Demographic shifts — falling birth rates, fewer immigrant arrivals, and families priced out of cities — are driving this change. Nationally, enrollment is expected to decline by about 0.5% per year, though some large urban districts face far steeper drops. Colorado is expected to be one of the hardest hit states.

For years, federal pandemic dollars masked the financial strain, allowing districts to maintain and even increase staffing as student counts fell. Now that those dollars are gone, districts are confronting the inevitable: too many schools, too many employees, and not enough students to support them.

Because labor costs make up 80–90% of school budgets, staffing reductions are unavoidable.

Graph Source: Dr. Roza’s Presentation at the PIE National Summit 2025. Data available at: Staffing & Enrollment Trends – Edunomics Lab

Dr. Roza warns that how districts reduce costs matters enormously. Attrition, for instance, might seem like the easiest approach — waiting for natural retirements or resignations — but it’s uneven. Districts often end up with too few math or special education teachers, while maintaining surplus positions in less critical areas. Early retirement incentives are another common tactic, but Roza cautions that they’re often inefficient, paying people not to work and sometimes pushing out top-performing educators when they’re needed most.

Instead, she argues, districts should focus on building a smaller but stronger workforce, anchored by their most effective teachers and focused on classroom instruction. This could require sending expert teachers who were promoted to specialist positions (interventionists, coaches) back to the classroom. It also means getting serious about targeting layoffs to the most ineffective staff.

“Putting students at the forefront means exiting the least effective employees and holding on to the top performers.”

– Marguerite Roza, Here Comes the “Big Shrink”

The conversation about The Big Shrink isn’t just about staffing — it’s also about schools themselves. With fewer students, many districts will have to consider closing building if they haven’t yet. Colorado’s largest two districts–Jefferson County and Denver–have already closed over two dozen schools collectively (more on that below).

In The 74 Million, Dr. Roza and co-author Aashish Dhammani explain the financial logic: “Closing three schools can save the costs of three principals, three librarians, three nurses, and even some teaching positions where students can fill empty seats elsewhere.” Their analysis at Edunomics Lab, shows that closing 1 out of every 15 under-enrolled schools saves about 4% of a district’s budget, largely in labor costs.

In addition to saving money, closures protect equity. Maintaining a network of half-empty schools drains resources from every other school in the district.

“It’s like having a fixed amount of frosting while trying to cover too many cupcakes. In the end, all the cupcakes end up with less frosting.”

– Dr. Marguerite Roza & Aashish Dhammani, The Math of School Closures

In practice, that means fewer electives, AP courses, and enrichment opportunities across the district. Of course, Dr. Roza cautions that closure decisions shouldn’t hinge on finances alone. Districts should also consider whether small schools are delivering strong results or operating efficiently. A small school that achieves high outcomes with creative staffing — say, a principal who also teaches or a blended-grade model — may be worth preserving.

The key is to align cost, efficiency, and student outcomes in every decision. As the graph below shows, if districts are strategic, they can end up shifting students from high cost schools with poor outcomes to schools that have better outcomes and lower costs.

Graph: Colorado’s high-poverty elementary schools, reading proficiency vs per-pupil cost

Graph Source: Edunomics Lab

Jefferson County

Jeffco Public Schools is Colorado’s second-largest district and has been facing steep declining enrollment for many years, resulting in the need to close schools. To right-size its system, Jeffco recently closed 16 elementary schools and two K-8 campuses.

The elementary schools that were closed had fewer than 220 students, buildings operating at less than 45% of capacity, and a nearby school within roughly three miles capable of absorbing displaced students. The elementary school closures saved roughly $12 million.

Even though the district did not explicitly include school academic achievement in its criteria for closure, the academic outcomes at the schools slated for closure were persistently low. In 2022, 14 of the 16 schools had fewer than half of students reading at or above grade level, and all schools had even worse math outcomes.

