Enrollment in private schools in North Carolina is up 40% in the last 10 years. Today one in four students is educated in a private, charter, or homeschool. Important questions derive from these developments: Can private schools continue to meet the growing demand for more educational options in North Carolina? Does North Carolina have a culture that encourages educators and entrepreneurs to respond effectively to the growing demand for more educational options?
A recent study by the John Locke Foundation sought to answer those questions. Surveys were sent to private school leaders and educational entrepreneurs. The responses were instructive.
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The average private school that responded to the study was operating at 79% capacity. That means schools had an unused capacity of 21%. That figure is probably higher than what most expected. Considering, however, that most students who became new Opportunity Scholarship recipients were already in private schools, the numbers make sense. Still, unused capacity in the 20% range also comes with a significant loss of revenue. Over the long run, such numbers are not desirable or sustainable.
Despite excess capacity, private school leaders in North Carolina expressed a cautious optimism about expectations for enrollment growth. Ninety-two percent of respondents said in the next three years they expect demand for their school’s educational services either to “increase significantly” (50%) or to “increase slightly” (42%). When asked how concerned they are about their school’s seat/space capacity to meet new enrollment growth over the next three to five years, almost half of school leaders said they were “moderately concerned” (24%), “very concerned” (11%), or “extremely concerned” (13%).
So how will schools respond to these challenges? In the short run, more than half of the respondents said they planned on having new seats in the classroom (53%). Forty-seven percent said they would add new classrooms, and 39% said they would expand the campus in the next one to two years. When the horizon was expanded to the next three to five years, responses to the same questions were lower: expanding the campus (28%); adding new classrooms (19%) and building/moving a school (11%).
While those numbers might seem encouraging, there is a downside: Many schools have no plan for growth. When asked why, school leaders cited some of the usual challenges for staying put: lack of revenue or funding (67%), too much competition from other schools (45%), and lack of facilities and infrastructure (41%). The ability to grow school capacity will depend in part on moving schools from the “no plans for expansion” column to the “plan to expand” column.
While school leaders appear cautious about future expansion, entrepreneurs remain bullish. Sixty-eight percent of entrepreneurs surveyed said they are considering starting or expanding a school or educational program in North Carolina in the next year. Eighteen percent of respondents said they are considering starting or expanding a school or education program in the next two to three years, while just 13% said they have no plans to do so. Most entrepreneurs who said they plan to expand or start new educational ventures credit growing demand from families for alternative educational models and services.
While expansion is on the minds of many entrepreneurs, so too are the barriers to expansion. The major challenges cited by entrepreneurs include lack of revenue and funding, lack of facilities or infrastructure, and zoning and building regulations. Growing parental demand for more educational options has opened new education markets. The Opportunity Scholarship and the new federal tax credit scholarship program are instruments that will work to fuel an expansion in private school enrollment. Can school leaders and entrepreneurs respond effectively to the changing environment?
To do so, leaders and entrepreneurs must have access to funds, a reasonable regulatory climate, and reliable information about state programs to support private school education. When they do, policymakers and the public will know that young people in North Carolina will have every opportunity to find an educational option that suits their needs and abilities. And that’s good news for everyone.
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