Chaoyang township is one of the poorest townships in a national-level impoverished county in the southwest. Statistics show that the average per capita income for farming families was RMB1,931 per year in 2006. Before the highway came through the area, the residents of Chaoyang township had to walk for two whole days across mountain ranges to get to the county seat. The Chaoyang Elementary School, located in the mountains of southwestern China, is the sole school in Chaoyang county. According to teachers, every student had to pay several hundred RMB in tuition and miscellaneous fees per semester in the past few years, and in the year of highest fees the middle school collected as much as RMB400 or more per student per semester. When the policy of "two exemptions and one subsidy" (TEOS) was implemented in Chaoyang Elementary School in September 2006, the children could go to school without having to pay tuition and miscellaneous and book fees. According to county documents, in the year 2006-7 the state would subsidize the school with operating funds amounting to RMB95 per elementary school student and RMB145 per junior middle school student per semester. In the second half of this period, every boarding student would receive a RMB10 living allowance per week. The attitudes of the school administration, teachers, parents, and rural inhabitants toward this policy differed somewhat, and implementation of the policy had driven a series of changes in the school's internal management. The purpose of this essay is to bring to the fore the grass-roots reactions to the central government's educational reform policies, in hopes that future policy making can take the local voices into consideration. (Contains 2 notes.)