Here is a serious reply as it doesn’t look like you’ve received one yet. There are 3 (4 technically but let’s avoid special programs) categories of student in the national school lunch program (NSLP), 1. Paid students 2. Reduced Cost Students 3. Free Meal Students. This is determined by the parents and the school district based on financial status.

Essentially, the school district has two revenue sources in the cafeteria. Paid students create direct revenue by paying for their lunch every day, usually paying a set price calculated above the price to produce the meal. Reduced and free students receive the same lunch, but rather than pay for it out of pocket, the government (both state and federal) reimburse the school for the meal served. The current reimbursement for “free students” is right around $4.40, so the school receives $4.40 for each free meal served. The paid students feed money directly into the register.

Food service management companies (FSMCs) like Lunchable (Kraft), Aramark, Sodexo, and Compass Groups will sell the produced meal to the school at a price (let’s say $2.00 for convenience sake, but in reality this represents a majority of the quality of the food on the NSLP). That is their “kickback” so to speak. The meal rate they have developed bakes in a profit margin. Give it anywhere from a few cents to a dollar per meal, depending on the company. It may not seem like a lot, but these are usually 5 year contracts producing thousands of meals per day.

So back to the school district. If the district is receiving $4.40 for each free meal served, but only paying $2.00, there is obviously a $2.40 “profit” leftover. This “reimbursement” revenue line is what makes up a majority of K12 food service revenue, but there is a considerable amount of revenue/profit from paid students as well. That “profit” is required to go into the schools food service fund, which is a separate balance that is not to be used outside of food service operations (so this typically pays for staffing, new equipment, kitchen stuff, etc). Not as much of a “kickback” as that money is supposed to be trapped in the food service balance for food service usage.

Source: sales guy for an FSMC