Background In November 2020, during the SARS-CoV-2 pandemic, Missouri allowed local public health jurisdictions the option to implement a modified quarantine policy allowing kindergarten through 12 (K-12) students with low-risk exposures to continue in-person learning. We assessed adherence to quarantine among participants in modified quarantine and standard home quarantine and the psychosocial impacts of quarantine on students and families. Methods In January-March 2021, as part of an investigation of in-school transmission of SARS-CoV-2, parents of 586 participating K-12 students identified as a close contact with a person with SARS-CoV-2 were sent a survey to assess their activities and psychosocial impacts to the child and family. Results Among the 227 (39%) survey respondents, 26 (11%) participated in modified quarantine and 201 (89%) participated in standard home quarantine. Forty-six percent of students in modified quarantine and 72% of students in standard home quarantine reported abstaining from non-school activities during quarantine. Parents of 17 (65%) students in modified quarantine and 80 (40%) in standard home quarantine reported low or neutral levels of stress in their children. Parents of students in standard home quarantine described greater stress, negative impacts to family functioning, and interruptions to educational opportunities for students. Conclusions Students in modified quarantine reported lower adherence to quarantine recommendations but lower daily impact and stressors than those in standard home quarantine. Because in-school transmission of SARS-CoV-2 has been shown to be low when layered prevention strategies are in place regardless of the use of modified or standard home quarantine, this modified quarantine approach provides a reasonable option for balancing the needs of students and families with SARS-CoV-2 prevention measures.