Dive Brief:
- Budget shortfalls and declining enrollment top the list of most common challenges for school districts, according to a Rand Corp. survey released last week. Over half — 54% — of district leaders reported difficulties with addressing budget shortages, and 36% grappled with declining enrollment in spring 2026.
- While challenges with enrollment and finances grew this year, Rand found lower concern over other issues compared to 2025. For example, fewer district leaders reported challenges with recruiting and retaining effective teachers, dropping from 42% in 2025 to 35% in 2026, and challenges in curbing chronic absenteeism fell from 38% to 31%.
- In this year’s survey, 40% of districts said they were considering marketing campaigns to combat enrollment declines by promoting the benefits of attending public schools. A third of districts are eyeing expanded pre-K services to engage families sooner.
Dive Insight:
To better understand why budget shortfalls and enrollment declines are school districts’ biggest concerns, Rand interviewed 38 district leaders — who nearly all said that school finances are strained by “rising costs that now outstrip the revenue coming in.”
Ten of those leaders cited inflation in operational costs such as utilities, transportation, facilities, and goods and services. Over half of those interviewed also said that mandatory, contracted cost-of-living raises for educators are a key factor adding to budget shortfalls, particularly because salaries and benefits make up a large part of district budgets.
Other newer and ongoing costs that district leaders told Rand they must keep up with include: growing numbers of students qualifying for special services, demand for mental health supports, and state requirements to adopt high-quality instructional materials.
Budget shortages, declining enrollment rise to greatest district challenges
A majority of superintendents also told Rand that their per-pupil state allotments are not keeping pace with their district’s increasing needs.
In fact, financial and enrollment challenges nationwide have led to budget and staffing cuts as well as school closures and consolidations — particularly in the past school year.
According to the Rand survey, rural districts were the most likely to report challenges with declining enrollment at 39%, compared to 37% of urban and 25% of suburban districts. Budget challenges were equally felt by rural and suburban districts at 55%, while 47% of urban districts said the same.
“Districts grappling with enrollment decline are therefore facing not only the immediate budget pressures described above but also the prospect of continued declines in enrollment and funding,” the Rand report said.
Even though rural districts are in a somewhat more precarious position regarding enrollment, Rand said that these districts are less likely to be planning specific strategies to increase enrollment. That could be because they face less competition from nearby private schools than urban and suburban districts do, the report said.
District leaders interviewed by Rand cited declining birth rates, labor markets or out-migration as reasons for enrollment declines. But they were also aware of the growing impact from school choice. While they told Rand that declining birthrates were out of their control, many district leaders said they were working to retain current students and attract more students.
Alongside marketing campaigns and pre-K expansions, Rand found that 33% of surveyed districts are also planning to offer more extracurricular or specialized programs like sports, gifted and talented initiatives or out-of-school programs as strategies to boost enrollment.
Some 481 K-12 school districts responded to Rand's spring 2026 American School District Panel survey, which was conducted between March 18 and May 4.
