In this paper we consider the challenges involved in evaluating teacher preparation programs when controlling for school contextual bias. Including school fixed effects in the achievement models used to estimate preparation program effects controls for school environment by relying on differences among student outcomes within the same schools to identify the program effects. However, identification of preparation program effects using school fixed effects requires teachers from different programs to teach in the same school. Even if program effects are identified, the precision of the estimated effects will depend on the degree to which graduates from different programs overlap across schools. In addition, if the connections between preparation programs result from the overlap of atypical graduates or from graduates teaching in atypical school environments, use of school effects could produce bias. Using statewide data from Florida, we show that teachers tend to teach in schools near the programs in which they received their training, but there is still sufficient overlap across schools to identify preparation program effects. We show that the ranking of preparation programs varies significantly depending on whether or not school environment is taken into account via school fixed effects. We find that schools and teachers that are integral to connecting preparation programs are atypical, with disproportionately high percentages of Hispanic teachers and students compared to the state averages. Finally, we find significant variance inflation in the estimated program effects when controlling for school fixed effects, and that the size of the variance inflation factor depends crucially on the length of the window used to compare graduates teaching in the same schools.