The Community Eligibility Provision (“CEP”) program has become an increasing popular way for schools in lower income areas to ensure that all of their students have free access to a healthy breakfast and lunch on school days. With CEP applications currently due by June 30th, and with schools in most states no longer providing free meals under COVID relief programs, as was the case during the COVID years, now is a good time to consider the benefits of CEP and changes that are being proposed at both the federal and state levels.
E-rate specifics aside, we want to stress that E-Rate Central is a strong proponent for school adoption of CEP wherever possible. The ability to provide free and healthy school meals to all students, independent of family income, is physically and socially beneficial for all. As currently structured, CEP is usually financially and administratively beneficial to participating schools.
Under current rules, any school or group of schools are eligible to participate in CEP if they can identify, largely from state databases of financial assistance programs, at least 40% of their students whose families qualify for SNAP, Medicaid (in most states), Head Start programs, etc. If those schools provide breakfast and lunch to all their students, the schools are compensated for those meals at the rate of the Identified Student Percentage (“ISP”) times 1.6. That compensation rate is capped at 100%. Even if the compensation rate is less than 100%, the schools generally realize offsetting administrative savings by avoiding other costs incurred of administering a family-surveyed National School Lunch Program (“NSLP”). For E-rate purposes, the (ISP x1.6) percentage is treated as an equivalent NSLP percentage for E-rate discount purposes.
The social benefits of CEP are so strong that the U.S. Department of Agriculture (“USDA”) is currently considering a proposal to lower the ISP threshold for CEP participation from 40% to 25% while retaining the 1.6x multiplier factor for meal reimbursement purposes. As noted below, comments on the USDA proposal are due May 8th. We fully expect this proposal to be adopted, perhaps in time (with an extended CEP enrollment deadline beyond June 30th) for the 2023-2024 school year.
On a state-by-state basis — and potentially in the future for all states — we’re seeing a move to provide free meals for all students as was the case during the COVID years. The following chart shows the current status of Healthy School Meals for All (“HSMFA”) legislation nationwide. Such legislation has already been permanently enacted into law in five states, is going into place for this year or next in four other states, and is being seriously considered in a number of other states.
Courtesy of FRAC, the Food Research & Action Center (frac.org)
E-rate applicants in states providing free meals for all will need to consider how they will document NSLP percentages for discount rate purposes. This information will also be required to determine how meal costs will be shared with the states picking up expenses not covered under the federal National School Lunch Program. In most states, this would mean:
- CEP schools will continue to rely on their ISP percentages and the 1.6x multiplier.
- Non-CEP schools may have to calculate NSLP percentages via parent applications that, in a free meal environment, there is little incentive for the families to complete.