Education budgets across the United States have been under scrutiny ever since President Donald Trump proposed sweeping changes. Now, a budget crisis brewing in one of New Jersey’s fastest-growing municipalities—Lakewood—has taken center stage, sparking concerns over the district’s financial future and leaving hundreds of teachers in limbo.
The crisis dates back to 2014 when the Lakewood School District borrowed $220 million to cover mounting costs. A staggering $173 million of that debt remains unpaid, and with the district running out of funds, a total financial collapse could occur as soon as February 22, 2025, if additional aid is not secured.
Despite filing an emergency loan request to the state, district officials are yet to receive a definitive response. Ongoing legal and legislative battles over school funding have further complicated efforts to secure much-needed financial relief.
Teachers in turmoil, job hunt begins
As financial uncertainty grips the district, teachers are being forced to seek employment elsewhere, fearing job instability. Many educators, struggling to pay for essentials such as housing and food, are now scrambling to secure alternative sources of income.
The district currently employs 487 teachers, all of whom face an uncertain future. The Lakewood Education Association has raised alarm bells, calling for fair compensation and warning that the ongoing crisis will have a devastating impact on both educators and students.
Union President Kimberlee Shaw underscored the gravity of the situation, telling local media, “Without secure employment or stability, our members have been left to search for employment elsewhere to provide their families with much-needed job security.”
The union has vowed to resist any staff layoffs, but the looming financial catastrophe could force difficult decisions in the coming weeks.
Lakewood’s longstanding budget woes
Lakewood’s financial struggles stem from chronic underfunding and the unique expenses associated with serving a predominantly Orthodox Jewish community. A substantial portion of the district’s $200 million budget—about 12%—is allocated to busing and special education services for private yeshiva students.
Over the years, state loans have kept the district afloat. In January 2024, authorities sought an emergency loan of $104 million. While relief has come in limited forms—such as a $50 million state loan granted in 2023—the mounting debt has only intensified pressure on the district.
In response, district officials have taken legal action, arguing that insufficient state funding violates students’ rights to a quality education.
State Department of Education spokeswoman Laura Fredrick acknowledged the situation, and said in an interaction with local media, “The Department continues to work with the Lakewood Board of Education to address its fiscal responsibilities and ensure adherence to state statutes, regulations, and best practices to provide students with the best education possible.”
A growing crisis with national implications
Lakewood’s predicament is emblematic of broader financial challenges plaguing public education in the U.S. As federal and state funding policies come under increased scrutiny, the unfolding crisis in Lakewood serves as a cautionary tale for other districts teetering on the brink.
With February 22 fast approaching, the pressure is mounting on state officials to intervene. If a viable solution isn’t found soon, Lakewood’s education system could face an unprecedented collapse—displacing students, educators, and setting a troubling precedent for school funding nationwide.
