"latch-key kids" = children whose parent[s] are working away from the home, so the children have their own keys to the house. It implies that they lack supervision and are likely to get into mischief as there is no-one at home to make sure they are safe.
For the schools the dilemma in this situation is whether they should actively interfere in the families and their way of life. They have responsibility for the children in the school, but not outside the school; at the same time, all adults have a moral responsibility to ensure that children are not in danger. It is a situation - certainly in modern inner cities - that leads to a great deal of debate.