Why New Schools Struggle to Survive: Key Challenges Behind Closures and Mergers

Introduction

In recent years, many new schools have faced serious operational difficulties. Some have closed completely, while others have merged with larger or more stable institutions. This situation is not limited to one country; it is seen in many education systems around the world. New school operations are often affected by declining student enrollment, rising costs, competition, teacher shortages, changing family needs, and government regulations. These pressures make it difficult for newly established schools to survive, especially during their first few years of operation.

School closure or merger is usually not caused by one single problem. Instead, it is often the result of several connected challenges. For example, when enrollment is low, school income decreases. At the same time, schools still need to pay teachers, maintain buildings, buy learning materials, and meet government standards. If the school cannot manage these costs, it may be forced to merge with another institution or close. Therefore, understanding the reasons behind school closures and mergers is important for school owners, policymakers, parents, teachers, and communities.

This article discusses why new school operations close or merge in the current situation, the major challenges they face, and possible strategies to improve school sustainability.

1. Low Student Enrollment

One of the most common reasons new schools close or merge is low student enrollment. A school depends on students for its financial and academic survival. In private schools, tuition fees are the main source of income. In public or government-supported schools, funding may also depend on the number of enrolled students. When there are not enough students, the school may not have enough revenue to cover its costs.

New schools often struggle to attract students because they do not yet have a strong reputation. Parents usually prefer schools with proven academic results, experienced teachers, good facilities, and a history of student success. A newly opened school must work hard to build trust in the community. This process takes time, and during the early years, enrollment may remain below expectations.

In some areas, low enrollment is also caused by demographic changes. If the number of school-age children decreases because of lower birth rates, migration, or urban movement, schools may face a smaller student market. According to UNESCO, demographic changes and education access patterns can strongly influence school planning and resource allocation (UNESCO, 2023). When several schools operate in an area with a declining student population, closures and mergers become more likely.

2. Rising Operational Costs

Another major challenge for new schools is the high cost of operation. Running a school requires continuous spending. Schools must pay salaries for teachers, administrators, security staff, cleaners, and support staff. They must also pay for classroom materials, technology, electricity, water, internet, building maintenance, transportation, and safety systems.

For new schools, startup costs can be especially high. They may need to invest in buildings, furniture, laboratories, libraries, playgrounds, computers, and learning platforms before they begin receiving sufficient income. If enrollment grows slowly, the school may not recover these initial costs quickly.

Inflation and economic instability can make the situation worse. When prices rise, schools spend more on utilities, materials, and salaries. However, schools cannot always increase tuition fees because families may not be able to afford higher costs. The World Bank has noted that education systems often face financial pressure when economic conditions reduce household income and government budgets (World Bank, 2022). As a result, schools may operate at a loss and eventually decide to merge or close.

3. Strong Competition in the Education Market

New schools also face strong competition from existing schools. In many cities and towns, parents can choose among public schools, private schools, international schools, religious schools, tutoring centers, and online learning platforms. Established schools already have a reputation, experienced teachers, alumni networks, and parent trust. This makes it difficult for new schools to attract enough students.

Competition is especially intense in private education. Parents paying tuition fees usually compare schools carefully. They consider academic results, teacher qualifications, English programs, technology, extracurricular activities, safety, transportation, and university pathways. If a new school cannot clearly show its advantages, parents may choose a more established institution.

Online education has also changed the competitive environment. Since the COVID-19 pandemic, many families have become more familiar with digital learning. Some students now use online courses, tutoring platforms, or hybrid learning options. The OECD has explained that digital transformation is changing how education is delivered and how learners access knowledge (OECD, 2021). This means traditional schools must improve their teaching models to remain competitive.

4. Teacher Recruitment and Retention Problems

A school’s success depends heavily on the quality of its teachers. However, many new schools face difficulties in recruiting and retaining qualified teachers. Experienced teachers may prefer to work at well-established schools that offer better salaries, job security, professional development, and career growth.

New schools may not yet have stable finances, which can limit their ability to offer competitive salaries. They may also lack strong academic leadership, mentoring systems, and teaching resources. This can make teachers feel unsupported and lead to high staff turnover.

Teacher shortages are a global issue. UNESCO has reported that many countries need more qualified teachers to achieve quality education goals (UNESCO, 2023). When a new school cannot hire enough qualified teachers, the quality of education may decline. Parents may lose confidence, enrollment may fall, and the school’s financial situation may become worse.

5. Economic Pressure on Families

Family financial conditions directly affect school enrollment, especially in fee-paying schools. When families face unemployment, reduced income, inflation, or business difficulties, they often reduce spending. Education remains important, but parents may move their children to lower-cost schools or public schools.

This creates a serious problem for new private schools. If many parents cannot pay tuition fees on time, the school’s cash flow becomes unstable. Schools may struggle to pay salaries and daily expenses. In some cases, schools offer discounts or scholarships to attract students, but this also reduces income.

The World Bank has emphasized that economic shocks can affect household investment in education, particularly among low- and middle-income families (World Bank, 2022). Therefore, in difficult economic conditions, schools that depend heavily on tuition fees are at higher risk of closure or merger.

6. Government Regulations and Compliance Requirements

Schools must follow government regulations related to licensing, curriculum, teacher qualifications, student safety, building standards, health requirements, and administrative reporting. These rules are necessary to protect students and maintain education quality. However, compliance can be difficult and expensive for new schools.

For example, a school may need to meet standards for classroom size, fire safety, sanitation, playgrounds, laboratories, libraries, and student records. It may also need to employ qualified teachers and follow approved curricula. If a new school does not meet these requirements, it may not receive permission to operate or expand.

Regulatory compliance requires time, money, and management capacity. Schools with weak administration may struggle to prepare documents, maintain records, and pass inspections. In such cases, merging with a larger institution may help the school meet standards more effectively.

