Small Schools Are Cost-Effective

Published January 1, 2003

A new review of research on school size concludes investing in smaller rather than larger schools is a wise move when the cost per graduate is taken into account.

In making the case that small schools are not cost-prohibitive, the report identifies educational and social benefits of small schools and contrasts these with the negative effects large schools have on students, teachers, and members of the community.

“Many decision-makers … are reluctant to embrace small schools for fear they are not economical and place an unnecessarily heavy burden on taxpayers,” note the authors of the report, Dollars and Sense: The Cost-Effectiveness of Small Schools, published in September 2002 by the KnowledgeWorks Foundation. The report shows “there are many economic arguments in support of small schools and that it is fiscally responsible to spend school construction dollars on small school facilities.”

As a consequence of school district consolidation between 1950 and 1975, the number of public schools in the U.S. has declined dramatically over the past half century, and the size of the average school increased from just over 100 students to well over 600. Many high schools now enroll more than 1,000 students.

Although the trend towards larger and larger schools continues to this day, it has not been driven by studies showing the benefits of larger schools. In fact, it has been more than three decades since a study was published recommending larger schools, according to Indiana University researcher Tom Gregory. What drives the creation of larger schools, the report suggests, are the following state policies:

  • minimum enrollment qualifications for state funding of school facilities;
  • excessive acreage requirements, which tend to push officials to consolidate smaller schools;
  • policies that discourage renovation and maintenance of older schools by triggering new construction when renovation costs exceed a certain level.

State policy can be contradictory, too. While North Carolina’s facilities planning guidelines recommend a minimum school size of 450 students, the same publication lists much smaller school sizes for improved safety and violence reduction: elementary, 300-400; middle, 300-600; and high school, 400-800.

“Most researchers have determined a measurable positive relationship of smaller school size to safety, climate, and order,” state the North Carolina facilities planning guidelines.

Enrollment Per Grade Is Key

The Dollars and Sense report points out that a 500-student school with grades K-8 is a not the same “size” as a school with 500 students in grades 3-4. The first is a “small” school with 56 students per grade; the second is a “large” school with 250 students per grade.

“Including a wider rather than narrower grade span configuration is a better way to reap the advantages of small schools,” argue the report’s authors, noting research has identified “social and academic liabilities” to having narrow grade spans.

The report suggests the following ideal upper limits of “small size” for schools with conventionally wide grade spans:

  • Elementary grades 1-6: 25 students per grade level; 150 total enrollment;
  • Elementary grades 1-8: 25 students per grade level; 200 total enrollment;
  • Middle grades 5-8: 50 students per grade level; 200 total enrollment;
  • High school grades 9-12: 75 students per grade level; 300 total enrollment.

Benefits of Small Schools

Studies have shown small schools can operate more flexibly and more responsively than large schools because there is less formal bureaucracy. Students and teachers in small schools know each other better, there are higher levels of teacher satisfaction, and community members are more involved with the schools.

“There is less violence in small schools, less vandalism, a heightened sense of belonging, and better attendance,” the report states. “Students earn higher grade point averages, and more participate in extracurricular activities.”

One of the most important characteristics of small schools is that their dropout rates tend to be lower than those for large schools. Besides having a profound effect on the lives of the students, lower dropout rates have a profound effect on the cost-effectiveness of small versus large schools.

For example, when reseachers at New York University’s Institute for Education and Social Policy examined 1995-96 data for 128 high schools, they found schools with fewer than 600 students spent $7,628 annually per student, while larger schools spent only $6,218.

But when the researchers took dropout rates into account, they discovered the cost per graduate at the small schools was slightly lower than the per-graduate cost at the larger schools.

Other researchers also have reported higher graduation rates in smaller schools, including those serving poor students, and higher percentages of graduates going on to post-secondary education.

“Large schools are expensive to individuals, their communities, and the nation because there are many hidden costs,” the report concludes. It urges communities and policymakers to “treasure their small schools” and protect them with sound policies and financial support.

George A. Clowes is managing editor of School Reform News.

For more information …

The 44-page September 2002 report from the KnowledgeWorks Foundation, Dollars and Sense: The Cost-Effectiveness of Small Schools, is available through PolicyBot. Point your Web browser to, click on the PolicyBot icon, and search for document #10902.