national unemployment rate may peak at 20% and remain near 10% through the end of the year.
These unnerving economic conditions affect the lives of families in numerous ways. As household incomes drop — or virtually disappear — families seek ways to cut spending wherever possible. It starts with canceling vacations and slashing expenditures on entertainment, restaurant meals, and nonessential items. Eventually, they make the tough choice to forgo a private school education for their children in favor of sending them to the local public school.
These are not wealthy parents who send their children to elite boarding schools. Most are middle-class parents who make meaningful financial sacrifices to send their children to small, faith-based private schools that complement the needs of the child and the values of the family. In a recent report, N.C. State researchers examined data from schools that participate in North Carolina’s voucher programs to estimate the cost of private school tuition in the state. The median tuition charged in North Carolina private schools during the 2016-17 school year was $5,483, or about $105 per week.
Last year, 102,400 students were enrolled in 769 private schools in North Carolina. If this year’s enrollment grew at the previous year’s rate, a 10% drop in private school enrollment would divert an estimated 10,321 private school students into public or home schools. Only about one in 10 North Carolina students receive public dollars to pursue a private school education, so most private school students who make the switch to public schools require a net increase to the public education budget.
Cost estimates for this 10% student migration vary. On the low end, EdChoice researchers estimate that state and local governments would need to increase their education budgets by about $90.6 million just to accommodate these former private school students. On the high end, Foundation for Excellence in Education researchers warn that a fiscal impact could exceed $120 million. North Carolina public schools can’t afford a budget increases of this magnitude due to the collapse of state and local tax revenue.
Private school leaders aren’t fiddling while Rome burns. Some private schools applied for Paycheck Protection Program loans, an initiative included in the $2-trillion CARES Act that awards low-interest loans to small businesses and nonprofits. The loans can be forgiven if the business or organization meets certain spending and payroll conditions. Less than two weeks after its launch, the U.S. Small Business Administration exhausted the entire $350 billion Paycheck Protection Program budget.
Private schools are eligible to receive grants from other CARES Act programs, most notably the $3 billion Governor’s Emergency Education Relief Fund. GEERF, which is a ridiculous acronym that apparently is also an Afrikaans word meaning “inherited,” is a $3–billion portion of the $30.75–billion Education Stabilization Fund.
GEERF authorizes governors to use federal dollars to meet the current needs of students in district, charter, and private schools. North Carolina will receive $95.6 million from the governor’s fund. Gov. Roy Cooper likes private schools enough to send his daughter to one, but he has been an outspoken critic of publicly funded voucher programs for low-income and special needs students. As such, private schools in North Carolina will not receive a share of these funds.
Finally, school leaders may make a push to expand one or more of North Carolina’s three private school choice programs. For example, the General Assembly could create a lifeline provision in the law that extends the Opportunity Scholarship Program to current private school families that meet the household income requirements due to a recent job loss or similar circumstances. In most cases, the cost of these vouchers would be less than the marginal cost required to add the private school student to public school rolls.
In the short term, private schools face the prospect of losing thousands of students due to the coronavirus recession. The long-term challenges are just as daunting. In an open letter to private school leaders, Benjamin Scafidi and Eric Wearne of Kennesaw State University in Georgia point out that the declining birth rate will test private schools for years to come. Scafidi and Wearne report “the number of births in the United States fell by 12% from 2007 to 2018 — from 4.32 million in 2007 to 3.79 million in 2018.” As the number of children decreases, so too does the pool of potential students and the tuition dollars that come with them.
Tough times are ahead for all educational institutions, but private schools may be in the most precarious situation of them all.
Dr. Terry Stoops is vice president of Research and director of Education Studies at the John Locke Foundation.