From what table does this data come? The table that is the basis of your report layout or a related table. My best guess is that the report layout is based on a table of students and their teacher assignments come from a related table. In that context, a field from the related table will show data from the "first" related record. Unless you specify otherwise, this will be the original related record--the record for the teacher that was first assigned to that student.
But you can go into Manage | database | Relationships, find and double click the relationship line and then specify a sort order for the related records that sorts them into a descending order by a serial number field or auto-entered timestamp field to make the most recently added record the "first" related record.
I followed your suggestion because the scenario you describe is right. After adding the sort in the relationship, the class list sort showed the child's name in the correct classroom. Now the strange thing is that it still separates the 2 students in the same classroom, into 2 separate class lists, meaning there are 2 actual pages with one student name on each, even though they are both in the same classroom. The subtotal fields the layout has are 2, using classroom number and grade level to sort. All other class list are showing fine, except this one class. The sort field I'm using in the relationship is the enter date of the student into the current teacher's classroom, which is different than the one the other student has.
Any ideas? I continue stumped.
I'd need to see a much more detailed description or screen shot of the layout design. (If you take a screen shot, take it while in layout mode.)