Unfortunately, that's a built in limitation of SubSummary reports. You could put a very large portal to teachers on a schools layout and set it to slide up. As long as your portal has more rows than the largest possible list of teachers for a given school, it can work though page breaks can get pretty ugly and the report only looks right in preview mode or when you pdf/print it.
Thanks. I thought I was missing something. I did try the portal solution but the large variation in the number of teachers per school took up too much space. How do I set a portal to slide up?
In filemaker 11, you can find this in the Inspector. In older versions, this is an option called sliding/printing found in the layouts menu.
In both cases, this option is available when you are in layout mode. You'll want to select "slide up", and "Also resize enclosing part" (Older versions word it slightly different).
Any layout objects along side or below the portal will also need to have the same settings.