Elimination of Reduced-Price Breakfast and Lunch Costs
The 89th Texas Legislature is providing funding that reimburses schools for serving breakfasts and lunches to reduced-price eligible students for free. This funding is available for breakfasts served for the entirety of School Year 2025-2026 and 2026-2027.
Reimbursement for lunches served to reduced-price eligible students will not begin until September 1, 2025, and will continue through the entirety of School Year 2026-2027.
Please review the following questions for guidance and instructions on how to participate.
1. Why is funding available for reduced-price breakfasts for the entirety of School Year 2025-2026, but funding for reduced-price lunches is not available for lunches served prior to September 1?
Funding for reduced-price breakfasts was already allocated through August 31, 2025, via previously passed legislation. The additional funding for reduced-price lunches was only enacted in the most recent legislative session and is not available until September 1, 2025.
2. Must we charge students for reduced-price lunches served during August?
No. School districts may elect to serve reduced-price lunches for free in August using Child Nutrition Program (CNP) funds or other sources to offset the costs of the meals. Conversely, schools may charge up to $0.40 maximum per lunch during August if CNP funds are not available to implement this program in August. Note that these prices must be communicated to families.
3. How much is the per-breakfast and per-lunch reimbursement?
For each reduced-price breakfast claimed during SY 2025-2026 and SY 2026-2027, schools will be reimbursed the amount they would have normally charged students for reduced-price breakfast as indicated in the school’s site application, up to a maximum of $0.30 per meal.
Beginning for lunches served on September 1, 2025, and continuing through the end of SY 2026-2027, schools will be reimbursed the amount they would have normally charged students for reduced-price lunch as indicated in the school’s site application, up to a maximum of $0.40 per meal.
4. What are the allowable uses of this State-provided reimbursement?
Reimbursement provided by the State to offset the costs of eliminating reduced-price breakfast and lunch is considered program income and thus must accrue back to the nonprofit food service account. The same regulations and restrictions that apply to money received from a paying student also apply to this State-provided reimbursement.
5. If my school was planning to charge less than $0.30 for reduced-price breakfast and/or less than $0.40 for reduced-price lunch, can I increase my price on the site application to receive the maximum reimbursement?
Yes. Keep in mind that the money received as a reimbursement must accrue to the nonprofit food service account. If you were charging lower prices or already planning to serve reduced-price meals for free to reduce an excess fund balance, consideration should be given before adjusting prices upward within the application.
6. If my school was already planning to offer breakfasts and/or lunches for free to reduced-price-eligible students and has no interest in receiving money from the State to offset costs, can we opt out?
Yes. The supplemental reimbursement for reduced-price breakfasts and lunches is based on the price listed in the site application. If you do not wish to receive this State-provided reimbursement for reduced-price breakfasts and/or lunches served for free, simply list $0.00 for the cost of the applicable reduced-price meal(s) within the application.
NOTE: Unless you operate a school mandated to offer Universal Breakfast for free to all students (see next question), if your site application shows $0.00 in the site for any meal at the time reimbursements are processed, TDA will not provide reimbursement for those meals, and payments will not be retroactively issued for rates entered in error and effective the date that reimbursements are issued.
7. If I am offering Universal Breakfast to ALL students, either through a mandate from the State or by choice, am I eligible to receive this reimbursement?
Yes. However, schools offering Universal Breakfast (breakfasts served free to all students) must continue to show $0.00 for both the paid and reduced-price costs within the site application, as TX-UNPS will not allow a listed reduced-price cost to exceed the price of a paid breakfast. TDA will automatically provide $0.30 per reduced-price breakfast claimed to all schools offering Universal Breakfast, either through mandate or by choice.
NOTE: Only schools mandated to offer Universal Breakfast should list $0.00 in the site application for breakfast if they wish to receive the additional reimbursement. All other schools will be reimbursed based on the rates entered in the site application.
8. Am I allowed to continue as normal and charge students for reduced-price breakfasts?
No. If you wish to accept money to offset the costs of reduced-price meals, you must not charge students for these meals and instead accept the money available from the State. The 2025 Texas Legislature appropriated state funds to provide free breakfast to qualified students who otherwise would have been charged a reduced price. Consistent with legislative direction, TDA will automatically reimburse schools based on the prices listed on the site application. Districts must not charge for these meals to avoid unallowable double reimbursement.
9. If my school is operating the Community Eligibility Provision (CEP) or Provision 2, is it eligible for this reimbursement?
No. Schools that elected to operate under a special provision are already serving all meals for free and are thus not entitled to the State-provided reimbursement.
10. How should I adjust student eligibility status and meal pricing within my Point of Service (POS) system once I start offering meals for free to reduced-price eligible students?
It is very important that your POS is identifying each student based on their determined eligibility status – free, reduced, or paid. Do NOT change the status of reduced-price students to free. However, to avoid clerical errors or inadvertent negative balances, you must ensure that the price of all reduced-price meals is listed as $0.00 within the POS, even though your site application will still reflect the amount you would have normally charged for a reduced-price meal.
11. How will the elimination of reduced-price breakfast and lunch costs affect counting, claiming, and the standard federal reimbursement?
Counting and claiming will not be affected. As noted above, all meals served to students must be claimed based on each student’s respective eligibility status. TDA will process claims as normal within the regulatory timeframes. The State-provided reimbursement will be processed separately from the federal reimbursement and will be distributed 60 days after each claim submission.
12. What are the notification requirements to parents about the availability of free meals for reduced-price-eligible students?
The Eligibility Determination templates on SquareMeals that are sent to the families of reduced-price-eligible students allow districts to enter the cost of the reduced-price meal. If offering reduced-price breakfasts and/or lunches for free the entire year, simply enter a cost of $0.00.
If charging students for reduced-price lunches in August at the beginning of SY 2025-2026, you will need to modify the template to indicate the different prices for August and the rest of the school year.
If you have already sent out eligibility letters that do not reflect the availability of no-cost reduced-price meals, you do not need to send out another eligibility determination letter, but you must still notify the families of the price change via new correspondence.
13. How do CEs identify the Reduced-Price Breakfast and Lunch Payments when received?Schools eligible for Reduced-Priced Breakfast and Lunch State GR match payments will receive monthly payments issued by TDA (agency # 551). You can check the Comptroller’s website for your payments.
- The invoice description for the Reduced-Price Breakfast State GR matches will indicate “RP-SBP School Name.” The invoice number will indicate RP-SBP Claim Month/Year CE ID#
- The invoice description for the Reduced-Price Lunch State GR matches will indicate “RP-NSLP School Name.” The invoice number will indicate RP-NSLP Claim Month/Year CE ID#
Acronyms:
RP = Reduced Price
SBP= School Breakfast Program
NSLP= National School Lunch Program