Across the country, school districts—particularly large, urban districts—are reporting drops in enrollment, as families opt for alternatives or struggle to access or navigate virtual learning. These enrollment declines have raised important concerns about how and whether the students missing from school rolls are learning, but they could also have implications for school funding.

The consequences of declining enrollment for district funding levels will depend on which students are not in class. It’s possible, for example, that low-income students who have left school to work or care for a younger sibling, don’t have access to the technology needed to enroll in and attend virtual school or that their families fear the health effects of attending school in person. It’s also possible that some higher-income students are not enrolled this year because their families are opting for homeschooling, “learning pods,” or private school. What’s not clear yet is whether the majority of unenrolled students are low-income or high-income and how this varies by district.

Whether unenrolled students are low or high income matters for two reasons. First, larger enrollment or attendance declines in high-poverty districts means that aggregate funding could decline more for these districts. Second, many states allocate additional funding per student to districts based on district shares of low-income students. If mostly low-income students have not enrolled, the poverty rates in those districts may be artificially low, and districts could receive less per student funding. Should unenrolled students return for the 2021–22 school year, districts could find they lack the resources to adequately serve their populations of students. This pattern could exacerbate inequities between low-income and high-income districts and thwart states’ attempts to make school funding progressive.

Read the full article about low enrollment in schools during COVID-19 by Victoria Lee, Emily Gutierrez, and Kristin Blagg at Urban Institute.