Fraud in School Lunch Program Not Just About Free Lunches

Education Next News Alert

For Immediate Release: November 18, 2009

Contact: David Bass,

STANFORD – In a time of penny pinching inspired by tight state and local education budgets, investigative reporter David Bass warns that taxpayers are picking up the tab for a large number of ineligible students who participate in the federal school-lunch program because the process for verifying eligibility for the program is fundamentally broken. Even more problematic may be the effect on school funding formulas, on research, and on accountability measures of misidentifying these students as poor. Bass’s findings appear in “Fraud in the Lunchroom,” in the forthcoming issue of Education Next, which is now available at

The federal government’s National School Lunch Program (NSLP) serves 31 million American children each day a free- or reduced-price lunch, at an annual cost of $8 billion.  Parents who apply for school lunch benefits report their yearly income on the application, and no proof of income is required, but school districts are required to try each year to verify the incomes of 3 percent of participants considered “error prone,” meaning households whose reported incomes are very close to the income eligibility limitation.

According to Bass, verification summaries obtained from 10 of the nation’s largest school districts show a high percentage of those asked to provide proof of income could not or would not comply. Of the 10 districts, all but one had a rate of reduced or repealed benefits above 70 percent (for those in the verification sample for the 2007-08 school year). Most of the benefit reductions and repeals were due to participants’ failure to respond to the mailing, which automatically revoked their benefits.

Determining the extent of program fraud and error is important, as the entitlement is associated with other streams of federal, state, and local taxpayer dollars, Bass notes. Eligibility data are widely used as proxies for poverty rates, thereby influencing funding for myriad government programs and informing both school district policies and policy research. For instance, NSLP participating rates serve as the main criteria for the allocation of federal Title I funds to schools. State governments and school districts also dole out extra funds to schools according to free- and reduced-price lunch percentages.

According to Bass, accountability systems and research may also be affected if the lunch program data are not a valid indicator of socioeconomic status. The National Association of Educational Progress (NAEP) uses the scores of students eligible for the lunch program to track the performance of states in educating low-income children over time, and No Child Left Behind requires that schools meet performance benchmarks for program-eligible students in order to make adequate yearly progress. Academic researchers also make use of NSLP participation data, raising the question of whether researchers could be producing skewed results if program participation is not a reliable indicator of income.

Read “Fraud in the Lunchroom?” available online at

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