Rebecca Wood, a 45-year-old single mother, was already facing significant medical bills in 2020 when she noticed a $2.49 “program fee” every time she loaded money onto her daughter’s school lunch account.
With more schools shifting to cashless payment systems, many districts have partnered with processing companies that charge fees ranging from $3.25 to 4% to 5% per transaction, according to a recent report from the Consumer Financial Protection Bureau. While schools are legally required to offer fee-free payment options like cash or check, transparency around these alternatives is often lacking.
Wood expressed how the $2.50 transaction fee added up quickly and impacted her financially. She mentioned that it would have been easier if she could have made a lump sum payment at the beginning of the year instead of paying each time.
Joanna Roa, a 43-year-old library specialist at Clemson University, shared a similar sentiment regarding the $3.25 per transaction fee for her son’s school lunch account. In response, she and her husband opted to pack lunches instead.
Roa highlighted the inconvenience and burden of packing lunch daily for her children due to the high fees associated with electronic transactions. Although her school district started providing free lunches, she acknowledged that this could change in the future.
The report by the CFPB revealed that 87% of the largest public school districts in the US contract with payment processors, with families in need bearing the brunt of these fees when paying electronically.
Wood, after researching the fees and regulations, advocated for universal free school lunches in Massachusetts, emphasizing the detrimental impact of processing fees on families.
While payment companies suggest that districts can negotiate fees, the dominance of a few companies in the market limits the options for families to avoid such practices.
If you’re a parent facing these fees, remember your right to pay by cash or check and to urge your school district to negotiate lower fees or cover them directly. Additionally, check if your district qualifies for the Community Eligibility Provision for free meals for all enrolled students.
