Proposed Changes in Reconciliation Bill Would Expand Universal Free Meals but Might Complicate K–12 Funding
The proposed Build Back Better Agenda would lower the eligibility threshold for schools to provide free meals to all students, regardless of household income and without school meal applications. Under this proposed change, many more schools would be able to offer universal free meals, but because of how schools measure poverty, it would become more difficult for policymakers to target funding to high-need schools.
In addition to increasing participation in school meals, universal free meal programs have academic (PDF) and social benefits for students, including improvements in disciplinary outcomes (PDF) and perceptions of bullying, fighting, and safety (PDF).
But because several states use the number of students eligible for free or reduced-price lunch (FRPL) as a proxy for the number of low-income students, increasing the availability of free lunch under the Community Eligibility Provision (CEP) decreases the quality of FRPL data. Although states are increasingly using administrative data on social safety net use—or other measures—in place of FRPL data, several states still use FRPL data in their funding formulas.
Lowering the threshold would substantially increase the share of schools eligible for CEP
Under the current CEP, the option to provide free meals to all students is available to a school, a group of schools, or a district that has an identified student percentage (ISP) of 40 percent or more. The ISP is the share of students identified as eligible for free meals through their household’s participation in programs such as the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF) or who are categorically eligible, including those classified by the school as homeless, runaway, or in foster care, depending on the state.
The new bill would expand eligibility for CEP by lowering the ISP threshold from 40 percent to 25 percent. This means a school where at least 25 percent of students’ families participate in SNAP or TANF, 100 percent of students would be eligible for free meals.
Thirty states rely on a measure of the share of students eligible for FRPL as a proxy for schools serving a high share of students from low-income households. Because CEP eliminates the administrative burden of collecting FRPL forms and therefore complicates the accuracy of the FPRL measure, the CEP expansion has eroded the value of FRPL as a measure of poverty. Without knowing where students from low-income households attend school, it is difficult for policymakers to target need-based funding to the right schools and districts. With two years of universal free meals because of the pandemic and a potential expansion of free meals under the budget resolution bill, finding new measures for student economic disadvantage is more important than ever.
Using 2020–21 data from the Food Action & Research Center, we look at eligibility if schools participated only based on their individual, school-level ISP. Across the states for which we have data, we find that lowering the ISP threshold from 40 percent to 25 percent increases the share of schools individually eligible to provide universal free meals by about 24 percentage points.
Under current rules, schools with an ISP below 40 percent can participate if they are included in a district, or group of schools, with a combined ISP of at least 40 percent. Six of the 22 states we examine are already providing universal free meals to a larger share of schools than are individually eligible, likely relying on this grouping mechanism.
In contrast, some states haven’t fully expanded CEP to all schools eligible at the 40 percent level. Six states have a school-level participation rate at least 10 percentage points lower than the percentage of eligible schools. Lower participation may be because schools with ISPs between 40.0 and 62.5 percent are not fully federally reimbursed for all meals, so some schools may take on additional costs by transitioning to CEP.
Three additional provisions in the budget resolution bill are likely to expand school eligibility further. First, the bill increases the previous 1.6 reimbursement multiplier to 2.5, meaning schools with ISPs as low as 40 percent would be fully reimbursed for all meals served at the federal rate. Second, the bill allows all states to link to data on students from households participating in Medicaid, which will likely increase the ISP of schools (PDF). Third, the bill gives states the option to provide universal free meals statewide, if states commit to picking up the remainder of school districts’ tabs for costs not reimbursed by the federal program.
In response to these proposed changes to CEP, state policymakers have many options when considering a new measure for funding students from low-income households, both in the data they use and in how they implement these data in a funding formula.
For example, in selecting new measures, policymakers could consider using administrative data, such as direct certification or other linked state datasets, or survey-based census data. And in funding formula implementation, policymakers could use a per pupil weight, group schools by economic need, or use an additional “concentration” weight for schools with high shares of students from low-income families.
Adopting a measure of student poverty that does not hinge on school meal applications would allow states to prioritize getting free meals to all students without the fear of losing data that helps target resources for low-income students.
The Urban Institute has the evidence to show what it will take to create a society where everyone has a fair shot at achieving their vision of success.
CHATTANOOGA, TENNESSEE - OCTOBER 2ND: The cafeteria during lunch at the East Brainerd Elementary School (Washington Post/Getty Images)