Does a Swirl of Vouchers and Closures Represent a Spiral for Texas Schools?

As financial pressures force North Texas school districts to consider closing schools, public education advocates are sounding the alarm that vouchers could exacerbate the issue.

Last week, Keller ISD’s Citizens Bond Oversight and Long Range Planning Committees recommended closing four campuses before the start of the 2027-28 school year in a move expected to save at least $51.6 million. The district’s enrollment has dropped by more than 4,000 students in the last four years, according to KISD demography reports, adding to financial strain in a state where funding is determined by the per-student allotment.

Three intermediate schools serving fifth- and sixth-grade students — Bear Creek, Parkwood Hill and Trinity Meadows — along with an elementary campus, Shady Grove, were recommended for closure. If approved by KISD trustees at a school board meeting later this month, an estimated 4,000 of the district’s 30,000 students will be affected by changes to feeder patterns and boundaries under the recommendation.

Keller would join a growing number of North Texas ISDs planning to close schools, as well as those that have already shuttered campuses. Fort Worth ISD will close 18 schools through 2028, while inner-ring suburbs like Richardson have already closed several campuses. Ahead of the 2025-2026 school year, Frisco ISD closed John Staley Middle School, and McKinney ISD plans to close three elementary schools ahead of the 2026-2027 school year. With Keller joining the fray, it’s clear that once-fast-growing outer-ring suburban school districts are now facing the same financial issues as the urban schools many of their families moved to avoid.

KISD Board of Trustees President John Birt said he has “no slant” on the closures yet as he wants to study plans further. But he also doesn’t think they can be avoided.

“I don’t think there’s a way, in the financial situation that Keller ISD and other districts find themselves, to avoid where we’re at,” Birt said. “Many of our campuses are underutilized, yet we have the same operational costs associated with them as if they were fully occupied. And so I don’t see any way for this district to put itself on a financial path forward and a stable path forward that we do that without making the adjustments we’re having to make.”

With continued enrollment declines forecast by demographers, Keller ISD could lose $34 million by the 2029-2030 school year. Birt called it a “difficult place to be,” citing the demographic slide and a lack of state funding as the main drivers of the district’s financial situation. 

Vouchers and State Funding

During the 89th Texas Legislative Session, lawmakers advanced a $8.5 billion funding package for public schools with the passage of House Bill 2. The legislation included the first per-student funding increase — an additional $55 per student — since 2019. But Texas still trails the national per-pupil funding average by roughly $4,000, according to the Texas State Teachers’ Association, and the bill includes strict requirements on how the funds can be spent.

“Despite what the state says, we got an increase in the basic allotment of $55, and that nowhere covers the inflationary costs that not only KISD has incurred, but virtually every other school district in Texas,” Birt said.

Texas Gov. Greg Abbott’s signature on HB 2 and the attached funding were contingent on lawmakers’ passage of another, far more controversial bill that had been a yearslong goal for the three-term chief executive. Senate Bill 2, which became state law in May, established a voucher system with education savings accounts (ESA) under which families can apply for approximately $10,000 in taxpayer dollars for private school tuition. Home school families can receive up to $2,000 for expenses.

The program takes effect in fall 2026. SB 2 appropriated more than $1 billion in funding for its rollout in the 2026-2027 school year. Applications for education savings accounts closed on March 31, with the state comptroller’s office reporting over 270,000 applications received. Over 250,000 were determined eligible for ESAs, of whom 90,000 to 100,000 are expected to be approved. 

A lottery system will select applicants in tiers, with weight given to low-income and special-needs applicants, lawmakers have said. Still, data shows that most applicants already attend private schools, and white students are largely overrepresented in applications.

Advocates for voucher programs have argued that public schools have failed students, especially since COVID-19 lockdowns, and that ESAs will give parents greater choice over their children’s education.

“When I ran for re-election in 2022, I promised Texans that we will bring education freedom to every Texas family,” said Governor Abbott. “Today, Texas delivers on that promise. I am signing this law that will ensure Texas families, whose children can no longer be served by the public school assigned to them, have the choice to take their money and find the school that is right for them.”

Opponents of the bill say that the bill hands education over to unregulated private schools that don’t have to follow state-set curriculum requirements, subsidizes wealthy families (SB 2 does not provide for an income cap) and jeopardizes public school funding at a time when districts are struggling.

“Remember this day next time a school closes in your neighborhood,” state Rep. James Talarico said when the state legislature passed vouchers in 2025.

Demographics Drive Closures

Districts’ financial woes largely come down to a single factor: enrollment. In the 2026 school year, statewide enrollment fell below five million students, the first decline since the COVID-19 pandemic, translating to the year-over-year (YOY) loss of over 76,000 students, according to TEA data analyzed by Texas 2036.

