This is a reprint of a paper I wrote either during law school or soon after. I am noticing that there is still a lot of confusion regarding religious expression in public situations. There may have been some changes to the law since then, but I don't think that any changes have been dramatic.
There has been much confusion in recent years concerning school prayer. Some have argued that the courts have declared schools "religion free zones." Others have maintained that the law of church and state is so muddy that ordinary teachers, principals, administrators or school board members cannot understand them. The former is simply a misinterpretation of the law. The latter, while having some justification, is still incorrect. While it is true that many school officials, because of their busy schedules, do not know the law as well as they should, the law is not as complicated as it might first seem.
State Action and the Establishment Clause
In order to understand the law concerning separation of church and state, it is important to grasp the concept called "state action." State action arises when an agent of the government abridges the rights of an individual. In the present case, since teachers and others in the education establishment are agents of the state, any action they take on behalf of the government can produce state action for the purposes of constitutional limitations.
One constitutional limitation placed on the government is that it may not advance nor inhibit religion. The main test applied to the Establishment Clause is the Lemon v Kurtzman  test (hereinafter the Lemon test). The Lemon test is a three-prong test. The three prongs are:
1. The statute (or other government action or policy) must have a secular purpose.
2. Its primary effect or purpose must neither advance nor inhibit religion.
3. The statute (or policy) must not foster an excessive entanglement between church and state.
A few cases have come out since Lemon that suggest the Supreme Court is unhappy with the Lemon test. In Lee v Weisman , the Court did not reject the Lemon test, but it at least modified it. In Lee, the school invited a rabbi to give a "nonsectarian" prayer as part of an official graduation ceremony. The Court held that "including clergy who offer prayers as part of an official public school graduation ceremony is forbidden by the Establishment Clause."  The Court reasoned that the practice at least suggests at strong endorsement of religion if not an outright compulsion to participate in a religious activity. The Court rejected the argument that the complainant was not compelled to attend. The court pointed out that "in this society, high-school graduation is one of life's most significant occasions, and a student is not free to absent herself from the exercise in any of the real sense of the term 'voluntary.'" 
In spite of Lee, the Lemon test is still the dominant test. The question that most often arises among teachers and parents, among others, is what kind of religious expression does the law permit? A pamphlet has been published by a coalition of groups that represent the whole spectrum of this debate. It is called Religion In The Public Schools: A Joint Statement Of Current Law. It was published in April, 1995 and it gives a brief outline of the law as it is applied today.
All of the main cases have dealt with state actors or actions that violate the Establishment Clause. However, the First Amendment does not restrict the actions of purely private actors. If there is no state action, there is no constitutional violation. For instance, a student can pray individually or with their peers as long as it is not disruptive . Students can discuss religious topics or issues as long as the others are willing listeners . As long as a student's religious activity is not carried out in a harassing or disruptive manner, it does not fall within the scope of the Establishment Clause. As a side note, it must be pointed out that religious speech is subject to the same time, place, and manner regulation as any other speech.
A more complicated issue is whether students may initiate a prayer at graduation on their own. Courts have split on this issue (mainly because the other students are a captive audience). (However, school officials may not delegate the duty to a student or student organization because under the principles of Agency, you cannot have someone else do what you are prohibited from doing yourself.)
Another issue that has arisen is whether a "moment of silence" is permissible. One case that mandated a moment of silence "for the purpose of meditation or voluntary prayer" was struck down by the Supreme Court . This was primarily because it failed the first and second prongs of the Lemon test. Its purpose was not secular, and it had the primary effect of advancing religion. However, it might be possible to pass a law that required a moment of silence at the beginning of the school day as long as the Lemon guidelines are met.
The main thing to keep in mind is that agents of the state (in this case school officials) cannot further or hinder religious expression. The restrictions contained in the Establishment Clause do not apply to private parties. Therefore, students who act on their own can legally express their religious convictions as long as it is not disruptive or harassing."
 403 U.S. 602 (1970).
 112 S.Ct. 2649 (1992).
 Id.at 2650.
 Id.at 2651.
 Religion in the Public Schools: A joint statement of current law, 1.
 Wallace v. Jaffree, 472 U.S. 38 (1985).