In the past, federal administrators from the National School Lunch Program have argued the program has little potential for abuse because “the worse that happens is a kid gets a free lunch.” But that’s not the case. Billions of dollars in federal funds are allocated on the basis of the lunch program’s enrollment figures, which the U.S. Department of Education now says are in error, with one in five participants being ineligible because their family income is too high.
Last year, about 13 million children received free meals from the federal free or reduced-price lunch program, with another 2.6 million paying up to 40 cents for a reduced-price meal. But studies done by Mathematica Policy Research show the program’s enrollment was 5 percent higher than it should have been in 1994, 23 percent higher in 1998, and 27 percent higher in 1999. Congress was recently informed about the soaring error rate by Eric M. Bost, undersecretary for the U.S. Department of Agriculture’s Food, Nutrition, and Consumer Services.
Although a one-in-five payout error means more than $1 billion a year of the lunch program’s $5.5 billion budget is being mis-spent on ineligible families, the error compounds to mis-allocate resources in many other programs.
The school lunch participation numbers are used to distribute $10.4 billion in Title I state grants, plus literacy and reading grants, and vocational/technical education funding. They also are used to determine a district’s discount on E-rate technology upgrades. Students in the lunch program also may be granted waivers for other school fees and after-school care. And teachers in schools with high lunch program participation levels can get their college loans forgiven.
Reason magazine’s Lisa Snell raises another concern with the lunch program’s inflated enrollments: They have serious implications for school reform decisions, by making reforms directed at children in poverty appear to be much more costly than they would be in reality.
For example, Snell notes, when President George W. Bush and several policy groups last year proposed “voucherizing” Title I spending and allowing the Title I money to follow the individual child out of failing public schools into better-performing private or public schools, the financial implications of the proposal were daunting. If every Title I child received a voucher, it would have cost billions more than current Title I spending levels. As a result, says Snell, the voucher plan for Title I students was “dead on arrival.”
“However, if up to 20 percent of the students who qualify for Title I based on their free and reduced-price lunch status are actually ineligible, this leaves a much lower number of students who need vouchers to exit low-performing schools,” she points out.