MCCSC sent a letter to Auxilio Services saying the contract will be terminated Oct. 13.
MCCSC hopes the pay increase will help address an ongoing bus driver shortage, which led the district to outsource some of its routes this year.
Michigan-based Auxilio Services has 30 days to address the problems.
The superintendent says the district is trying to fix issues with the length of its routes and overcrowded buses.
This is the first year Monroe County Community Schools has contracted with corporate bus fleet Auxilio Services. Only 18 of Auxilio's 42 routes were filled.
The Monroe County Community School Corporation began classes Wednesday morning with "minimal" problems with busing, according to a spokesperson.
The Monroe County Community School Corporation is confident its bus drivers will be prepared for the first day of school.
The change in policy means all students get the same meal, regardless of their account balances.
Schools across the country are taking different approaches to collecting lunch debt. Some are being criticized for "lunch shaming."
Parents, teachers and former school board members turned out in droves this week to protest what they’ve deemed “lunch shaming.”