Three out of five charter schools are failing to meet minimum enrolment targets, however, the Education Minister says there was still demand for the institutions.
Education Minister Hekia Parata told Radio New Zealand it was still early in the year and figures might improve.
"These schools are maybe five students below their guaranteed minimum in their first year and we are only just half way through the year.
"Two of the schools are over their guaranteed minimum but no-one's implying to them that they are a failure."
She said from the outset this model of school was always meant to be small and "niche".
Asked if she could justify funding to charter schools, which was $30,000 to $40,000 per student, Ms Parata said it was a "gross misuse of the figures".
"What's included in that is the capital expenditure required to start up the school, if we took that same approach to every new school and divided the cost of the building as well as their operating grant between the day one roll we would get figures like that as well."
However she told RNZ she could not give a more accurate per student average, as charter schools were funded in a different way to state schools.
"To say there is one average across 840,000 children and young people we should use is misleading."
The Herald reported some of the problems at Te Kura Hourua ki Whangaruru back in June.
But Ms Parata said it was still early days.
The school opened in February.
"Over half of their starting roll is at school, parents are supporting the school, they do have a curriculum...
This is having some effect but it is still in its early days."
Ms Parata said students from the school were on the margin, but the school's purpose was to re-engage them in education.
"These are kids who have had drug problems, these are kids who have been absent from schools, these are kids who are on the margin.
"But what's the alternative? To have these kids become another statistic in the justice system, or in the social welfare system?"
Labour's Education spokesman Chris Hipkins said Ms Parata's claims were an indictment on her own performance as minister and the policies of the current National government.
He said the suggestion that the alternative to at-risk children attending charter schools was jail were "disgraceful".
"It speaks volumes that the current Minister of Education has so little faith in our state schools she thinks the only way to cater for the most at-risk kids is to take them out of the school system and put them into an environment where they've been found to be constantly absent."