The Stephens School District fell below 350 students for average daily attendance during the 2013-'14 school year.
According to state law, falling below that enrollment threshold requires the district to find a district to annex with or have the State Board of Education do it.
Clay Findley, attorney for Stephens Schools told the board Thursday, despite efforts to find a suitable annexation partner, it was unsuccessful.
Findley asked the board to consolidate the district with the Nevada County School District, allowing the campus in Stephens to remain open.
However, the Arkansas Department of Education recommended a plan to split Stephens with the Camden-Fairview district in Ouachita County, Magnolia School District in Columbia County and the Nevada County School District.
The three-way split of the district is expected to result in the campus in Stephens closing.
Stephens mayor Harry Brown told the board it is the latest setback for his town of approximately one-thousand residents.
"We're losing schools and building jails," Brown says. "Something is wrong with that picture. "All South Arkansas towns are losing people and when you lose families, you lose students in your school. I don't know what the answer to it is. Our legislature needs to sit down and rethink this thing."
The Stephens School District is expected to graduate its final class of seniors later this spring.
The consolidation of the district takes effect July 1.
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