According to another analysis of TEA data led by the Texas A&M Private Enterprise Center, more than half of Texas’ 1,000 school districts have seen enrollment declines in the last decade.

The trend is driven by declines in birth rates first observed nationwide in the early 2000s, said Carrie Hahnel, a senior associate partner at education research nonprofit Bellwether. While birthrates didn’t begin declining in Texas until around 2008, the declines are starting to catch up to school districts as elementary schools are the first to land on the chopping block, she said.

“Although those declines are starting to move through the middle school and high school years as well,” Hahnel said. “But there’s also the additional factor of migration and immigration.”

The ongoing crackdown on immigration in the U.S. has partly helped fuel enrollment trends in Texas, she said. Along with drop-offs in early education, the loss of Hispanic students accounted for 80% of the YOY enrollment decline seen in 2025-2026, according to the Texas 2036 data.

Domestic migration trends have also added to urban districts’ troubles. More and more families are moving to relatively cheaper suburban real estate in fast-growing school districts.

“We are seeing migration outside of the core urban areas into the suburbs,” Hahnel said. “So even in states that have a steady population or a rising population, like Texas, there are changes in where people are living, and so that is affecting some of the larger school districts that have historically had large concentrations of students in places like Dallas, Fort Worth you’re seeing more and more movement out to the suburbs.”

In 2025, Fort Worth ISD announced it would close 18 schools — most of them elementary campuses — by 2029 in a move expected to save $77 million over five years. The district has lost nearly 13,000 students since 2019 and expects a further decline of at least 6,500 by 2030, as previously reported by The Fort Worth Report.

Along with stagnant state funding and enrollment trends, Hahnel also said the depletion of COVID-19-era federal relief funds has driven closures.

And when schools close, she said, students are often the hardest-hit by the consequences.

“The research does suggest that there is an initial and short-term negative impact on academic achievement when they close schools,” Hahnel said. “So students are displaced from their home schools. They’re reassigned to what people often call welcoming schools, and that often does lead to a one to three-year decline in performance for those students. It can also affect the students who are in that welcoming school. So the disruption is not just for the student who’s being moved, but for the students who are in a place that’s experiencing a lot of change.”

According to a 2024 study led by a University of Houston PhD student that analyzed data from 450 Texas public schools, short-term declines in test scores and persistent behavioral issues were reported among students who had been moved to other campuses during their K-12 education.  Those students were also 4.8 percent less likely to have attended college by the age of 26 than their peers unaffected by closures.

Hahnel said most districts ultimately cannot avoid closures and that, when ineffectively implemented, families may start asking tough questions.

“When managed well, closures and consolidations can be a good way of a district maintaining fiscal solvency and reducing its footprint to better match its student population,” Hahnel said. “There’s no reason that closures can’t support stability. However, in the short term, they are often disruptive, and if not managed well, they can also contribute to tension and distrust in the community, which can lead to further opt-outs.”

Pains Hit the ‘Burbs

The strain on ISDs in urban centers like Fort Worth and Dallas, where DISD has so far avoided mass shutterings despite a nearly $100 million budget deficit in 2025-2026, is starting to be felt by outer-ring competitors. 

Bob Templeton, a longtime education demographer working with the Fast Growth Schools Coalition, which represents a consortium of outer-ring suburban districts in Texas, said birth-rate declines are starting to be felt in these areas. Construction costs and interest rates have also made buying homes within the districts’ boundaries, still cheaper than in urban areas but less so than in previous years, more difficult for families, he said.

“The affordability issue is why it’s kind of the perfect storm. It’s a little bit of the birth rates, it’s a little bit of this housing dilemma, and it’s the expansion of choice,” Templeton said. “And so when you put those things together, it really does put school districts in a very difficult position, because they are not seeing the normal growth patterns that they would have experienced.”

Templeton also said many families in these districts have leaned toward homeschooling and non-conventional education models like microschooling, further exacerbating enrollment declines. Microschools typically have enrollments of less than 100 and operate in homes, strip malls or small businesses, with 100 such entities currently operating in Texas, according to prior reporting by the San Antonio Express News.

The nontraditional schools straddle the line between homeschooling and private schools, and aren’t eligible for the full $10,000 ESA allotment, although they can receive homeschool ESA dollars, he said. Certain groups, such as the National Microschooling Association, have pushed for newer, “next generation” accreditation frameworks for the model, the popularity of which has been driven, in part, by voucher programs.

“This is where we’re going to need legislative help as to how can we fund education so that it’s not tied to this traditional number of minutes and a school day that looks like X, because a lot of a significant number of families are wanting this different approach that gives them more flexibility,” Templeton said.

Greg Smith, the president of the Fast Growth School Coalition, said there are still districts experiencing growth. Forney ISD added over 5,000 students from the 2018-2019 to 2023-2024 school years, according to TEA data, while Prosper ISD opened five new campuses at the start of the school year. 

