Unfortunately, coping with vanishing demand is a classic problem in the private sector. One day, everyone is going to Blockbuster to rent their movies and Borders to buy their books. The next day, Netflix and Amazon have made the old brick-and-mortar store models obsolete. Blockbuster and Borders are left to cope with a dwindling customer base and are no longer able to justify their monthly rent.

The same thing is happening in public education – Half of the 100 largest U.S. school districts have experienced enrollment declines from 2005 to 2010, so it’s quite a widespread problem. BCG (full disclose: I am a consultant at BCG) recently released a report (informed by our work in multiple school districts) outlining key challenges and identifying eight actions districts can take to manage costs without jeopardizing education quality.

I found the article to be an interesting read, and would be interested in hearing what others think of the approach.

Article Link: https://www.bcgperspectives.com/content/articles/education_public_sector_adapting_enrollment_declines_urban_school_systems/

Here are some article cliff-notes (if you’re busy):

5 key challenges that drive districts to pursue unsustainable (and potentially toxic) budget-balancing measures:

• Unrecovered classroom costs
• Higher fixed school-level costs
• Sticky central-office costs
• A more expensive student mix
• Lack of an advanced-planning ethic.

8 actions districts can take to find a fiscally sustainable and educationally sound path:

• Understand and manage classroom costs; know how classroom resources are allocated by school, grade, and course. 
• Plan in advance and take action early; create and act on a multiyear plan for the district’s finances. 
• Retain the best talent; ensure the best teachers remain in the classroom. 
• Close severely underutilized schools, no matter how difficult it may be, to help schools and students gain access to more resources. 
• Enable creative staffing and teaching with technology; employ computer-based scheduling tools and provide online and blended learning opportunities. 
• Shrink fixed costs and convert to variable costs; focus on factors directly related to student achievement. 
• Build a shared-service capability by collaborating with charter and other school operators. 
• Manage charter schools as an investment and share costs fairly.