The evaluation of schools’ quality in America depends on the individual student scores and average school scores. Individual student scores are subject to measurement errors, which make them incapable of reflecting each student’s competence. The flaws cause misclassification when cutoff scores are employed to assess the students’ capacity to meet the minimum level of proficiency. Besides, the students’ family background, peers, and innate abilities affect the school’s contribution to learning. Schools have little or no influence on these factors and impact the average of smaller schools more than that of the larger institutions. Therefore, test scores are not the right indicators of the level of competency of schools.