It is as the OP says, that public school districts are grouping children by age into various buildings. The reason is entirely financial. All the educational research points to neighborhood schoola with a wide range of age groups being a psychologically and educationally healthier environment. This is the natural result of readily available, socially acceptable birth control. The school districts that mushroomed during the baby boom years find the declining birthrate hard on the bottom line. It's called streamlining and is usually presented as the most progressive trend in education. Districts that, at one time, couldn't build additions and new schools fast enough now find themselves letting staff and faculty go, selling off their older buildings. It has the same effect as busing in that there is no choice whatsoever for attending different schools within the same district.
Case in point, I graduated from a suburban school district in 1978. When I started in 1965, the district had three small buildings and went up to grade 4, after which time students attended class in a neighboring district with a regional high school. By 1978, the district covered grades K-12, and had seven elementary schools, K-5, three middle schools, 6-8, and two high schools, 9-12. Ten years ago, they began closing and selling the older, original buildings. They are down to two elementary buildings, one with grades K-2, the other with grades 3-5, one middle school, 6-8, and one high school, 9-12. One wing of the K-2 building is for administrative offices. If the number of children continues to decline at the same rate, the long range plan is to place grades K-5 in two of the three wings of the present K-2 building, and sell the other. There is the possibility of housing middle and high school in the present high school, and selling the middle school.
The general population of the area is actually increasing, but it is from an influx of well-to-do young professionals, the majority of whom have only one child or no children at all. Middle, working, or low income families cannot afford to live there. The baby boomers who stayed are now retired and are choosing to "age in place."
Increasingly, anyone having a large, traditional type family has a substantially lower standard of living than the one in which they were raised often having no choice but to move away from grandparents and older relatives.
For most serious Catholics, the public schools are no place to send their children. Homeschooling or some variation of it is the only option for most. As said one poster, better to be on welfare and SNAP than to send one's children to lose their souls in public school.