Declining birthrates and growing competition from school choice threaten public school enrollment counts — and therefore school district budgets. Student data privacy concerns are on the rise and only complicated by the explosive rise in artificial intelligence tools and usage. And administrators are continuing to adjust to new policy priorities for curriculum, staffing and more under the second Trump administration. These are but a few of the challenges facing public schools in 2026.
As we head into a new calendar year — and the second half of the 2025-26 school year — here are six trends for K-12 leaders to watch.
Education funding faces pressure from multiple directions
Education funding will face pressures on several fronts in 2026, including strained state coffers, unpredictability in federal funding and competition for local dollars.
Marguerite Roza, director of Edunomics Lab and a research professor at Georgetown University’s McCourt School of Public Policy, predicts flat but stable federal funding for schools in 2026.
Still, state and local education systems are bracing for more uncertainty when it comes to federal funding cycles, according to education researchers and professionals. Last summer, many states and districts were caught off guard when the Trump administration froze federal funding for multiple programs. Likewise, some states and districts worry about potential federal funding restrictions if their policies don’t align with the Trump administration’s priorities.
Roza said that while federal education funding in 2025 was “very drama-infused,” states were level-funded from the previous year, with allocations for Title I and the Individuals with Disabilities Education Act — the two largest pots of federal K-12 money — distributed to states as usual.
And since Congress did not finalize a fiscal year 2026 budget for the U.S. Education Department in 2025, all eyes will be on actions to be taken before the next appropriations deadline on Jan. 30.
At the state level, a fall 2025 fiscal survey from the National Association of State Budget Officers found that 23 states projected general fund spending to decline or remain flat in FY 2026 budgets compared to FY 2025 levels.
This has school systems jockeying for state dollars against other state-supported programs like healthcare and public safety. “If districts were hoping for some big new investment from the states, I would say, ‘This is not your year,’” Roza said.
At the local level, shifting public school enrollment will influence allocations for per-pupil spending, leading to less funding for districts with declining enrollments. That drop in revenue means school systems will need to make tough decisions on closing or consolidating schools and shrinking their workforce, Roza said.
Closing schools is “hard for communities,” and localities will likely approach this in a variety of ways in 2026, Roza said.
Competition for students heats up
Several factors influencing shifts in public school enrollment will continue into the new year, including a shrinking population of young children and a growth in private school choice programs.
The public school versus private school choice debate will intensify as more states launch voucher programs in the 2026-27 school year that use taxpayer dollars to fund private school tuition — and while a nationwide school choice program prepares for a 2027 launch.
Robert Enlow, president and CEO of EdChoice, a nonprofit research and school choice advocacy organization, predicts more families will choose options that aren’t necessarily their neighborhood public school.
“There’s no doubt that the demand for choice has continued since COVID,” Enlow said.
The number of students participating in state-led universal private school choice programs has grown from about 64,000 in 2022-23 to 1.3 million in 2024-25, according to EdChoice. Still, most students — about 49.6 million — attend public schools, based on fall 2022 numbers, the most recently available federal data.
The large population of public school students is why federal and state investments are needed for public schools, according to private school choice opponents. Vouchers leave public schools with fewer resources to meet the needs of their students, which contributes to equity gaps, they say.
Opponents also say that private school choice programs lack transparency and accountability.
“Voucher students lose most of their legal protections under special education and civil rights laws, and voucher programs use public dollars to fund private schools that can and do discriminate against students and employees in ways that are not lawful in public schools, said a Dec. 18 letter from Public Funds Public Schools, a nonprofit advocating for investments and support for public schools. The letter sent to the Internal Revenue Service was in response to calls for public comments ahead of formal rulemaking for the national private school choice program.
Enlow and others predict that some Democratic-led states will join Republican-led states in opting into the national school choice program, which will fund certain expenses for both public and public schools. Those expenses could include tuition and fees, books and supplies, tutoring, payments for services for students with disabilities, computer equipment and internet, and transportation.
“Any traditional public school that says they can’t afford computers or transportation is not thinking how this program could help them,” Enlow said.
District leaders will navigate more teacher layoffs, retention challenges
As student enrollment in public schools is expected to continue declining, and thereby strain K-12 budgets in 2026, states and districts will have to “reimagine and redesign the teacher workforce” — looking at how to best use new technologies, what roles only teachers can fill, and “how to best attract, support and retain the most effective teacher workforce,” said Heather Peske, president of the National Council on Teacher Quality, in an email to K-12 Dive.
More staff layoffs are likely as dropping enrollment leads to deeper district budget cuts, Peske said. This will force district leaders to reckon with any “reduction in force” policies that ignore teacher performance, she added.
Peske also predicted that shrinking state and local K-12 budgets will create more opportunities for districts to consider differentiated pay models — which compensate certain educators more than others — to attract and retain teachers in high-need schools, subjects and regions.
