American Heritage Academy in Carrollton has educated thousands of students in a family-like Christian setting for 12 years. But it can't survive any longer.

The academy, which serves pre-kindergartners through high school seniors, is shutting down at the end of this school year, an academic casualty of the horrendous economy.

"I loved every moment of it," said junior Hannah Gasaway. "There's nothing like it. You can imagine the emotions that everyone felt when we found out the school is closing. I'm going to cherish these last three months."

While the academy's situation may be extreme, other private schools are also feeling the impact of the economy. Their market-fueled endowment funds have shrunk, and they are wondering how next year's tuition increase will go down with their customers.

Like many of American Heritage's 400 students, Hannah and her family have been scrambling to find another school to attend next year.

Covenant Church of Carrollton, which owns American Heritage Academy, has contributed more than $1 million a year to the school for the last seven years. Still, the combination of church support and student tuition didn't keep the academy from operating in the red, according to Brian Coleman, executive director at Covenant Church. It didn't help that school enrollment has dropped 19 percent since 2006, he said.

"We believe that the struggling economy has definitely been a significant factor in our declining enrollment, which increased the operating deficit for the school," Coleman said, adding that the church's financial health remains solid.

Officials at Greenhill School in Addison and Prince of Peace Christian School in Carrollton said their endowment funds dropped 20 percent to 25 percent last year. Some schools affiliated with the Catholic Diocese of Dallas have experienced similar losses, according to Sister Gloria Cain, superintendent of schools.

"It will limit the amount of financial aid we can offer," Cain said, "unless we can supplement that with someone else's help with financial aid."

Scott Griggs, head of Greenhill School, recently held a special meeting with parents about availability of financial aid. The school will increase its financial aid budget by $400,000, to about $2.8 million, he said.

"There's always that concern that you're always going to lose a family. That's a greater potential during this current economic situation," Griggs said. "We want them to know all the opportunities out there so we can keep as many families as we can."

To make more money available for financial aid, Griggs said Greenhill has cut its energy costs and is trying to make cafeteria operations more efficient.

Prince of Peace is in the middle of its new-student application process for next school year. So far, the school has received 25 fewer new-student applications this year compared with last year.

Headmaster Chris J. Hahn said 25 students amount to big bucks.

"If you assume $10,000 a student, that's a quarter-million dollars" out of a $9 million budget, Hahn said.

The tuition next year at Prince of Peace is expected to increase about 7 percent, which is comparable to increases in previous years, Hahn said. Griggs said Greenhill's tuition for next year will include a "slight" tuition increase, but declined to be specific.

At Episcopal School of Dallas, chief financial officer Chris Burrow said the school is phasing out nonteaching positions through attrition.

"When you have a full-time nonfaculty member who decides to retire or relocate, we're filling those positions with part-time people or people who are already here," Burrow said. The tuition increase for next year at Episcopal School of Dallas will be 3.5 percent instead of the average 6 percent increase in recent years.

"We think it's a period of time where we need to make the tuition rate as affordable as possible," Burrow said.

But the school has found a silver lining in the rough economy. Contractors are bidding more aggressively to ensure a steady stream of work during the down economy. Last June, the school budgeted $25 million for a new dining hall and athletic and wellness center based on the best bids at the time. The school asked for new bids in January, and the best bids came in a total of $1.5 million below the June prices.

Cain, of the Catholic Diocese, said she is trying to find ways to cut costs without sacrificing quality.

"We're stretching our dollars as far as we can," Cain said. "I'm having everybody look at their budgets and look at their staffing. We want to make sure schools are not overstaffed."

For example, schools with small enrollments might begin to share full-time art or music teachers. Positions such as playground monitors might also be re-examined.

Cain said private school families from all over Dallas are feeling the pinch. Even so, the number of applications to Dallas' Catholic high schools is among the highest in recent years, Cain said.

"We don't know why that is," she said. "We've got public school children applying into private schools."

Hahn, the headmaster at Prince of Peace, said the benefits of private school justify the cost.

"A secure place for your kids to be – you can't put a price tag on that," he said.

But Hannah, whose school is closing next year, said she's never expected the economy to hit her so directly.

"I'm still young. Until this point, I hadn't really thought about the economy," she said. "It's opened my eyes."