Millions of children rely on free school breakfasts and lunches daily. The Community Eligibility Provision (CEP) is a federal program that allows schools to serve meals to all students at no cost. But CEP’s traditional funding structure and changes in the eligibility threshold significantly affect whether schools join or can afford to stay in the program. This report explores how a decade of policy shifts, data-matching systems, and state investments have altered school meal participation and affected local school district budgets.

Why This Matters

Students having access to nutritious food directly affects their health and ability to learn, and research shows how universal free meal programs improve student test scores, school climate, and discipline rates. This research provides evidence on how CEP’s structure affects participation decisions among eligible schools and districts.

What We Found

• Lowering eligibility rules is not enough. In late 2023, the federal government lowered the threshold for schools to qualify for universal free meals. But only 7 percent of newly eligible schools adopted the program in the first year because low federal reimbursement rates made it financially difficult.
• Medicaid data matching boosts participation. States that automatically enrolled students using Medicaid data saw school eligibility metrics jump 6 percentage points, on average. This data matching added an average of 271 participating schools per state.
• The program increases overall funding. School districts that adopted universal free meals saw local meal revenue drop, in line with the loss of paid meals. But federal funding increased by an average of $42.48 per pupil, completely offsetting local losses.
• Rural schools face the steepest hurdles. Town school districts saw the highest financial feasibility from the program. Meanwhile, rural districts faced the highest initial operating costs and the smallest, least predictable budget gains.

Policy recommendation: If the goal is to increase participation in CEP, federal policymakers will have to consider changing the reimbursement structure of CEP, rather than just lowering eligibility thresholds, particularly for low-ISP but eligible schools and rural schools to bridge financial gaps. States can also decouple education funding formulas from the National School Lunch Program measures of student poverty so as not to create competition between the two.

How We Did It

We created and analyzed a comprehensive national dataset tracking school participation in the universal free meal program across more than a decade. We compared eligible schools that adopted the program against those that did not. Finally, we evaluated federal and local financial data to measure the program’s impact on school food service revenue and expenditures.