Cost Per Pupil: Does it matter?

April 21st, 2025

Increasingly, the conversation about school funding in New Hampshire is centering on a single metric: Cost Per Pupil. How is a school district’s cost per pupil calculated?  What does the formula include, what does it omit and more importantly, what are the implications?  

Understanding the Math

Cost Per Pupil (CPP) is a common calculation in the complex area of school funding. The New Hampshire Department of Education describes Cost per Pupil this way: 

"The Cost per Pupil represents, with certain adjustments, current expenditures from all funding sources (local, state and federal) associated with the daily operation of schools. Payments to other school districts and private schools have been subtracted. Revenues from the sales of lunches have also been excluded. Cost per Pupil is calculated by subtracting tuition and transportation from K-12 current operating expenditures, and then dividing by the average daily membership in attendance (ADM-A)." 

Essentially CPP represents how many students are enrolled in a particular school or district and how much it costs to operate that school on a daily basis.  Tuition agreements, transportation costs, debt and other factors are not considered daily operational expenses of the school or district.  

Understanding School Funding

To better understand what the CPP metric tells us about school funding in New Hampshire it is helpful first to name what it DOES NOT include:

  • It does not delineate between fixed costs (those that exist regardless of the number of students) and variable costs (those that increase or decrease based on how many students are present) 

  • It does not account for any community-specific circumstances 

  • It does not reflect the local cost of living

The Stakes of Getting it Wrong

Decades of research has shown that when public schools are sufficiently funded in a sustained manner, students do better academically, are more likely to graduate high school, and have higher lifetime earnings. This is especially true for students who are furthest from opportunity -- including students navigating poverty, those who live in property poor towns, and those of traditionally excluded backgrounds.

School districts need fair and adequate resources to operate their public schools, hire and retain  highly qualified teachers and staff, and offer robust academic courses and programs. Increased school funding has led to improvements in student academic outcomes, increased graduation rates, and lower instances of adult poverty. 

When public schools receive adequate funding, it results in:

  • Substantial improvements in math, English, social studies, and science achievement,

  • Lower class sizes

  • More qualified teachers

  • Reductions in grade repetition

  • Reductions in suspensions and expulsions

  • Increased likelihood of high school graduation and being college-ready

  • Higher lifetime earnings and reduced incidence of adult poverty

Educational Researcher Bruce D. Baker, of Rutgers University, who was hired by the New Hampshire Legislative Commission to Study School Funding, concludes:

"To be blunt, money does matter. Schools and districts with more money clearly have greater ability to provide higher-quality, broader, and deeper educational opportunities to the children they serve. Furthermore, in the absence of money, or in the aftermath of deep cuts to existing funding, schools are unable to do many of the things they need to do in order to maintain quality educational opportunities."

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