School lunch processing fees financially straining parents: Report

As schools transition to cashless payment methods, a new report from the Consumer Financial Protection Bureau (CFPB) revealed school lunch payment systems placed an unexpected financial strain on parents. Families are grappling with processing fees that can amount to a significant portion of their student’s lunch payments.

These payment processing systems add fees in order for parents or caregivers to add money onto their student’s lunch account which, according to the report, is collectively costing families up to $100 million each year.

Nearly 87% of the 300 largest U.S. public school districts use payment processors with fees averaging 4.4% per transaction.

Three companies, MySchoolBucks, SchoolCafe and LINQ Connect, dominate the school payment market, raising concerns about market competition and its impact on service quality and pricing.

The CFPB found that complex corporate structures may insulate payment companies from competition, discouraging school districts from negotiating better terms.

Despite a 2017 federal mandate requiring schools to inform families about fee-free lunch payment options, many parents remain unaware or find cash and check payments inconvenient.

Parents nationwide are mobilizing against these fee systems. A single mother in Massachusetts named Rebecca Wood spearheaded a campaign that successfully pushed for universal free school lunches in her state. Other parents have opted to pack their kids’ school lunches to avoid the extra fees.

Parents argue the need for comprehensive changes to ensure affordable, quality school lunches without undue financial stress on families has become increasingly apparent.

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