This study compared the cost and effectiveness of residential schools for students with hearing and visual impairments to the education of these students in Mississippi's local public school districts. To compare the service providers, the study first calculated annual costs per student at the residential schools and per student with hearing and visual impairments in the local school districts statewide. The study then examined benefits provided by residential education and compared them to those provided by the districts. Findings indicate that at a FY 1999 cost of $42,500 per student, it cost $34,700 per year more to educate a student at the residential schools. Factors contributing to the high costs of operating the residential schools include unique cost components not present in local school districts (e.g., operating and staffing dormitories); allocation of other costs among fewer students; and expansion of a pre-vocational program with costly capital facility and specialized staffing needs. Despite the disparity of per-student cost between the residential schools and local school districts, the study found no conclusive evidence of greater benefits from a residential education. In comparing the two, the study found no appreciable difference in teacher qualifications, educational requirements, educational outcomes, or extracurricular activity requirements. (CR)