The report shows half of the 100 largest school districts have seen enrollment decrease from 2005 through 2010, with some districts experiencing declines of as much as 33 percent. "Overcoming the challenges created by declining enrollment can be enormously difficult," says Puckett, who leads BCG's Global Education practice.

The report identifies eight actions districts can take:

Understand and manage classroom costs; know how classroom resources are allocated by school, grade, and course;
Plan in advance and take action early; create and act on a multiyear plan for the district's finances;
Retain the best talent; ensure the best teachers remain;
Close severely underutilized schools, no matter how difficult, to help schools and students gain access to more resources;
Enable creative staffing and teaching with technology; employ computer-based scheduling tools and provide online and blended learning opportunities;
Shrink fixed costs and convert to variable costs; focus on factors directly related to student achievement;
Build a shared-service capability by collaborating with charter and other school operators; and
Manage charter schools as an investment and share costs fairly.

There are many challenges to managing in the current environment, the report finds. Instead of turning to unsustainable measures or those that adversely impact students, districts can plan for change and look for ways to both manage costs and preserve a higher-quality learning experience for students. In addition, the responsibility for managing the challenges is not limited to school administrators—policymakers should play a role.

School Days: BCG Advises Urban Districts on Fiscally Fit Strategies

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