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If we consider the goal of schools to be improving the lives of students, enabling them to be better citizens, and earning higher incomes (therefore paying higher taxes) then smaller schools are actually much more cost effective than larger schools.
All of that is before you even begin to factor in such things as “sense of community” or physical safety which can be difficult to quantify, but that we know are greatly enhanced in smaller schools.
In many areas this has led to efforts to replace the larger schools with smaller more effective ones.
The Urban Academy in New York City sends over 90% of its students on to college, despite drawing students from one of the most impoverished areas of the city.
Illinois Governor Pat Quinn and the state’s legislators are considering the consolidation of school districts in order to save the state money.
Quinn has stated that there are 270 school superintendents who make salaries higher than that of the Governor. Governor Sheila Simon in charge of this effort, due to her experience as an educator and concern for the school system.
It’s equally beneficial from a social standpoint—fewer students in the room make class participation inescapable, but also usually less intimidating.
Then, New York University researchers showed that when all costs are figured in, the smaller schools actually cost less to produce a graduate than the larger schools do.
Of course the larger schools do produce many more dropouts, so it depends on what your goal is.
Many are unaware that this is mitigated in smaller schools; in fact reducing the size of the school is directly tied to improved outcomes for the students whose families are in poverty!
Studies also show smaller schools being safer than larger schools.