Can't do it. It's not legal to hold the kid's report card, to keep him from registering next year, or to withhold his diploma.
Even if he's destroyed textbooks, lost library books, charged lunches in the cafeteria for which he can't pay. We can't MAKE anyone pay anything.
We CAN keep them from attending social events like dances (even the prom), and we can keep them from walking across the stage at graduation (they can pick up their diploma in the office).
We do not have to serve them the "standard" lunch, but we do have to give them something to eat.
This isn't a huge problem at our school, but it is a problem. Typically, kids let little things build up: a library fine, a lost textbook, an unpaid class fee. Then suddenly they're juniors, and we won't sell them a prom ticket . . . so they come up with the money . . . and then we won't let them walk across the stage, so they come up with the money.