NBOA President and CEO
In summer 2025, we’re about six months into the second Trump administration, and, to put it mildly, the U.S. has seen a lot of policy changes. While every presidential transition involves new priorities, these shifts are more wide-ranging and less predictable than in the past. Several of the policy changes under discussion or implementation — from federal budget and reduction in the federal workforce to immigration enforcement — will likely affect independent schools.
My intention here is not to join the political fray or project any certainty around executive branch actions. Instead, I want to address the potential impact of these substantive changes on our independent schools. While much of the political discourse around schools involves public education, independent school business leaders should be aware of possible ripple effects. Staying updated means we can prepare for and respond to potential financial and operational uncertainties.
Many business leaders have told me they are worried about the impact of recent federal job eliminations on their schools’ finances. An NAIS snapshot survey on the impact of federal actions on families’ employment, conducted this spring, reflects many of those concerns. I was encouraged that more than two-thirds of CFOs hadn’t noticed an impact on prospective families committing to their schools, but a significant portion, 29%, had families that had experienced a change in employment status due to recent federal action.
That translates to increased demand for financial aid and potential enrollment losses. Almost a fifth of respondents saw an uptick in financial aid requests in response to federal employment changes. Another 18% said prospective families had withdrawn from the admissions process or chosen other schools due to cost. Others were taking longer to decide to enroll or were unsure whether they would stay in the area due to job insecurity. In response, 41% of schools reported they were offering extended payment plans, 34% are being flexible with families on deposit/commitment deadlines, and 27% are allocating additional financial aid funds in their 2026 budgets.
As the prospect of further federal cuts and a recession loom at the time of writing this article, we hope these numbers don’t slide further. If you know me, you know I love to lead with optimism, but that doesn’t preclude keeping my eyes open to the realities before us.
Close to Home
I was curious to see the impact of federal actions on an independent school in the Washington, D.C., area, so I reached out to Dyana Conroy, CFO and associate head of school for finance and strategic initiatives, at The Potomac School in McLean, Virginia, and a member of the NBOA Board of Directors. While the school has seen some changes in families’ employment status, Conroy emphasized that “it’s an evolving situation.” What is front and center are the relationships with each family. As she noted, “We are having individual conversations with families to understand their needs in terms of support and align that with our capacity to help.”
Potomac is taking pages from its pandemic playbook to meet evolving needs: financial aid contingency funds, flexible payment plans and limiting expenses that don’t detract from the student experience. Additionally, leaders are looking at high interest rates not just as a challenge but as a potential opportunity. Conroy and her colleagues are asking, “What opportunities are there to generate additional interest income to offset what we think will be increased costs?” This could be through managing reserves or better overall cash management. “Schools receive a large percentage of tuition in July, but expenses occur ratably thereafter,” Conroy explained. “There is an opportunity to invest operating cash as well to maximize return and offset any increasing costs.”
Watching Higher Education
Higher education is often a bellwether for issues that touch independent schools. That’s why I am closely watching the situation at our colleges and universities. The Trump administration has taken a host of unprecedented actions, including revoking international students’ visas, freezing or revoking billions in federal grants, and threatening to rescind Harvard University’s tax-exempt status. The moves, many of them challenged in court, revolve around institutions’ handling of student protests over the Gaza conflict and DEI policies. Our business officer colleagues at NACUBO have been tracking those developments.
Because such a high portion of a typical university budget relies on government funding, higher ed institutions are understandably worried about their future. Our schools are in a different position, but should still be tracking relevant issues.
Grace H. Lee, NBOA’s legal counsel and a partner at Venable LLP, has been fielding questions about some of these issues, and immigration is a top concern. Recent policy changes mean schools can no longer assume that ICE (Immigration and Customs Enforcement) will treat campuses as “sensitive locations” when conducting enforcement activities. In response, many schools are creating policies on what to do if ICE officers arrive on campus. Those might include setting up protocols, deciding who is authorized to speak to officials and understanding a school’s rights when it comes to documenting requests.
International travel also has independent schools concerned. What happens if students or employees are detained by immigration officials at the boarder? Lee has received requests from schools seeking the names of immigration lawyers who would be able to assist in those situations. Lee also underscored the need for schools to educate faculty, staff and volunteers about their rights at the border and to ensure that they prepare for possible increased scrutiny. For example, she was recently reminded that U.S. Customs and Border Protection (CBP) may, on rare occasions, search a traveler’s mobile phone, computer or other electronic devices when crossing the border.
Government Funding
The first months of the Trump administration have seen several executive orders involving K-12 education, including ones aimed at ending “indoctrination” about gender ideology and equity. Because most independent schools are not recipients of federal financial assistance, executive orders around K-12 education may not have an immediate or direct impact, Lee noted. It’s a good idea, however, to look at any federal funds your school might receive, including programs like E-Rate, National School Lunch Program or the Nonprofit Security Grant Program (NSGP). Lee cautioned that it’s possible a federal agency could rescind funding if officials find the school isn’t complying with a program or executive order’s policies.
State voucher programs also come into view in the changing funding landscape. As the administration makes changes into the federal Department of Education, an executive order issued earlier this year steers public school federal dollars toward private school vouchers. “Those funds — including state vouchers — may come with strings attached in terms of policies and regulations, and should be examined on a state by state basis,” Lee said.
Political winds change, but your school’s mission should always be its leaders’ North Star.
Even schools that don’t receive any federal dollars are worried about these policy shifts and possible compliance conflicts. Some leaders are asking if they should dial back their equity initiatives, for instance, to stay off government officials’ or even community members’ radar, even if there’s no mandate to make changes. As always, it’s a question of your school’s mission and finding what works in staying true to that purpose. Political winds change, but your school’s mission should always be its leaders’ North Star.
Opportunity Amid Uncertainty
Even with these challenges, opportunities exist, just as independent schools learned during the COVID-19 pandemic. Conroy sees a chance to address the nationwide shortage of educators and attract them to independent schools. With professionals displaced from federal jobs, independent schools have a unique chance to recruit those skilled workers. And schools could partner with universities and associations to retool and retrain talent to take on teaching roles.
Ultimately, the independent school sector’s path forward lies in controlling what can be controlled — and finding silver linings in the process. As Conroy noted, “It’s about leaning into our core principles of a connected community.” That’s a principle that will serve all of us well in any political or economic climate.
Follow NBOA President and CEO Jeff Shields on LinkedIn.
