More than one in four of the school population in the North qualifies for assistance at a cost of more than £80 million a year.
A child is eligible if they enrol at their nearest “suitable” secondary school which is beyond the three-mile qualifying distance from their home.
The term “suitable” is defined as being a grant-aided school in any one of several categories that include integrated, Catholic, state and Irish-medium.
It also includes grammar schools, meaning thousands of children receive a free bus pass even if they live closer to several non-grammar secondary providers. Means-testing has been suggested as one way to raise revenue and ease huge financial pressures across the system.
An almost identical recommendation was put forward in an independent review four years ago.
In addition, it was suggested that if transport was provided to the nearest secondary school only, and sectors had no influence, then the expected savings would be £26 million a year.
The Department of Education says its new probe will focus on “ensuring a revised policy will deliver value for money”.
Not all options, the department adds, will necessarily involve a reduction in expenditure or the number of pupils in receipt of home to school transport.
“At the end of any review of this kind it will be for a future minister to make decisions on whether there should be changes to the current policy,” a spokeswoman said.
“This review will allow a minister to take informed decisions on this important service.”
It is unlikely that any revised policy will take effect before September 2021 at the earliest.