Cost Estimation

December 2022

Covering the Reduced-Price Meal Co-pay
Sarah Martinelli MS, RD, SNS; Francesco Acciai, PhD; Emily Melnick, MPH, PhD; Punam Ohri-Vachaspati, PhD, RDN

Under current United States Department of Agriculture (USDA) guidelines, Arizona schools participating
in the National School Lunch Program and the School Breakfast Program are reimbursed for the meals
they serve students through federal dollars and co-pays from student families. Reimbursement levels are
based on a three-tiered system (described in Table 1) where the level of reimbursement from the USDA
decreases as the student’s family income-based co-pay, the amount that schools charge families for
meals, increases.
Table 1. Eligibility criteria, family co-pays, and USDA reimbursement by school meal eligibility
category.
Eligibility
Category
Free Meals
Reduced-Price
Meals
Paid Meals

Eligibility Criteria

Family
Co-pay –
Breakfast

Family
Co-pay –
Lunch

USDA
Reimbursement –
Breakfast4

USDA
Reimbursement –
Lunch4

<130% FPL1,2

$0

$0

$2.47

$4.34

131%–185% FPL3

$0.30/meal

$0.40/meal

$2.14

$3.94

$0.50

$0.78

>185% FPL

Set by schools with guidance
from USDA Paid Lunch Equity
Tool

1. FPL= federal poverty level. See 2022 Poverty Guidelines, Office of the Assistant Secretary for Planning and
Evaluation, US Department of Health and Human Services. https://aspe.hhs.gov/topics/poverty-economicmobility/poverty-guidelines
2. $2,379/month or $28,548/year for a family of 3
3. $2,380–$3,386/month or $28,549–$40,626/year for a family of 3
4. Values are for the most recent year published on the USDA website (SY2022-2023), which includes a pandemicrelated increase in per-meal reimbursement of $0.15 for breakfast and $0.40 for lunch. For lunch, the rate for
schools with <60% free or reduced-price meals (FRPM) and >60% FRPM were averaged to get one reimbursement
value. Similarly, for breakfast, the non-severe need and the severe need were averaged.

For this analysis, our goal was to estimate the cost to the State of Arizona if the breakfast and lunch
co-pays for students that qualify for reduced-price meals were covered by the state. In this
scenario, school meals will be reimbursed by the USDA at current levels, but instead of low-income
families paying the reduced-price meal co-pay, the state would cover those costs. This program will
benefit low-income families in Arizona who do not qualify for free meals; for example, those that make
between $28,549–$40,626 per year for a family of 3. The benefits to students, families, and schools of
increased access to school meals have been summarized elsewhere on the Arizona Food Bank Network
website.

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To estimate the cost to the state associated with implementing this policy, we used three pieces
of key information:
1.
2.

3.

The required family co-pay amounts for reduced-price breakfast and lunch that are set by the
USDA ($0.30 and $0.40 respectively).
School meal participation data. We gathered the most recent school meal participation data for the
period not impacted by the COVID-19 pandemic, school year 2018-2019. Given the unprecedented
upheaval of “typical” operations and participation during the pandemic, the selected school year was
believed to be the best representation of usual school meal participation.
Data on expected changes in meal participation rates when free meal eligibility is expanded,
based on published research studies.

Using previously published data,3-6 we estimated three different participation scenarios. Each scenario
provides a slightly different estimation of how many additional meals are expected to be served as a
result of reduced-price meals becoming free to students. Based on these estimates, we anticipate that
11-17.5 percent more students eligible for reduced-price meals will participate in school lunch and 9-21
percent more will participate in school breakfast. To calculate the cost if co-pays were to be covered by
the state, we multiplied the total number of breakfast and lunch meals that will be served in the reducedprice category, which includes current participation and the estimated increase in participation, by the
corresponding co-pay amounts. Three estimated costs are provided in table 2 and range between
$4,414,351 to $4,645,000 per school year, with the average of three estimates being $4,465,416. We
also present estimates for the additional number of breakfast and lunch meals projected to be served to
low-income students. Everything else being equal, the meals within this category are expected to
increase from 7.9% to 8.6% of all breakfast meals served and from 10% to 11% of all lunch meals
served.
Table 2: Estimates of cost and number of projected additional meals served per year if Arizona
were to provide free school meals to children in the reduced-price eligibility category.1
Additional Meals Served to
Total Meals Served to Students Annual Cost for All Meals Served in
Students in the Reduced-price
in the Reduced-Price Category2
the Reduced Price Category3
Category
Breakfast Lunch
Total Breakfast Lunch
Total
Breakfast
Estimate 1
497,979 851,187 1,349,166 3,710,747 8,252,816 11,963,563 $1,113,224
Estimate 25,6 674,681 1,295,285 1,969,966 3,887,449 8,696,914 12,584,363 $1,166,235
289,149 814,179 1,103,328 3,501,917 8,215,808 11,717,725 $1,050,575
Estimate 37
4

Lunch
Total
$3,301,127 $4,414,351
$3,478,766 $4,645,000
$3,286,323 $4,336,898

Notes and Citations
1.
Participation estimates do not consider schools that participate in the Community Eligibility Provision (CEP) as
those schools are already able to offer free school meals to all of their students and are federally reimbursed for
those meals using a different funding model.
2.
Includes projected additional meals and current meal participation level in the reduced-price category.
3.
Projected costs include the cost of co-pays for all meals served in the reduced-price meal category, including
projected additional meals.
4.
Estimate 1: Estimated increases in participation were informed by a national sample of elementary and middle
schools, data were collected between 2013-2015. Tan et al. 2020.
5.
Estimate 2: Estimated increases in participation for breakfast were informed by the free breakfast program in
NYC. Data was collected from elementary and middle schools from 2001-02 to 2007-08. Leos-Urbel et al., 2013
6.
Estimate 2: Estimated increases in participation for lunch were informed by a USDA report published in 2016.
7.
Estimate 3: Estimated increases in participation were informed by a USGAO report that examined 5 states and 35
districts that removed the reduced-price category. Brown, K., 2010.

chs.asu.edu
Updated Jan 2023