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Republicans Declare Banning Universal Free School Meals a 2024 Priority
(newrepublic.com)
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And you're missing that, without the free meals being available to everyone, there's a negative social stigma to getting the free school lunches. Kids skip the meals because they don't want to be seen as "that poor kid." This leads to them going hungry, not doing well in school, and not having as many chances to break the cycle of poverty.
By opening the free school lunches to everyone, the stigma is removed. If Billy gets a free school lunch, he might be poor or his parents just might be having him get the school lunches instead of packing something. Without the social stigma, kids who need the lunches are more likely to get them and more kids are fed.