- Public schools are no longer the explicitly Protestant institutions they were back in the 1900-1960 era
- The teaching orders whose virtually free labor made Catholic schools relatively affordable in their golden age virtually ceased to exist in the decades following Vatican II
- Changing demographics have moved Catholic populations away from many of the schools already built, and in this day and age building new ones is vastly more expensive
The Archdiocese of New York, for example, reported in 2008 that, among its inner-city schools, nearly two-thirds of students lived below the poverty line and more than 90% were racial minorities. In Washington, D.C., as of 2007, more than 70% of students attending the lowest-income Catholic schools were non-Catholic. In Memphis's inner-city "Jubilee" Catholic schools, as of 2008, 96% of students lived below the poverty line and 81% were non-Catholic. In fact, over the past 40 years, the portion of minority students in Catholic schools overall increased by 250%, and the share of non-Catholic students increased by 500%.The situation in the suburban Los Angeles Catholic schools that I was familiar with as a youth had similarities and differences. They didn't lack for students, because a crumbling public school system left many parents searching for private alternatives. But there were a great many non-Catholic parents as well as Catholic ones eager to send their children to schools with tuition substantially lower than secular private schools. (Charters didn't exist back then, so that dynamic may be changing.) As a result, with waiting lists for admission, schools often selected parents likely to pay their tuition bills regardless of religious affiliation, and as student bodies became less Catholic, so did the instruction. Aside from the wishy-washiness of many of the people in parish or diocesan religious education, if you have a lot of parents paying your bills who would like a vaguely "religious heritage" but not very rigorous catechesis, money usually ends up talking.
Many of the people associated with these schools will explain that they are motivated not by an obligation to evangelize but by a desire to fulfill their faith's longstanding commitment to service. Among them, an unofficial creed has slowly emerged: "We don't serve these students because they are Catholic, we serve them because we are Catholic." Regardless of one's position on public support for religiously affiliated entities, it is difficult not to acknowledge that these schools are fully engaged in the noble vocation of public service, civil rights, and social justice. The challenge now is to clear the way for public support of that vocation — and one promising policy innovation may provide the solution.
Either way, however, what you get is Catholic schools which are run by Catholics, and to some extent for Catholics, but which do not have imparting the faith to students and maintaining an explicitly Catholic culture as a primary mission. And as this ceases to be the case, many of the parents who are most serious about their children's faith (and thus who are most likely to provide lots of support and volunteer hours to a school) will start to wonder if it's really worth making major financial sacrifices in order to send their children to a Catholic school.
What the solution to this is I honestly can't say. In a world in which we don't have the massive numbers of religious brothers and sisters who staffed schools in the past -- people willing to accept a live of celibacy and poverty in order to care for the wider Church family rather than have families of their own -- operating traditional format private schools is financially prohibitive without a tithing culture which goes far beyond what Catholics generally achieve. And with a more educated laity, homeschooling and independent Catholic schools are realistic alternatives in a way in which they simply were not 50 or 100 years ago. It may be that the age of the Catholic school systems (an era which lasted less than 100 years in this country) is simply passed, not to return. If it is to continue, it would seem that it will need to do so through substantial change over the years to come.