My research revealed a mix of unsettling and encouraging trends: A substantial portion of smaller NAIS-member schools showed high declines of enrollment from 2007-2016 — meaning that their schools’ enrollments dropped at least 10 percent. These declines appeared to stabilize when schools had more than 350 students enrolled for each year across that 10-year period. At the same time, a large percentage of schools at or below that 350-student threshold experienced high-growth rates. I decided to delve into data for just those schools whose enrollments did not climb above 350 students in this period, and I detail this research below.
NAIS Membership by School Size: The Tails are Growing
Over the past 15 years (2002-2017), NAIS has experienced an increase in the number of very small and very large schools in its membership, according to DASL.
- The number of schools with 200 or fewer students has grown by 30 percent.
- The number of schools that have between 201 and 300 students has grown by 22 percent.
- The number of schools with 700 or more students has grown by 22 percent.
Exploring High-Growth and High-Decline Schools by School Size
Our analysis from the 2016-2017 Trendbook showed that the high-decline schools — declining at least 10 percent from 2006-07 to 2015-16 — are disproportionately small. In contrast, nearly a third of high- growth schools — growing at least 10 percent in the same time frame — have more than 700 students currently enrolled.
If a school is considered high-decline, it is likely to be small, as the chart below shows. If the school is considered high-growth, it could be very large or very small. Thus, large schools appear to be able to ward off decline, possibly because of their large student bodies.
Stabilizing at 350 Students?
To analyze enrollment declines over the past decade, I created a new variable that looks at enrollment cap counts for schools between 2007 and 2016. My methodology went like this: If a school never reached the 200-student mark in that time, but came close, I set that school’s enrollment cap at 200. The most common enrollment cap count was 500 students (13 percent of the sample), followed by a cap of 600 students (11 percent). The majority of the schools in the sample (64 percent) fell between an enrollment cap of 300 and 800 students.
At enrollment levels of 350 students and below, between 25 percent and 33 percent of schools were considered high-decline. The percent of schools that had experienced high enrollment decline from 2007-2016 was larger for enrollment caps of 250 to 350 students compared with enrollment caps below 250. High-growth schools make up a larger proportion of schools compared with high-decline schools when the enrollment cap is set at 200, 800 students, and 1,200 students.
However, these small enrollment cap groups had small sample sizes so we must be careful when drawing conclusions.
The Financial Picture
Carrying the knowledge that many schools with fewer than 350 students fall into either the high-decline or high-growth enrollment categories, I sought to explore if financial metrics — tuition, financial aid, operating expenses, and endowment — shed light on these schools’ divergent enrollment patterns.
Let’s start with tuition and financial aid, again focusing on high-decline and high-growth schools with an enrollment cap of 350 students or less. First, I explored the median average weighted tuition. This figure comes from the tuition for all included grades but factors in the number of students in each grade. I concentrated on the median dollar amount because I was looking at a large number of schools. And I found that for grades K-12, the median average weighted tuition for both tuition and fees was almost identical between the high-decline and high-growth schools. So generally, these schools were charging similar amounts over time.
While tuition remained similar, the amount of financial aid dollars awarded per student was consistently higher for high-decline schools from 2010-2016. Note that this looks at total dollars awarded to students at the school divided by enrollment. For high-decline schools, the median financial aid award amount per student shot up from $2,011 in 2007 to $4,010 in 2016, marking a 99 percent change. In contrast, the median financial aid total award amount for high-growth schools climbed from $2,437 in 2007 to $2,961 in 2016, marking a 21 percent change.
For high-decline schools at or below the 350-enrollment cap count, financial aid per student nearly doubled over these 10 years, whereas financial aid per student grew very slowly in high-growth schools. Here’s another way to think about the difference: The average annual growth rate in financial aid dollars per student was 8 percent in high-decline schools vs. 3 percent in high-growth schools. It’s possible that starting in 2010, high-decline schools boosted their financial aid giving to thwart attrition or increase the number of newly enrolled students. However, it appears that this strategy did not boost enrollment.
Given the tuition and financial aid trends of high-growth and high-decline schools, it may not be surprising that net-tuition revenue was lower for high-decline schools. From 2007 to 2016, median net tuition per student revenue grew 15 percent for high-decline schools in the sample compared with 31 percent for high-growth schools. The average annual growth of net-tuition revenue in high-decline schools was 2 percent vs. 3 percent in high-growth schools. So slowly, over the decade, the median net revenue per student widened by about $2,100 per student.
When I examined small schools’ operating expenses, I discovered little difference between high-decline and high-growth schools in total operating expenses per student. High-decline schools experienced a 56 percent increase in median total operating expenses per student from 2007 to 2016, while high-growth schools experienced a 35 percent increase during that same period. Much of that gap stems from the differences as the decade began ($15,623 per student in high-decline schools vs. $18,787 per student in high-growth schools). I found that the average annual growth of total expenses was 5 percent for high-decline schools compared with 4 percent for high-growth schools.
A much starker picture emerged when examining school endowments. I focused on overall endowment as opposed to endowment per student because the student count could convey that endowment varies more than it actually does. From 2007-2016, high-growth schools grew their endowments substantially compared with high-decline schools. The median endowment skyrocketed 210 percent for high-growth schools and increased 38 percent for high-decline schools during these 10 years.
A Review of Key Findings
It’s evident that over time, more schools under the NAIS umbrella will be relatively small in size. In addition, a substantial portion of smaller schools in the NAIS-member base showed high declines in enrollment between 2007 and 2016. There appears to be a threshold at a cap of about 350 students in which a smaller percentage of the schools experienced high enrollment decline during those 10 years. Yet a high percentage of schools at or below that 350-student threshold experienced high enrollment growth.
The financial metrics show that the high-decline smaller schools generally have experienced more growth in financial aid giving per student and little growth in endowment. Conversely, high enrollment growth schools of that size have lower financial aid per student increases over time, steeper rise in net-tuition revenue, and much steeper growth in endowment.
It's important to note that providing more financial aid did not automatically lead to higher enrollment numbers. In fact, it might be just the opposite: Financial aid didn’t appear to be a very effective strategy for reversing declining enrollment trends. This corroborates our findings from the 2016-2017 Trendbook, which showed that financial aid was not a differentiating factor in such trends. In that sample, we did not restrict our data based on school size. That research found that both high-decline and high-growth schools doubled the total amount of their financial aid dollars awarded between 2007 and 2016, and still enrollment disparities existed.
What Are Your Experiences?
School leaders’ experiences will inform NAIS’s future research on school size and enrollment patterns. To that end, we’re asking several questions:
- What is your enrollment cap number, or the enrollment number your school has stayed just below for the past 10 years?
- What kind of enrollment pattern is your school experiencing?
- What changes have you seen in your endowment?
- How has your financial aid allocation per student changed in the past several years?
- Are you intentionally staying at a certain enrollment count?
- Are you trying to grow to a certain number?
- Have you experienced any stabilizing experience at the 350-student mark?