Why Per Student Costs are Misleading
If you’ve ever heard someone say, “We’re spending more per student on that program—we need to consider cutting it,” I get it. It sounds logical. But as a finance professional, I can tell you the reality is far more complicated.
Let me explain why.
📊 The Real Cost Curve: Why School Spending Jumps in Big Steps
Running a school is like heating your home—most costs stay the same whether you heat one room or many. Likewise, if a classroom has 22 students or 18, you still need a teacher, lighting, and maintenance. Small enrollment changes rarely change total costs.
Schools work the same way. Most of our big expenses—like teachers, buildings, and utilities—don’t change much unless you make a major adjustment, like closing a classroom or an entire campus.
This is why marginal costs are so important. Take a look at this:
⬆️ Cost "Step Function" Explained:
As you grow past these thresholds, the district must invest in new classrooms or buildings. But between those points, the cost per student can actually look lower—giving a false sense of efficiency.
🔍 Why Losing Students Can Raise Costs
Our district is seeing a decline in enrollment—a trend we’ve already experienced since 2020. You might think serving fewer students saves money. But here’s the catch:
If we go from 22 to 21 students, we still need a teacher and a classroom. Nothing really changes. But because we’re now dividing that cost among fewer kids, the cost per student actually increases.
Here’s a simple example:
You don’t save real money until you remove an entire classroom—which requires dropping 22+ students in just the right places. Otherwise, you may raise your cost per student, even as enrollment drops.
✅ The Smarter Way Forward
With enrollment falling and tough budget choices ahead, it’s tempting to look at cost-per-student numbers and assume that losing students will make us more efficient. But the math says otherwise.
Instead of shrinking to fit the numbers, we should be growing to meet our mission. That means investing in programs that attract and retain families, like language immersion, STEM, and career pathways. It means communicating early and often with parents, so they’re part of shaping what our schools offer—not surprised when programs are cut.
We saw firsthand how this can work at Valley View Elementary during the 2024–2025 school year. When the district reintroduced Spanish Immersion, the incoming kindergarten class doubled compared to the previous year. In fact, it was the only kindergarten class in the entire district that didn’t decline in enrollment. That’s a powerful signal.
Our path forward must be rooted in growth, not retreat. That means:
Use marginal cost modeling, not averages.
Preserve what matters most—teachers and classrooms.
Avoid shortsighted decisions that cost more in the long run.
Prioritize enrollment growth, not retreat.
