Report: Charter schools losing students to universal school choice

Charter schools in states with expansive school choice initiatives are losing students to those programs, and many of their leaders expect the losses to continue, according to a new survey from the American Enterprise Institute.

The report, released Aug. 19, surveyed 285 charter school leaders in Arizona, Florida, and Utah. All three states offer education savings accounts, or ESAs, that let families spend state dollars on private school tuition and other approved expenses.

North Carolina was not surveyed. But with a top-10 charter law — as recently ranked by the Center for Education Reform’s 2026 charter law rankings — and a universal voucher program entering its third year, it fits the profile of the states that were.

According to the new report, nearly half of charter leaders in Arizona said students had already left to use ESA funds. Arizona has the nation’s oldest universal ESA program. Fifty-eight percent of Arizona respondents expect ESAs to shrink their enrollment. In Florida, 28% said the same. In Utah, 32% did.

“We are losing students faster than we can get them in,” one Arizona charter leader told the researchers.

Some of these same charter leaders are even considering a switch. Thirty-eight percent of Arizona respondents and a quarter of Utah respondents said the ESA program made them more likely to open a private school or microschool instead.

Nearly two-thirds of charter leaders surveyed said they want relief from regulation and bureaucracy. Other priorities included funding equity and facilities support, cited by 58%, and special education and compliance relief, cited by 42%.

Report authors Ian Kingsbury of the Educational Freedom Institute and David T. Marshall of Auburn University write that charters are now “forced to compete against nimble, less-regulated ESA-funded providers while operating under heavier compliance and resource constraints than traditional districts are.”

That dynamic may already be taking shape in North Carolina. Lawmakers removed income limits on Opportunity Scholarships in 2023, and in the second year of universal eligibility, private schools added 8,260 students and 67 schools, the largest one-year jump in school count in more than four decades, as Carolina Journal reported in July. Charter schools added roughly 4,500 students.

Daniel Buck, director of the AEI network that produced the report, said the findings point to a larger question than enrollment. In an Aug. 20 commentary for the Thomas B. Fordham Institute, Buck asked whether charter schools still have a place in a universal choice landscape.

“Should charter schools even continue to exist? Or should reformers let creative destruction work and replace an antiquated model with the new era of ESAs? … If the sector dies with a whimper, those within it suggest that it will come through overregulation, not its own failures,” Buck wrote.

The pressure is unlikely to ease. Beginning in 2027, the new federal Education Freedom Tax Credit, which North Carolina opted into in June over Gov. Josh Stein’s veto, will fund school choice opportunities through a second stream of money separate from Opportunity Scholarships, as Carolina Journal has reported.

The AEI survey drew responses from 285 of 1,068 charter leaders invited, a response rate of about 27%, between June 2025 and January 2026.

“Report: Charter schools losing students to universal school choice” was originally published on www.carolinajournal.com.