But the subsidy doesn't fully cover buying the ingredients, preparing the food and serving it. So, many schools stretch their budgets with low-cost, highly processed items, such as chicken nuggets, French fries, and sugary snacks.

Cooper warns that these cheaper items can fuel expensive health problems.

"The Centers for Disease Control has said, of the children born in the year 2000, one out of every three Caucasians and one out of every two African-Americans and Hispanics will have diabetes in their lifetime," she said.

Chef Ann CooperChef Ann Cooper, director of nutrition services for Boulder Valley Schools in Colorado, has removed sugar and fried foods from the lunches. She's also set up a full salad bar in each cafeteria.

Nutritious alternatives

People are less likely to develop diabetes if they eat whole, natural foods, including vegetables, instead of processed foods and sugary snacks.

So, as director of nutrition services for Boulder Valley Schools, Cooper has removed sugar and fried foods from the lunches. She's also set up a full salad bar in each cafeteria.

"There's basic salad green mix, and also Romaine lettuce, carrots, peppers, cherry tomatoes, celery, garbanzo beans, cottage cheese, there's chicken and or eggs."

These options cost 30 percent more than a lunch of chicken nuggets and tater tots. But Cooper says it's possible to serve healthier ingredients and keep a school's lunch budget healthy if enough students participate.