Compare CEP, Provision 2, and Non-Pricing

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CEP vs. Provision 2 vs. "Non-Pricing"
Kids eating school breakfast around a table

School districts have several school meal funding options for implementing universal free school meals, including the Community Eligibility Provision (CEP), Provision 2, and locally funded universal free meals (“non-pricing”).

Every student deserves access to healthy food every day, and offering students meals at no cost to them, often referred to as universal free school meals, is a great way to make that happen.

Provision 2 of the National School Lunch Act enables any school to provide free meals to students. There are no eligibility requirements under Provision 2 as there are with CEP, and also unlike CEP, you can choose to offer universal breakfast and/or lunch. Provision 2 dropped in popularity as a universal free meal funding option after CEP became available nationwide in SY14-15 because Provision 2 has a higher administrative burden requirement. Provision 2 schools still have to distribute and collect school meals applications in year 1, or the "base year," of the 4-year cycle. In this base year, Provision 2 schools serve free meals to all students but count and claim meals by fee category. In years 2-4, schools receive reimbursement based on the percentage of meals served in each fee category during the base year.

When might Provision 2 be a better option than CEP? When a school's free and reduced-price (FRP) student percentage is significantly greater than a school's ISP, Provision 2 may yield a higher financial return than CEP. This phenomenon is more common in areas where there is stigma associated with receiving public benefits like SNAP, or fear of participating in programs like SNAP, often out of fears for negative impacts on immigration status. In these situations, a school's base year percentages for reimbursement at the free, reduced-price, and paid categories may yield a greater financial return than the reimbursement rates set by the school's comparatively lower ISP. For example, if a school has an ISP of 50%, it will receive 80% of the meals it serves at the free rate and 20% at the paid rate under CEP. However, if that same school's average daily participation (ADP) in school lunch is 78%, 15%, and 7% for participation in free, reduced-price, and paid categories, respectively, it may be more financially viable to operate Provision 2. When considering the reimbursement generated by the 15% of participants in the reduced-price category, 93% of the meals served at this school would be reimbursed at or near the highest reimbursement rate, while only 7% will be reimbursed at the significantly lower "paid" rate. Compared with 20% of meals being reimbursed at the "paid" rate under CEP, Provision 2 may be a better option for this school.

Non-pricing is another funding option for universal free school meals where schools have funding support from the local government, school board, or private sources. Meals are served free to all students, and meals are counted and claimed by fee category. The difference between federal reimbursement and program costs would have to come from non-federal funding.

For a more in-depth comparison chart, view our resource "Providing Universal Free School Meals."

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CEP
Boys eating breakfast in the classroom

Providing Universal Free School Meals

Compare three options for providing universal free school meals: the Community Eligibility Provision (CEP), Provision 2, and non-pricing.

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