Across the United States, a seismic shift is underway in how the nation responds to the youth mental health crisis—and K-12 schools are at the epicenter. School-based mental health services are emerging as a critical solution, as educators, lawmakers, behavioral health experts, and entrepreneurs unite around one central truth: if we want to meaningfully support children and teens struggling with mental health issues, schools must become a foundational part of the solution.
This movement is grounded in both logic and urgency. With millions of children attending school for most of the year, schools are one of the few touchpoints that nearly all youth share. Suzanne Button, senior clinical director for high school programs at the Jed Foundation, puts it simply: “It is a very logical place to address mental health needs.” Schools are already structured to deploy resources for youth, and they are deeply woven into the rhythms of community life. As such, they offer an unparalleled opportunity to identify mental health needs early and to implement localized, relevant interventions through school-based mental health services.
The Pandemic Deepened a Crisis That Was Already Unfolding
While the youth mental health crisis has been building for years, the COVID-19 pandemic acted as an accelerant, pushing already strained systems to the brink. Social isolation, academic disruptions, family stress, and widespread grief all took a serious toll on young people’s mental well-being. Many youth who had previously coped well began showing signs of depression, anxiety, trauma, and substance use. Those who were already struggling found their symptoms worsened, with fewer resources available to support them.
What’s become abundantly clear is that this crisis will not resolve on its own—and that waiting for families to seek out help off-campus is no longer viable. For many students, the only realistic access point for support is inside the walls of their school. This is why expanding school-based mental health services is crucial to meet growing demand.
A National Inflection Point for Mental Health Reform
Mental health leaders and federal policymakers are recognizing that the country stands at a turning point. Mitch Prinstein, Chief Science Officer at the American Psychological Association, has likened this moment to the post-WWII period that led to the creation of the Veterans Administration and the National Institute of Mental Health. In his February testimony before the U.S. Senate Committee on Health, Education, Labor, and Pensions, Prinstein called on Congress to allocate $1 billion in new funds for youth mental health research—a small figure, he argued, compared to the investments made in far less widespread conditions.
Following this, the federal government began putting youth mental health squarely on the legislative and policy agenda. President Biden introduced a “unity agenda” during his State of the Union address, highlighting mental health as a top priority. The House Subcommittee on Health of the Committee on Energy and Commerce followed with a full-day hearing on April 5, reviewing 19 bills related to mental health, including the KIDS CARES Act—which proposes enabling schools to receive reimbursement for providing behavioral health screenings to youth released from juvenile detention.
The White House also released its National Drug Control Strategy in April, a sweeping document that outlines how K-12 schools should take on expanded roles in prevention initiatives, drug-use risk assessments, and early screening. These efforts all emphasize the importance of strengthening school-based mental health services.
Major Barriers: What’s Holding Schools Back?
Despite broad consensus on the importance of schools in addressing youth mental health, several barriers continue to slow progress. Chronic underfunding, high student-to-counselor ratios, staff burnout, and limited mental health training among teachers all weaken a school’s ability to respond effectively.
Regulatory frameworks also create complications. Federal laws like HIPAA (Health Insurance Portability and Accountability Act) and FERPA (Family Educational Rights and Privacy Act) are designed to protect patient and student privacy. However, they often create confusion about what data can be shared between health providers and schools, making it harder to coordinate care through school-based mental health services.
This lack of data-sharing hinders continuity of care and makes it difficult to track outcomes. Sharon Hoover, co-director of the National Center for School Mental Health, pointed out that while some states have made progress integrating education and health data systems, these models are far from widespread.
Another issue is access to behavioral health providers—especially in rural or underserved communities. Many school districts may only have one or two counselors for hundreds or even thousands of students. Dr. Tami Benton, executive director of child and adolescent psychiatry at Children’s Hospital of Philadelphia, noted that telehealth could help mitigate provider shortages, but infrastructure limitations, regulatory red tape, and poor reimbursement rates continue to limit its use within school-based mental health services.
Medicaid Behavioral Health Coverage and the Reimbursement Crisis
One of the most critical issues driving this access gap is the structure of Medicaid behavioral health coverage. Medicaid, along with the Children’s Health Insurance Program (CHIP), is the largest payer of behavioral health services for youth in the U.S., covering millions of children and teens. As of early 2022, nearly 7 million children were enrolled in CHIP, with many more on Medicaid. These safety-net programs are vital for low-income families.
Yet providers across the country have long raised concerns about the low reimbursement rates for behavioral health services under Medicaid. Many say they simply cannot afford to continue offering care at such low rates. The result? A shrinking pool of available mental health professionals who accept Medicaid—and millions of children left with few or no options for care.
Even commercial insurers are not immune to this issue. Testimony during Senate hearings revealed that mental health parity laws—which mandate that behavioral health services be reimbursed on par with physical health services—are often poorly enforced. Senator Wyden called for stronger accountability mechanisms and policy interventions to ensure that both public and private insurers uphold their legal obligations.
Without reform, Medicaid behavioral health coverage will continue to fall short of meeting the growing demand—particularly in school-based mental health services, where budget constraints are already tight.
Innovative Models: Businesses Step In to Support Schools
While public systems work through these challenges, private companies are stepping up with innovative solutions designed specifically for school environments.
Daybreak Health, a San Francisco-based telehealth startup founded in 2020, partners with more than 100 California schools to provide virtual mental health services. Referrals come from school counselors and pediatricians, and the company reports that over 200,000 students now have access to its services. In 2022, Daybreak secured $10 million in Series A funding from investors like Lightspeed Venture Partners and Maven Ventures.
Hazel Health, another Bay Area company, provides both physical and mental health services directly in schools. Founded in 2015, Hazel equips schools with the technology and training needed to facilitate on-demand virtual visits from licensed professionals. Their service includes tablets, headphones, and carts stocked with essential medications—all maintained by Hazel’s support team. The model is built to work alongside existing school health staff and aims to streamline care for both physical and emotional needs.
These business models don’t replace public systems but rather serve to supplement and enhance them—offering fast, tech-driven support where traditional systems are overwhelmed or underfunded. They highlight the growing role of school-based mental health services as integrated, accessible parts of the school day.
A Path Forward: What Needs to Change
If schools are to become effective centers for youth mental health care, systemic change must follow. The most effective path forward includes:
- Increasing Medicaid behavioral health coverage reimbursement rates to make it financially sustainable for providers to work with youth populations.
- Expanding the use of telehealth in schools, especially in rural and underserved areas, by updating infrastructure and addressing regulatory barriers.
- Improving mental health literacy among educators and parents so early signs can be identified and addressed more effectively.
- Building integrated data systems that allow schools and healthcare providers to share relevant information while maintaining privacy.
- Funding and passing supportive legislation like the KIDS CARES Act and other proposals focused on school-based care delivery.
As mental health becomes an increasingly urgent public concern, schools are not just a logical choice for intervention—they are a moral imperative. With comprehensive policy reform, investment in infrastructure, and cross-sector collaboration, the U.S. education system can evolve to not only teach—but to heal through robust school-based mental health services.
