Just as with this forum's text, a single enter (return) after "cross dorm parent." should give you this result (a new line, not a new paragraph). Two enters (return return) after "to this school!"" will give you a new paragraph. New lines should not have extra added space around them.
I think that isn't exactly true. I can say also that my visual editor is acting a little silly since 2.6.2. Adding paragraphs and line breaks in strange places but only after the post is saved or published. It will not edit them real time if you switch views between visual or html, but it does insert a paragraph tag for me after only pressing enter once.
The proper way to do this would be using SHIFT + ENTER to only go down one line, at which point the visual editor should insert a BR.
I hope that makes sense and helps a little? I find that it does help to have a basic knowledge of HTML for situations like this, when the visual editor doesn't play 100% nice.