7. Changing Parent Expectations

Parents today expect more from schools than basic teaching. They want safe campuses, qualified teachers, modern classrooms, English or international programs, technology integration, strong communication, extracurricular activities, mental health support, and preparation for future careers.

New schools may find it difficult to meet all these expectations immediately. If facilities are limited or academic programs are not well-developed, parents may not be satisfied. Negative parent feedback can quickly affect a school’s reputation, especially through social media and online reviews.

Modern education requires schools to be responsive, innovative, and student-centered. According to the OECD, schools must adapt to changing social, technological, and labor market demands (OECD, 2021). Schools that fail to adapt may lose students to competitors.

8. Weak Strategic Planning and Management

Some new schools close because of weak planning and management. Opening a school requires more than having a building and teachers. It requires a clear business plan, financial model, marketing strategy, academic plan, human resource system, risk management plan, and long-term vision.

Common management problems include:

• Underestimating startup costs
• Overestimating enrollment numbers
• Poor budgeting
• Weak marketing
• Lack of teacher training
• Poor communication with parents
• Ineffective leadership
• Limited understanding of education regulations

If school leaders do not monitor finances, enrollment trends, academic quality, and parent satisfaction, problems may grow until they become impossible to manage. In such situations, merger may be used as a rescue strategy.

9. Why Schools Choose to Merge Instead of Close

Merging can be a practical solution when a school is struggling but still has valuable resources. A merger allows two or more schools to combine their students, teachers, facilities, finances, and management systems. This can reduce costs and improve stability.

Schools may merge to:

• Increase student numbers
• Share teachers and administrative staff
• Reduce rental or facility costs
• Improve academic programs
• Strengthen financial management
• Meet government requirements
• Protect students from sudden disruption
• Maintain employment for some staff

A merger can be better than closure because it allows students to continue learning with less interruption. However, mergers also bring challenges. Schools must manage differences in curriculum, fees, staff contracts, leadership style, school culture, and parent expectations.

10. Effects of School Closure or Merger

School closure or merger affects many stakeholders. Students may need to transfer to a new campus, adjust to new teachers, make new friends, and follow a different curriculum. This can create stress and learning disruption.

Teachers and staff may lose jobs or face changes in salary, responsibilities, and working conditions. Parents may worry about transportation, tuition fees, academic quality, and emotional effects on their children. Communities may lose an important local institution.

For this reason, school closure or merger should be handled carefully. Communication with parents, students, teachers, and government authorities is very important. A clear transition plan can reduce confusion and protect student learning.

11. Strategies to Improve the Survival of New Schools

New schools can reduce the risk of closure or merger by using strong planning and management strategies.

11.1 Conduct Market Research

Before opening, school owners should study the local community. They need to understand population size, family income, competitors, parent expectations, and demand for different programs.

11.2 Build a Realistic Financial Plan

Schools should prepare a budget that includes startup costs, operating costs, emergency funds, and realistic enrollment projections. They should avoid depending on overly optimistic student numbers.

11.3 Develop a Clear Identity

A new school needs a strong value proposition. For example, it may focus on bilingual education, STEM, arts, sports, moral education, international curriculum, or affordable quality education.

11.4 Invest in Teacher Quality

Schools should recruit qualified teachers, provide training, support professional development, and create a positive working environment.

11.5 Strengthen Parent Communication

Parents need regular updates about student progress, school activities, safety, and academic plans. Good communication builds trust and loyalty.

11.6 Use Technology Effectively

Technology can support teaching, administration, communication, and student assessment. However, it should be used to improve learning, not only for marketing.

11.7 Maintain Compliance

Schools must understand and follow government regulations from the beginning. Good record-keeping and safety standards are essential.

11.8 Monitor Performance

School leaders should regularly review enrollment, finances, academic results, teacher performance, and parent satisfaction. Early action can prevent serious problems.

Conclusion

New school operations close or merge because they face many pressures in the current situation. The most important causes include low student enrollment, high operating costs, strong competition, teacher shortages, economic pressure on families, government regulations, changing parent expectations, and weak management planning. These challenges are connected. For example, low enrollment reduces income, which affects teacher recruitment, facilities, academic quality, and parent trust.

Merging can be a useful strategy when schools want to reduce costs, combine resources, and protect students from complete closure. However, both closure and merger must be managed carefully because they affect students, families, teachers, staff, and the wider community.

To survive, new schools need realistic planning, strong financial management, qualified teachers, clear identity, effective marketing, good parent communication, and continuous improvement. Education is not only a business; it is a social responsibility. Therefore, school leaders and policymakers must work together to create sustainable schools that provide quality learning for students.

References

1. OECD. (2021). The state of school education: One year into the COVID pandemic. Organization for Economic Co-operation and Development. https://www.oecd.org/education/state-of-school-education-one-year-into-covid.htm
2. OECD. (2021). OECD Digital Education Outlook 2021: Pushing the frontiers with artificial intelligence, blockchain and robots. OECD Publishing. https://doi.org/10.1787/589b283f-en
3. UNESCO. (2023). Global report on teachers: Addressing teacher shortages and transforming the profession. UNESCO. https://www.unesco.org/en/teachers/global-report
4. UNESCO Institute for Statistics. (2023). Education data and indicators. UNESCO UIS. https://uis.unesco.org/
5. World Bank. (2022). The state of global learning poverty: 2022 update. World Bank, UNESCO, UNICEF, FCDO, USAID, and Bill & Melinda Gates Foundation. https://www.worldbank.org/en/topic/education/publication/state-of-global-learning-poverty
6. World Bank. (2022). Education finance watch 2022. World Bank and UNESCO. https://www.worldbank.org/en/topic/education/publication/education-finance-watch-2022