This paper examines the cost effectiveness of educating boarding and day secondary students in Kisumu district in Kenya. The research designs used in this study were descriptive survey and casual comparative designs. The population consisted of five head teachers, 140 form four teachers and 609 form four students. Saturated and systematic random sampling techniques were used in the study. The sample size was as follows: five head teachers, 46 form four teachers and 201 students which are 33% of the population for the teachers and the students. The main findings were as follows, the total direct social cost of educating a day and a boarding student per year was Ksh 62, 193 and Ksh74, 140 respectively. The day student performed better than the boarding student with a mean of 8.12 and 7.27 respectively. The boys performed better than the girls with a mean of 8.01 and 7.27 respectively. The cost effectiveness ratio (CER) for the day and boarding student was Ksh7, 748 and Ksh10, 005 respectively. This means that to improve the performance of a day student by one point requires Ksh 7,748 compared to Ksh10, 005 required by a boarder. It can be concluded that educating a student in day secondary school is more cost effective and more efficient way of using scarce resources.