How using cost per pupil to determine open enrollment tuition could harm districts and their students

January 29th, 2026

The Senate today passed a bill that would mandate statewide public school open enrollment. The bill would require school districts to pay for their students to enroll elsewhere, using a funding scheme that in some districts will harm students who choose not to or cannot leave their home district. 

Under the open enrollment system the Senate passed, a “sending” district –  that is, the district where a student lives – must pay its full cost per pupil (unless it can demonstrate a need to pay less) to the district the student enrolls in (the “receiving” district). Cost per pupil is a metric the NH Department of Education calculates every year by totalling a district’s expenditures and dividing by the number of students. Importantly, tuition paid to other districts is not part of the expenditures considered in cost per pupil. (Find your district’s cost per pupil here.)

Let’s consider the example of Newport. In Newport, the most recent average cost per pupil was $29,290. Newport families might want to send their children to Sunapee, where the most recent cost per pupil was $31,464.

For the sake of illustration, let’s say five of Newport’s 676 students transfer to Sunapee. Newport would pay $29,290 for each student, for a total of $146,450. Each family would also have to pay $2,174 to make up the difference between Newport’s CPP and Sunapee’s. So, Newport pays $146,450, and Sunapee nets $157,320. (This assumes none of the children transferring have IEPs. If they did, Newport would likely pay more.)

It’s possible Newport would be allowed to pay as little as 80% of its CPP. It’s not clear how that determination is made, but for the sake of this illustration, let’s say both districts agree to an 80% rate. In that scenario, Newport would pay $23,432 per student, for a total of $117,160. If families are asked to make up the difference, their cost goes to $8,032 each.

What this means for cost per pupil

The problem for Newport is that with five students leaving, its costs are unlikely to go down substantially. Losing five students does not allow the district to run one fewer bus, hire one fewer teacher, or heat one less classroom. Costs – the numerator in our cost per pupil equation –  remain the same, but the number of students – the denominator – goes down. Meanwhile, in Sunapee, the costs stay about the same, but the number of students goes up. If you remember your fractions, this means that cost per pupil is going to rise in Newport and fall in Sunapee. And since open enrollment payment is based on the prior year’s cost per pupil, that means the amount Newport owes per student will rise year to year.

We ran a very basic calculation looking at how cost per pupil might change if 5 students left Newport for Sunapee every year. We kept costs constant throughout, assuming that losing even 25 students across the district is unlikely to yield substantial cost savings, just as gaining 25 students is unlikely to generate substantial new costs. In reality, costs will likely rise year-to-year, given inflation if nothing else.

Notes: The chart illustrates change in cost per pupil assuming costs in the cost per pupil equation remain consistent and five students each year move from Newport to Sunapee. Data are illustrative and do not attempt to predict other changes to district expenses.

 

Within four years, and after the migration of 20 students, Newport’s cost per pupil has surpassed Sunapee’s cost per pupil. The good news for transferring parents is they no longer have to pay out of pocket to cover the difference. The bad news for Newport and its taxpayers is that the bill from Sunapee keeps getting larger, since the cost of open enrollment is tied to the sending district’s cost per pupil. 

What this means for budgets 

And there are bigger implications for Newport’s budget. Remember that cost per pupil doesn’t include tuition paid to other schools. Newport still has to cover those payments, they just aren’t included in the particular metric used to determine open enrollment tuition. But that means Newport’s budget is really the “cost” part of the cost per pupil equation plus tuition payments for open enrollment students enrolled in other districts (plus a handful of other expenses left out of cost per pupil, which we have also left out of our model here, for the sake of simplicity). And the size of those tuition payments grows each year, since tuition is equal to the sending district’s cost per pupil and, as we demonstrated, cost per pupil is growing.

 

Notes: Data are illustrative, and assuming a consistent total cost year-to-year, adding tuition payments for open enrollment in a scenario where five students leave each year. Data in this case assume Newport pays 100% of the prior year’s CPP as open enrollment tuition. 

 

The impact of all this is that Newport’s budget grows while its enrollment shrinks. This is the case whether Newport is paying 100% CPP or 80%, though budget growth is slower in the 80% scenario, reaching $21.5 million in the 2030-31 school year, versus $22 million in the 100% scenario. In either case, at some point, the situation will become untenable. Voters will not approve an ever growing budget, and the district will be forced to make cuts to staff positions, to programming, and possibly eventually to schools. For students who get spots elsewhere, and whose parents can drive them out of town, this won’t be a crisis, but for the many students remaining in the district – remember, in our simulation, only 25 out of 676 students left – the results could be disastrous. 

What could change these patterns? 

One way for Newport to fight this trend would be to recruit students from other communities. For some districts, this might be a viable strategy, though it also means some school boards and superintendents will have to add marketing to their growing list of duties. But schools are unlikely to attract new students without first investing in new programs or facilities, and, in the absence of increased state investment, those investments will also put pressure on budgets and taxpayers.  

Many other states have open enrollment systems at some level, but all of them rely more heavily on state funding and do more to equalize school funding at the state level. The state could choose to first ensure every student has access to a quality education regardless of zip code before forcing towns to pay for students to be educated by a school with a different zip code.

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