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Rights for music during graduation ceremonies

We have received several questions about setting graduation ceremonies to music and streaming them or recording them and sharing them with students. What are the laws surrounding this? There seems to be a lot of misinformation out there. Below is a question I received:

The slideshow for the [public] high school graduation is complete. [T]he students would like to have songs from “High School Musical” added to the slideshow. Is this possible? If copyright comes into play and we can't there will be no music added to the show. Please advise, We have viewed many other shows from various high schools and at the end of the show it simply states "we do not have rights to this music."