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Why Have Some Districts Recently Announced Free School Meals? Understanding CEP

Authored by: Lisa Good, MBA | Vice President of Business Development

Reading Time: 3.5 minutes

With the new school year approaching, many districts have announced free meals for all students, primarily thanks to the Community Eligibility Provision (CEP). This has raised the question from parents, board members, and community leaders in districts nationwide, “Why aren’t we offering free meals, too?” Let’s quickly look into what CEP is, what it means for schools, and why it may or may not be a viable option for your district.

What is CEP?

CEP, or Community Eligibility Provision, is a federal program that allows high-poverty schools and districts to offer breakfast and lunch at no cost to all students without the traditional collection of free and reduced-price meal applications. At first glance, it appears fantastic, but it’s necessary to recognize how schools qualify and the financial implications of participation.

How Does a School Qualify for CEP?

First, it’s important to note that CEP is not supported by state or local funds. It is a USDA child nutrition program funded through federally budgeted tax revenue. CEP is similar to other more common programs such as the National School Lunch Program (NSLP), School Breakfast Program (SBP), etc.

 

A primary difference with CEP is that special eligibility is required for a school or district to participate, being based on the percentage of students who are Directly Certified for free meals through programs such as Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and others. These are called Identified Students. To qualify, a school or district must have an Identified Student Percentage (ISP) of at least 25% of the total student population. Of note, while CEP is a long-standing program, it’s become a trending topic since the minimum ISP has been recently reduced from its previous level of 40%, qualifying many more districts to participate in the CEP.

 

Example:

A school with 250 Identified Students out of 1,000 Total Students has an ISP of 25%.

A school with 500 Identified Students out of 1,000 Total Students has an ISP of 50%

Who’s Paying for the Meals?

In traditional programs like NSLP and SBP, schools report how many meals are served to students qualified as Free, Reduced, and Paid, respectively. They are then reimbursed at separate rates for the meals that fall in each category. For school year 2024-25, those rates are $4.43-4.45 per Free meal, $4.03-4.05 per Reduced meal, and $0.42-0.44 per Paid meal.

If participating in CEP, schools are instead reimbursed based on the number of total meals served. However, only a portion of that total is reimbursed at the Free rate. This is calculated by multiplying a school’s ISP by 1.6. This 1.6 multiplier is meant to correct any students who were not identified using Direct Certification but who would have qualified based on household income if applications were being accepted. All remaining meals would be reimbursed at the Paid rate.

Example:

A school with an ISP of 25% would have 40% (25% * 1.6) of its total meals served reimbursed at the Free rate, and the remaining 60% would be reimbursed at the Paid rate.

 

A school with an ISP of 50% would have 80% (50% * 1.6) of its total meals served reimbursed at the Free rate, and the remaining 60% would be reimbursed at the Paid rate.

The Financial Viability of CEP

Even with meeting minimum eligibility requirements, careful financial analysis of individual schools and districts is necessary to determine if participating in CEP is sustainable. Those with a higher percentage of Identified Students will undoubtedly see a financial advantage over those closer to the minimum 25%.

 

Example:

A school with 1,000 students participates in CEP. Their ISP is 25%. They serve 700 lunches on a given day. They are reimbursed for 280 meals at $4.45 and for 420 meals at $0.44. A total of $1,430.80 for that day.

 

A school with 1,000 students participates in CEP. Their ISP is 50%. They also serve 700 lunches on that given day. They are reimbursed for 560 meals at $4.45 and for 140 meals at $0.44. A total of $2,553.60 for that day.

 

It doesn’t take an AP student to see the $1,100-plus difference in just one day’s sales of the same number of lunches served between two CEP schools with the only difference being their ISP.

Why It Might Not Be Viable for Our District

While every school or district’s financial situation is unique, it doesn’t take an account to see the $1,100-plus difference in just one day’s sales of the same number of lunches served between two CEP schools, with the sole difference being their ISP.

 

Administrations and treasurers need to conduct these necessary analyses to determine if participating in CEP could negatively impact their budget with a potentially significant loss of revenue from paid meals.

Conclusion

While the idea of free meals for all students is generally appealing, the financial realities and long-term sustainability must be considered. By educating families and community members, we hope to raise understanding and support for the decisions that best meet the needs of all students in each district.

 

If you’ve enjoyed this article, why not take a moment to follow i3 Education on social? We provide priceless content regarding K-12 nutrition program operations and can be found on Facebook, Twitter, and LinkedIn.

 

Lisa is the Vice President of Business Development for i3 Education, with over fifteen years of experience in K-12 nutrition.

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