US Public Schools Lean on Reserves as Financial Challenges Grow

The financial health of American public schools is deteriorating even as they are borrowing from debt markets at a frenzied pace.

The number of negative ratings or outlook revisions that S&P Global Ratings handed out to school districts soared 40% between June 2024 and June 2025, the company said in a report. About a third of the schools S&P rates had operating deficits in 2024, compared to just 17% in 2021.

School districts have been rushing to sell municipal bonds. The sector’s issuance so far this year has reached about $66.7 billion, up 51% compared to the same period in ...