← Back to blog

Do Schools Lose Money When Students Are Absent?

Tiago Penteado

April 12, 2024

A pressing issue facing many schools today is the rise of student absenteeism.

With each day that a student is absent, schools potentially lose money depending on the jurisdiction that their school operates within. This article aims to explore the reasons why school funding indexes on student attendance, understand the relationship between attendance and school finances, discuss the policy implications of addressing absenteeism, and provide recommendations for schools to minimize financial losses from student absences.

Why School Funding Indexes on Student Attendance

In order to understand why school funding is tied to student attendance, it's important to recognize the link between attendance and educational outcomes.

check, unchecked, checked

The Relationship Between Student Attendance and Academic Success

When students are consistently present in the classroom, they have a better chance of succeeding academically. This, in turn, leads to improved school performance and higher graduation rates.

In lockstep with attendance rates, schools often receive funding based on their enrollment numbers. This is generally recognised as a more equitable way to fund state-sponsored schools which often have higher rates of absenteeism.

In some states like California, when students are absent, the school loses out on these funds, as they are typically allocated per student. This means that schools have a financial incentive to encourage regular attendance and minimize absences.

The Relationship Between Student Attendance and Social & Emotional Well-Being

Student attendance is not only crucial for academic success but also for fostering a sense of community within the school. When students attend classes regularly, they have more opportunities to engage with their peers and teachers, building relationships that can positively impact their overall school experience. These connections can lead to a supportive network that enhances students' social and emotional well-being.

Students playing soccer

Consistent attendance plays a vital role in preparing students for future endeavours beyond the classroom. By attending school regularly, students develop important life skills such as time management, responsibility, and perseverance. These skills are essential for success in the workforce and in higher education, highlighting the long-term benefits of prioritizing student attendance.

Understanding the Relationship Between Attendance and School Finances

The impact of student absences on school finances goes beyond just student enrollment numbers.

The Impact of Absenteeism on Grant Eligibility

Even in states that are funded based on enrolment numbers–high rates of absenteeism can also result in reduced funding for specific programs and initiatives over time, as many grants and funding sources require schools to meet certain attendance criteria in order to receive financial support.

Taking Attendance into Account

Some states & school districts employ a funding formula that takes attendance into account. In these cases, schools receive a portion of their funding based on the average daily attendance of students. This means that each day a student is absent, the school loses out on a portion of its funding for that day.

The Hidden Costs of Absenteeism

The financial repercussions of student absenteeism extend to the operational costs of a school. When students are frequently absent, schools may struggle to maintain optimal teacher-student ratios, leading to potential inefficiencies in classroom instruction. This can result in additional costs for hiring substitute teachers or implementing remedial programs to help students catch up on missed material.

Chronic absenteeism can impact a school's overall academic performance and reputation, which in turn can influence enrollment numbers and future funding opportunities. Schools with high rates of absenteeism may face challenges in attracting and retaining students, leading to a potential decrease in revenue from tuition fees or state funding allocations.

Policy Implications: Addressing Absenteeism to Protect School Budgets

The financial implications of student absenteeism are significant and have led policymakers to focus on strategies to address this issue. By reducing absenteeism, schools can protect their budgets and ensure that they have the necessary resources to provide quality education.

Some strategies that have been implemented include improving parental engagement, providing incentives for good attendance, and implementing early warning systems that identify students at risk of chronic absenteeism. Additionally, schools can collaborate with community organizations to address the underlying factors that contribute to absenteeism, such as health issues or transportation barriers.

Parental engagement plays a crucial role in reducing absenteeism rates. When parents are actively involved in their child's education, students are more likely to attend school regularly. Schools can organize workshops, meetings, and events to educate parents on the importance of attendance and provide them with the tools to support their child's academic success.

Incentives for good attendance can take various forms, such as rewards for students with perfect attendance or recognition ceremonies for classes with high attendance rates. These incentives not only motivate students to come to school but also create a positive and supportive school culture that values attendance and punctuality.

Recommendations for Schools to Minimize Financial Losses from Student Absences

While schools cannot eliminate all student absences, there are steps they can take to minimize financial losses. One approach is to implement proactive attendance policies that emphasize the importance of regular attendance and set clear expectations for students and families.

Furthermore, schools can utilize technology to track and monitor attendance more effectively. This can include automated phone calls or text messages to notify parents of their child's absence and provide resources for catching up on missed work.

Join the 'Reducing Absenteeism Group' on Facebook

'Reducing Absenteeism Group' on Facebook

Join this group to connect with other school leaders to share ideas, strategies and stories focused on reducing absenteeism

Providing Support for Chronically Absent Students

Another approach is to provide additional support for students who struggle with attendance. This can involve developing individualized attendance plans, connecting families with community resources, and implementing positive reinforcement strategies to incentivize good attendance.

It is important to recognize that student absenteeism is influenced by a variety of factors.

For example, research has shown that students from low-income families are more likely to experience chronic absenteeism due to barriers such as lack of transportation or unstable housing situations. To address this issue, schools can partner with community organizations to provide transportation services or establish after-school programs that offer a safe and supportive environment for students.

In many cases, focusing on fostering a positive school climate can also contribute to improved attendance rates. When students feel connected to their school community and have positive relationships with teachers and peers, they are more likely to attend school regularly. Schools can promote a sense of belonging by implementing programs that encourage student involvement in extracurricular activities, creating mentorship opportunities, and organizing events that celebrate diversity and inclusivity.

Tying Funding to Educational Outcomes

It's a classic hen and egg situation–schools need funding to be able to deliver quality education and enrol more students. High attendance rates help to ensure that the funding is going towards initiatives that positively impact the student population.

Even in a school district that does not penalise schools based on low attendance rates–student absenteeism still has a direct impact on school finances over time. Many schools rely on funding tied to student attendance, making it crucial to address this issue in order to protect educational resources.

By understanding the relationship between attendance and school finances, policymakers can develop effective strategies to reduce absenteeism and schools can implement recommended practices to minimize financial losses. Ultimately, prioritizing student attendance will not only benefit school budgets but also contribute to improved educational outcomes for all students.

Bonus: 3 Steps You Can Take Today to Reduce Absenteeism at Your School

Absenteeism isn’t just about students missing out on lessons; it's about missing out on the community, the daily interactions, and the unique learning opportunities that each day brings. Addressing absenteeism effectively means getting to the root of why students are absent and creating an environment that makes them want to show up, not just physically, but also mentally and emotionally.

Here are three practical steps you can take today to start turning the tide on absenteeism in your school.

Continue reading


Our gift to you: a free behavior management tool, plus an incredibly useful newsletter

Join thousands of school leaders learning to improve student life. Subscribers receive free access to our behavior management tool, Orah Notes. When you subscribe, you will receive an email with instructions on how to get it set up, as well as an introductory version of the Orah-cle, our monthly newsletter.

Tiago Penteado

I’m from NZ, so I enjoy a good spot of rugby – more recently though, I've been into running as it's a tad kinder to the body. I write, cook & read to relax. At Orah, I'm very excited to contribute to a great mission making a meaningful difference in the lives of students and educators across the world.

Featured articles

Latest Updates to Workflows (May 2024)

Orah schools have been looking for ways to improve their utility in response to student actions, so we’ve made a number of enhancements to help with this.

Product Update

5 Steps You Can Take Today to Reduce Absenteeism at Your School

Discover five practical steps to reduce absenteeism in your school. Join a supportive community, enhance parent-school communication with Orah Connect, and engage in meaningful education with students and parents.


Do Schools Lose Money When Students Are Absent?

Discover the financial impact of student absenteeism on schools and the potential loss of funding.