Today, over 25 percent of North Carolina’s 1.8 million K–12 students attend either a charter school, private school, or home school, otherwise known as schools of choice.

One program that has helped to propel the choice movement in North Carolina is the Opportunity Scholarship program (OSP). It is a publicly funded voucher that provides thousands of families the chance to secure a better education for their children. In 2023, the General Assembly removed income requirements on the program, and parents responded accordingly. In 2024–25, over 80,000 students were awarded Opportunity Scholarships, with enrollment in the coming years expected to be even higher.

While parents and choice advocates are thankful for the opportunities and the tremendous support lawmakers have shown the program, the satisfaction is tempered by real challenges:

  • Private school enrollment has grown by almost 32,000 since 2020 (a 31 percent increase), yet only 179 new private schools have been started during the same time period.
  • Only 8.4 percent of recipients of the Opportunity Scholarship were classified as prior public-school attendees, according to a recent State Board of Education report. Hence, most of the students who received new Opportunity Scholarships were already enrolled in private schools.
  • State law allows any K–12 student to apply for a scholarship under the Opportunity Scholarship program. Still, current budgets are woefully insufficient to fund all applicants.

Important questions emerge from these realities:

Do North Carolina private schools have the capacity and the resources to educate increasingly larger numbers of students? How are school leaders choosing to meet the growing demand for alternative educational options? Does North Carolina have an environment that encourages entrepreneurship in school expansion and creation? What factors are behind decisions by education entrepreneurs to build or not to build?

Two surveys, one administered to private school leaders in North Carolina and the other to educational entrepreneurs, were distributed earlier this year to help gain insight into these questions. Results showed:

  • On average, private schools in North Carolina have 21 percent unused capacity, a significant number, which means there is room to grow. Expected growth in enrollment has been masked by the fact that a high percentage of OSP recipients are already in private schools. Hence, they are not counted as new students.
  • Over 90 percent of school leaders surveyed expect the demand in educational services to increase in the coming years, whether significantly (which 50 percent expect) or slightly (42 percent).
  • The average tuition of private schools ($8,748) in this survey is significantly below the average tuition of private schools throughout North Carolina ($13,231).
  • The average aid package at responding schools ($5,071) covers about 78 percent of tuition, which is large enough to have a positive impact on individual decisions.
  • School leaders and education entrepreneurs are very much interested in meeting demand through adding new seats in classroom building new classrooms, expanding existing campuses, or some combination.
  • Nevertheless, these plans are often blocked by access to funding, lack of existing facilities, excessive zoning and building regulations, and difficulty in hiring qualified teachers and staff.

How can policymakers in North Carolina ensure adequate school capacity for a growing school choice population and encourage entrepreneurs to build schools in the state? Based on the results of our surveys, policymakers can take six steps to help ensure school choice flourishes in North Carolina. The steps include:

  • Stabilize Funding. Moving the Opportunity Scholarship and ESA+ programs to formula-based funding instead of a legislative appropriation would provide school leaders and entrepreneurs with reliable funding levels, send a strong signal to education markets, and most importantly, remove important decisions from annual political debates.
  • Market the Opportunity Scholarship and ESA+ Programs. The benefit of private school expansion will come about more quickly when providers enjoy a steady stream of funds and students and when the public know about the Opportunity Scholarship and ESA+ programs. This problem can be solved by creating either a private or public Scholarship Granting Office to champion the program, which many successful school choice states have done, and by granting funds to market the programs across the state.
  • Expand Access to Funding. Public dollars can be supplemented by contributions from individuals and corporations. Such donations can be incentivized via tax credits.
  • Reduce the Regulatory Burden on Starting or Expanding Schools. Regulation of educational enterprises should rise only to the level necessary to protect public health and safety and be applied equally to public and private schools.
  • Encourage Effective Public/Private Partnerships (PPPs). PPPs can aid the creation of new organizations, such as a private school equivalent to the Public School Forum, which could further the interest of private schools, share information between public and private schools, and focus on improving funding mechanisms for private school capital needs.
  • Encourage Entrepreneurship. Laws and regulations should encourage — not punish — risk-taking. Offering financial incentives should encourage entrepreneurship while highlighting achievements and individual accomplishments.