Cashless School Cafeterias Result in Higher Costs for Lower Income Families

School cafeterias across the United States have transitioned to cashless payment systems, resulting in unforeseen costs for many lower-income families.
Processing Fees Adding Up
Single mother Rebecca Wood found herself burdened with additional costs in 2020 when she discovered a $2.49 'program fee' each time she loaded money onto her daughter's school lunch account. According to a recent report from the Consumer Financial Protection Bureau, more districts are contracting with processing companies that charge as much as $3.25 per transaction, or 4-5% of the total amount. Although schools are required by law to offer fee-free payment options such as cash or check, there is often a lack of transparency surrounding these alternatives.
Inconvenience for Families
Families like Rebecca Wood's are feeling the financial strain of these fees, especially those who cannot afford to load large sums at once. The report found that families with lower incomes, including those eligible for free or reduced lunch, end up paying up to 60 cents per dollar in fees when electronically paying for school lunches.
Limited Options for Parents
Joanna Roa, a parent with two school-aged children, expressed her frustration with the high transaction fees and has resorted to packing lunches for her children instead of using the cashless system. Despite federal policies mandating fee-free options, many families still face challenges in avoiding these fees.
Advocating for Change
In response to these issues, some parents like Rebecca Wood have taken action to push for universal free school lunches in their states. Advocacy efforts have highlighted the need for greater transparency and negotiation power for school districts when dealing with payment processing companies.
Empowering Parents
Parents facing financial barriers due to cashless systems can take action by familiarizing themselves with their rights, requesting fee negotiations with the school district's payment processor, or exploring options such as the Community Eligibility Provision for free meals. By advocating for change and seeking alternatives, families can alleviate the financial burdens associated with cashless school cafeterias.