This study investigated the impact of cost sharing policy on access and persistence of students in secondary school system in Chiradzulu district in Malawi. The policy was implemented in 2001. The impact of the policy on families' financial budgets was investigated. The study also explored the views of secondary school head teachers and parents regarding the new secondary school fees that resulted from the implementation of the policy. Two questionnaires were used to collect data. Secondary school head teacher questionnaire was administered in 15 secondary schools, 14 questionnaires were collected, representing a return rate of 93.3%. Household survey questionnaire was administered in all the 84 households that were sampled, representing a 100% return rate. Literature records that raising school fees reduces the degree of equality of educational opportunities favoring the rich and increases dropout rate especially among the poor. High cost of secondary education affects particularly girls more than boys The poor disinvest in physical assets in order to pay school fees. This study has found out that non-reporting and dropout rates increased following the implementation of the cost sharing policy. The observed increase in the rates of nonreporting and dropout might be due to the rise in secondary school fees as a result of the policy. However the severe famine that started in 2000 might have also contributed to the high non-reporting and dropout rates. The study has also shown that the cost of secondary education was not affordable to an average parent. An average household had to spend 20% of its total annual income paying one child at a day secondary school and 3 7% of the annual income if the child was at a boarding secondary school. Secondary school head teachers in boarding schools feel that the policy has helped to ease the financial problems they used to have before the implementation of the policy. But head teachers in day secondary schools feel that the school fees are very high, they should be reduced to a manageable level. Almost all the parents feel that the secondary school fees are very high and pleaded that they should be reduced to a level that majority of the in the rural areas can afford.