Jeffco paired each closing school with a “receiving” school in the same feeder pattern, ensuring that students could stay connected to familiar peers and teachers. Families could also use the school choice system to select a different school. Because there was no intentional focus on academic outcomes, half of the receiving schools were also chronically low-performing.
Two years later, some of the receiving elementary schools have rebounded academically while others continue to struggle. The schools that have seen their test scores increase post-consolidation may have benefitted from the influx in resources and support that comes with increased enrollment.

“We knew we were spending more money to support our small schools, but the amount of money was not leading to more robust programming.”

– Superintendent Tracy Dorland, Jeffco recommends closing 16 elementary schools

At under-enrolled schools, leaders reported being unable to fund full-time art, music, and physical education teachers, or bilingual specialists for dual-language learners. Post-consolidation, some of the receiving schools have seen their enrollment increase and now have the ability to bring robust programming back and better serve students academically.

In the long run, we hope that Jeffco will have stronger, better-resourced schools for the students who remain. But there remains a clear need for more focus on academic outcomes particularly for underserved students who were simply moved into other low performing schools.

Denver Public Schools

Denver Public Schools (DPS) offers another recent glimpse of The Big Shrink in action. In November 2024, the Denver school board voted unanimously to close or partially close 10 schools, eliminating nearly 4,000 vacant seats in those schools and saving an estimated $6.6 million. Some board members cited the inequity of subsidizing small schools with dwindling enrollments, amounting to more than $3.8 million in subsidies in 2024-25, which takes away resources from other schools.

“Operating schools with low enrollment is inequitable, unaffordable, and unsustainable.”

– DPS Board Member John Youngquist, Denver school closures: Board votes to shutter 7 schools, shrink 3 more

The closures were the result of a long, emotional and controversial process, one that – like Jeffco – did not explicitly take into consideration academic outcomes, although the schools that were ultimately closed had all been struggling academically in addition to being severely underenrolled.

In comparison to Jeffco, Denver had a painfully protracted process with many starts and stops that led to significant community pushback. But where Denver seems to have bested Jeffco is in the reassignment strategy. Instead of assigning each closing school to a single receiver, DPS offered displaced families top priority in the district’s choice process, ahead of siblings and staff children, and created new, expanded enrollment zones that included higher-performing school options.

The result according to district data and Chalkbeat reporting is noteworthy:

• 92% of affected students participated in the district’s school choice process, and 98% of those students received their first-choice placement.
• 50% will attend a higher-rated school next year; only 4% will attend a lower-rated one, with the remaining students attending a school with a similar rating to the school that was closed.
• 20% chose charter schools; over half those students will attend one of the Rocky Mountain Prep charter schools.

Even in an era where the DPS school board has been extremely hostile to school choice, Denver’s closure plan quietly achieved one of education reform’s key goals: shifting students from lower-performing schools to higher-performing schools while preserving a family’s right to choose the best learning environment for their child.

From Dr. Roza’s research and Colorado’s own examples, we can identify several areas of opportunity for state leadership as the Big Shrink continues to affect the state.

1. Colorado should support school districts with enrollment planning and ensure that all districts are engaging in multi-year budgeting and being flexible with current resources.
2. State demographers should partner with districts in communicating with families why the Big Shrink is happening. A presentation by a state demographer to the Jeffco community helped paint the picture for why school closures were necessary.
3. Above all, the state should be working with school districts to ensure that student outcomes are at the forefront of all staffing shifts and school closure decisions.

The Big Shrink isn’t a one-year budget hiccup. It’s a generational shift that demands courage, data, and a focus on outcomes. Districts that act now by aligning resources and making tough student-focused decisions will come out smaller, stronger and more equitable.

“The only question,” Dr. Roza reminds us, “is whether leaders will shrink in ways that degrade their school systems or do the hard work of seeking a smaller but more effective delivery model for the students they now serve.”

Colorado has the opportunity — and the responsibility — to choose the latter.