Some K-12 researchers have said declining enrollment and related budget cuts, alongside mass pandemic-era hiring of teachers supported by federal emergency aid funds, have led to a reversal in widespread teacher shortages.
But Paige Shoemaker DeMio, senior analyst for K-12 education policy at the Center for American Progress, said she expects district budget cuts to strain working conditions for teachers and retention rates to drop. Tighter budgets will mean less funding to support teachers, and more responsibilities will be put on their plate, which in turn will increase teacher burnout and drive educators out of classrooms, she said.
Uncertainty to persist as federal changes continue
Districts in 2025 already felt the pressure to change their diversity, equity, inclusion and LGBTQ+ policies after the Trump administration cracked down on race-based and sex-based initiatives. In many instances, the administration has attempted to strong-arm states and districts into complying with its policies by threatening the loss of federal funding. That tactic, rarely used under other administrations, is likely to continue under this one in 2026, civil rights enforcement experts said.
The departments of Education and Justice, for example, have suggested continued use of stringent compliance methods to enforce Title IX and Title VI, which protect students from discrimination based, respectively, on sex and race.
Federal policies are also impacting immigration enforcement on or around school grounds, pushing districts to consider virtual learning options and to offer know-your-rights training or legal counsel for families. The aggressive enforcement has affected students’ attendance, performance and sense of safety, district leaders have said.
In 2026, the trickle-down from federal policies to districts and students will likely continue to impact school operations, said Sasha Pudelski, director of advocacy for AASA, The School Superintendents Association.
“For traditional federal funding and policy processes, it’s been challenging for superintendents to determine what the ‘new normal’ is, compared to a one-time aberration or one-off,” Pudelski said. That’s making planning and preparation difficult for district leaders, she added.
“School district leaders are facing mounting uncertainty and should brace for more in 2026,” Pudelski added.
States will take reins on achievement and absenteeism
The new year will see schools doubling down on supports to raise achievement and lower chronic absenteeism, according to education researchers, professionals and nonprofit organizations.
The stubbornness of low achievement rates — as indicated by last year’s release of 4th and 8th grade math and reading results from the 2024 National Assessment of Educational Progress — means there will be continued momentum to drive scores up, according to education experts.
States will take the helm on much of this work, said Nakia Towns, president of Accelerate, a nonprofit organization that conducts research and provides grants for learning interventions. Some of those efforts will include ensuring that the use of high-quality curriculum materials is driving desired student outcomes, she said.
To that end, Towns predicts states will take more leadership in guiding districts toward outcomes-based contracting for academic resources like tutoring and professional development. They’ll be looking at “which interventions get you the best bang for your buck,” she said.
To help raise achievement and drive up student engagement, schools and districts will home in on strategies to combat chronic absenteeism by expanding real-world educational experiences and opportunities like career and technical education courses, internships and STEAM offerings, according to education experts.
District and school leaders also will monitor whether 2025’s shift in prohibiting student cell phone use during the school day will move the needle on achievement.
Additionally, education experts are watching out for how federal influence will impact academics under the Trump administration. That includes, for example, how the U.S. Department of Education will react to states’ requests for waivers for accountability measures under the Every Student Succeeds Act, according to education professionals and stakeholders.
During a Sept. 18 panel discussion at the Reagan Institute Summit on Education in Washington, D.C., several education leaders said they were open to state assessment flexibilities from the federal government, but they predicted states will want to retain accountability standards.
“I think for a state, accountability and accountability systems might be the most important lever that we have to drive academic results for kids in systems and schools,” said Cade Brumley, Louisiana’s superintendent of education, during the discussion.
Work remains for AI literacy, guidance and online protections
In 2025, Congress increasingly debated and explored federal policy solutions for protecting children and teens online, especially as newer artificial intelligence tools rapidly became available. Jeremy Roschelle, co-executive director of learning sciences research at Digital Promise, said he expects to see more legislative action on student online privacy and safety, especially at the federal level, in 2026.
“We need it,” Roschelle said. “I think people have lived through social media and the harmful effects there can be for youth, and there’s lots to worry about as we get even more powerful tools.”
Pati Ruiz, director of learning technology research at Digital Promise, said she’s hopeful that in 2026 there will be a greater focus on prioritizing teachers input when implementing AI tools in classrooms. That means more lessons on AI literacy for educators will roll out to help instructors critically and appropriately use AI tools, she said.
With at least 32 states having already released their own AI guidance for schools, Ruiz predicts that even more states will continue to put out K-12 recommendations on these tools. Ruiz added that she expects some states will update and revise their initial AI education guidance to be more comprehensive and useful for districts and schools, especially involving their responsible technology use policies.