This article appeared as "Market Forces" in the Fall 2022 issue of Independent School.
1. The fertility rate has fallen to a new low.
In 2020, fertility rates maintained the downward trajectory the country has seen since 2008. The number of births in 2020 (3,613,647) was the lowest since 1980, according to the Centers for Disease Control and Prevention. Also in 2020, the total fertility rate for the United States fell to 1.64 births per woman, down 4.1% from 2019. That is below the replacement rate of 2.1, the rate at which a population replaces itself from one generation to the next without immigration. (Full data from 2021 aren’t yet available. Births did show a small uptick in mid-2021, defying fears of a pandemic-induced “baby bust.” But there’s little to indicate that the long-term birth decline will reverse.)
Compounding the challenges for schools: record-low net immigration from abroad and continuing population shifts within the United States, away from major metro areas and from northern to southern states.
What is the impact of these trends on the student population? U.S. Census data for 2009, 2014, and 2019 clearly depict a downward trend in the population of children, driven mainly by the decline in the number of children under 5 years old. This age group plunged by 6.8% during the period 2009 to 2019, the largest fall during these years. All age groups except children 10–14 declined during that 10-year period.
STRATEGIC QUESTION: How has your school’s enrollment been affected in recent years by the number of children in various age groups in your area? How are you addressing related challenges?
2. Yield held steady nationally in the early part of the pandemic.
During the first year of the pandemic, families across the country were about as likely as they have been in the past decade to accept schools’ offers of admission. NAIS member schools saw yield rates hold steady between 2011–2012 and 2020–2021, without a significant change through the pandemic. The average yield rate for NAIS schools in 2020–2021 was 70.8%, about the same as the pre-pandemic average (70.3%).
Among day schools, the 72.3% yield rate in 2020–2021 was slightly better than in all but one of the previous five years. Boarding-day schools, which typically see lower yield rates than day schools, experienced their highest yield rate in 2020–2021 since 2015–2016.
Schools in the Southeast and Southwest saw notable gains in yield rates. The Southeast was the only region with a change greater than 2 percentage points (78.4% in 2020–2021 versus 76.2% pre-pandemic). The Southwest followed with an increase of 1.6 percentage points in 2020–2021 versus its pre-pandemic average.
The five metro areas where schools saw the largest increase in yield in 2020–2021 compared to their pre-pandemic averages were Miami, Charlotte, Baltimore, Dallas, and Atlanta. Schools in Miami saw the highest yield rate in 2020–2021 of all metro areas studied (89.7%).
The five metro areas with the largest decrease were San Francisco, Stamford, Houston, Washington, DC, and Seattle. San Francisco was the only metro area to report a median yield of below 60%—significantly lower than the city’s decade-high of 70.1% in 2014–2015.
STRATEGIC QUESTIONS: How did the pandemic strengthen or weaken your value proposition? What positive trends can you leverage to bolster yield? What negative trends have you seen that need attention?
3. Median enrollment in independent schools has rebounded, exceeding pre-pandemic levels.
From the pandemic’s beginning in early 2020 throughout the following school year many independent schools struggled to maintain their enrollment. Almost three in 10 schools lost 10% or more of their students. Were these losses part of a larger shift away from private education? Or were they a temporary response to the pandemic?
Analyses of NAIS enrollment data suggest that for many schools, the steep declines were temporary. In the 2021–2022 school year, the median number of independent school students per school was significantly higher than in 2020–2021: 396 versus 378. Sixty percent of schools reported higher enrollment in 2021–2022 than in 2017–2018.
When viewed over that five-year period, the enrollment picture is clearly different at different schools. Median enrollment for day schools and coed schools increased between 2017–2018 and 2021–2022; median enrollment fell at boarding schools and single-sex schools. Smaller schools struggled more than large ones. Schools in metropolitan areas as diverse as Miami, Denver, and Charlotte experienced large enrollment increases. And schools in Chicago, Baltimore, and New York saw the largest decreases over the same period.
Nevertheless, rebounding enrollment in the 2021–2022 school year, and early signs of healthy enrollment in 2022–2023, offer reason for optimism that independent schools will continue to play an important role in supporting students and their families.
STRATEGIC QUESTIONS: How has your school’s enrollment and retention changed since the pandemic began? Have families who joined your school because of COVID-19 reenrolled? If not, what factors drove their departure?
4. Overall enrollment growth in 2021-2022 was driven by the recovery in pre-K to third grade.
In 2020–2021, total enrollment fell in almost every single grade. Then, in 2021–2022, total enrollment increased in every grade except 11th. Leading this recovery was enrollment growth in the lower grade levels. Prekindergarten saw a 21.3% increase compared to a decline of 12.1% the previous year. All of the lower grades from kindergarten through third grade reported enrollment increases that were larger than the growth observed for all grades.
What could explain such a dramatic turnaround, especially since the demographic outlook appears so unfavorable in the early grades?
Researchers are still examining the effects of the pandemic. But as it continued to disrupt K–12 education in 2021–2022, preliminary information indicates that parents increasingly sought out schools that were fully in person rather than remote. Given the greater autonomy of independent schools, they had more flexibility to reopen. The implementation of COVID-19 safety protocols, larger and more spread-out campuses, and smaller class size may have also given parents some assurance that their children would be safer in an independent school environment.
The safety factor would have been especially important for parents of young children, since no vaccines were available for children under 5 and the vaccine for 5- to 11-year-olds did not become available until late 2021. Sending their kids to school meant that parents could go to work themselves or work at home without having to monitor their children’s remote schooling.
STRATEGIC QUESTION: How has enrollment at your school changed by grade level, specifically for lower grades? Which other specific divisions or grade levels need extra attention to ensure steady enrollment in the short and long term?
5. International student enrollments have dropped, leading schools to evolve their recruitment and retention strategies.
At all levels of education in the United States, the pandemic accelerated a decline in international student enrollment that had begun a few years earlier.
Higher education institutions saw new international undergraduate enrollment drop by 42% between 2015-2016 (the peak year) and 2020–2021.
Among all K-12 schools, the population of international students on F-1 visas fell 41.5% between calendar years 2018 and 2021. The total number of students from China—long the top source of international students—dropped by nearly two-thirds between 2018 and 2021.
For NAIS member schools, the effect of the pandemic was similar. Among schools responding to an April 2022 NAIS popup survey, 60.6% indicated that fewer international students enrolled in the 2021–2022 school year than in 2019–2020. The decline in the number of Chinese students was notable, with 58.6% of schools reporting fewer students from China.
This shifting landscape has led to an evolution in recruitment and retention strategies. Some independent schools have increased their use of agents, and many have boosted word-of-mouth and social media marketing to engage prospects who cannot visit in person.
In addition, some schools have increased services to support the academic, health, and well-being needs of international students during the pandemic.
STRATEGIC QUESTIONS: How can you adapt your international recruitment strategies to a radically changed market? What are the implications for your school’s student experience and your budget?