I just enabled "Maximize education coverage, still need schools to get educated citizens" under City Service Options.
The Elementary School Availability shows: "Eligible: 8 - Capacity: 4600". And when I click on a school the "Elementary students in the city" kept dropping until it hit 15. In the education overview, more and more buildings turn red, the "uneducated Citizens"-percentage increses.

As soon as I disable "Maximize education coverage", the "Elementary students in the city" goes up again.

In the Statistics window of Transfer Manager CE (v2.4.24) I noticed that when "Maximize education coverage" is on, then no Outgoing transfer offers for students occur.

This affects all levels of education, I just noticed the effect the fastest for elementary schools.