Smith said recent trends could discourage even still-growing districts from overextending themselves.

“I think it also will also give districts pause to make sure that they’re not overbuilding,” Smith said. “Then I know that there are several districts out there that say ‘I’m still growing, all right, but I’m not growing as fast.’”

According to Forney ISD’s demography report, although enrollment has surged to over 18,500 students as of June 2025, growth has slowed more than expected due to uncertainty in the housing market, which has slowed development within district boundaries.

Smith said that even if districts face tough financial decisions, there is hope they can evolve sustainably with nontraditional school weeks or other models, especially if they engage with the community and “bring parents along.”

Both he and Templeton agreed that vouchers and the interest they generate among public school families will be worth monitoring as closures mount. More families are looking beyond public schools for their children’s educational needs, and in districts that have experienced disruption, such as Keller, application numbers show strong interest in ESAs.

Despite being the 45th-largest district by enrollment in the state, residents within Keller ISD’s boundaries applied for ESAs at disproportionately high rates, with 2,542 applications filed, according to state comptroller data. Keller ISD residents have shown greater interest, as shown by applications filed, in ESAs than residents in all but 21 districts across the state. Families in El Paso ISD, a district with close to 16,000 more enrolled students, filed close to 400 fewer ESA applications.

Templeton pointed to the controversial, failed plan to split Keller ISD as part of what has led to disillusionment in Keller. In 2025, members of the school board announced a plan to create a new district, Alliance ISD, which would have split the district along lines some said were largely based on income, with little resident input. Officials eventually scrapped the plan, although resident mistrust has lingered.

Trustees argued that the split would provide fiscal relief at a time when the district was facing a $12.4 million deficit. Again, they cited fewer students and inadequate state funding as drivers behind the deficit. Closures, one of the most visible signs of a district’s financial troubles, have been discussed since at least spring 2025 — well before applications for vouchers opened in Feb. 2026.

“Sometimes there’s the unintended consequences of closing these schools because of a deficit,” Templeton said. “These families are pretty connected to these schools, so then that creates an unintended consequence, where these families then, if they close my school, then I’m going to apply for a voucher. And so I think there is a piece to that that could be happening.”

Schools Considering/Planning to Close Schools Compared to ESA Applications

• Keller ISD: Considering closing three intermediate schools and one elementary campus, 30,486 students enrolled (No. 45), 2,542 applications filed (No. 22)
• McKinney ISD: Closing three elementary schools ahead of 2026-2027 school year, 23,823 students (No. 58), 1,824 applications filed (No. 34)
• Fort Worth ISD: Closing 18 campuses by 2029, 67,491 students enrolled (No. 10), 4,803 applications filed (No. 10)
• Grapevine-Colleyville ISD: Closing two elementary schools after the 2025-2026 school year, 13,380 students enrolled (No. 96), 1,020 applications filed (No. 70)

School Choice?

Josh Cowen, a professor of education policy at Michigan State University, has been vocal in his criticism of voucher programs across the U.S. He said voucher programs have created financial difficulties and harmed academic outcomes in states like Arizona. 

“Arizona, two years ago, had to borrow against its state opioid settlement to pay for its corrections budget,” Cowen said. “It’s jails and prisons and things, because the voucher program was consuming such a big amount of money in the state budget that they didn’t have enough money to fund their corrections budget, so they borrowed against the state’s opioid settlement.”

“However you want to cut it, a billion dollars, just as a baseline this year in Texas alone, is coming from somewhere. And just last year, it was being paid by private sector parents. So it’s a new cost to states, and states can’t afford to fund two sectors of education.”

He also challenged the notion of school choice, saying that private schools accepting taxpayer money aren’t required to modify their admissions policies to allow broader access.

“Without requiring private schools to accept all students, you really aren’t able to avoid all the problems. It will continue to be a program that generally benefits students who are going to private school anyway, or who are going to go to private school anyway. And that’s just what we need to just call it that. And, you know, I’ve gotten to the point where I just say, ‘Listen, you guys created an interest group subsidy for existing private school kids.'”

Roughly 75% of families applying for vouchers homeschooled or sent their children to private schools in the 2024-2025 school year.

While school choice may currently play a small role in schools’ difficulties, Cowen said the larger issue is that funding for voucher programs essentially takes money away from public schools and will keep states from offering meaningful relief. Without relief, he said, school districts will remain in financial distress, and families could have to consider other options for their children’s education, leading to further enrollment declines.

“The ESA is really going to hamstring any state’s ability to help out long term. Individual families are going to have to make hard choices. If their district is just completely decimated and the only option is to use an ESA for a local private school that’s created itself two years ago, the parent has no idea if it’s any good or not, but it’s the only school there,” Cowen said.