Parents hit with extra fees as school lunches go cashless

MEMPHIS, Tenn. — Class is in full swing across the MidSouth and parents are learning everything that comes with going back to school can get costly.

A WREG investigation found the price parents pay adds up even more because of fees charged for school lunches that they may not even see.

Ashanti Clark says establishing routines for her sons Daniel and Ethan, a sixth and third grader makes busy mornings much easier.

In fact, she created what looks similar to a stop light system for her boys to start the day.

“We start out every morning on red, so I put all of them on red. As they complete the task, they push the button,” explained Clark.

Daniel and Ethan started school at the end of the first week in August, but Clark says the planning began more than a month ago.

Clark said, “We’ve just been preparing, I’ve got to prepare the house, I’ve got to prepare the pantry for all the snacks and the lunch!”

Clark says the boys mainly take their lunch to school, but they also check out the menus to decide on days they’ll buy instead.

Paying for school lunches for parents like Clark has gotten much easier with electronic options. Gone are the days of having to write a check or send exact change to the school.

“I like to use those, the school account system because that’s much more convenient for me, I can just transfer money onto the account and I know they have what they need,” Clark told WREG.

The Clarks’ school system uses a digital platform called LINQ Connect for families to make payments for school lunches.

Clark can add funds to her boys’ lunch accounts, transfer money between the two, set low balance alerts and even see what’s on the menu.

“It’s instant like they immediately have the money when they need it, so I don’t have to do anything else. It’s really convenient,” explained Clark.

However, that convenience comes with a cost, according to research uncovered by the NewsChannel 3 Investigators.

The Consumer Financial Protection Bureau recently released a report raising concerns about what it calls “junk fees” charged by school lunch payment processors.

When parents add money to their child’s lunch accounts online, they’re typically charged a transaction or convenience fee every time they re-load funds.

Austin Hinkle, the agency’s Section Chief for the Office of Students and Young Consumers says what’s most surprising is just how expensive the fees are.

“I think the first thing that families need to know is that these fees can add up, as they can be really expensive over the course of a year, especially compared to how much you’re paying in food costs,” Hinkle told WREG.

The CFPB looked at the 300 largest, public school districts in the country and found additional school lunch fees can cost families upwards of $100 million.

Their research also reveals families getting reduced lunch may be paying as much as $0.60 in fees for every dollar spent on food. Hinkle says it places the biggest burden on families who can least afford it.

“Families who deposit more frequently because they’re waiting for their paycheck and they can’t, you know, pay for the entire year of school lunches all at the same time, pay a lot more in fees over the year,” Hinkle told the NewsChannel 3 Investigators.

The WREG Investigators reached out to local school districts and scoured their websites to find out which school lunch payment platforms are used, the costs of extra fees, and how parents can avoid them altogether.

The highest transaction fee we found was $3.25 for Arlington Community Schools, the Germantown Municipal School District, and Millington Municipal Schools which all use My School Bucks.

All Millington students get free breakfast and lunch but can be charged for a la carte or additional items they choose to buy, according to a district spokesperson.

The district noted the fee is charged “per family”, so parents aren’t hit with multiple for each child.

Germantown Schools says My School Bucks also offers an option for users to pay a yearly, one-time fee of $12.95 for one student. GMSD said the One Pay Membership is $26.95 for two or more students.

Collierville Schools uses SchoolCafe’ which charges a $2.25 convenience fee.

Bartlett City Schools uses LINQ Connect and the processing fee is $2.60.

Some families pay a percentage per transaction instead of a dollar amount.

The Lakeland School system contracts with RevTrak and the convenience fee for paying online with a credit card is 3.4% per transaction.

Desoto County Schools also uses LINQ Connect and the convenience fee is 3.85% with a minimum fee of $2.85 per transaction for credit and debit cards.

It’s a price Hinkle says parents don’t have to pay at all.

“The other thing families should know is that they’re entitled under the federal law to a fee-free option, and so they can go to their school and ask and make sure that they understand,” said Hinkle.

Hinkle also says while the fees are charged by the third parties, the districts have the power to negotiate their contracts.

“So school districts are really in a great position to do that when they negotiate with the vendors themselves, and to be able to cover as many of those costs as possible for families so that when you’re paying for your school lunch, you’re not also having to pay for these ‘pay to pay’ junk fees,” added Hinkle.

One example of that is at Memphis Shelby County Schools. All MSCS students receive free lunch and the district absorbs the $2.49 transaction fee charged by My School Bucks for monies added when families purchase additional items.

The strategy for Clark, who is an accountant by trade, is simple. She plans for those extra fees.

“I can go ahead and add up, you know, how much does breakfast and lunch cost every day, times the number of days, times the kid, and you get the number, so you just put that in your budget,” explained Clark.

How Can I Avoid the Additional Fees?

• Go old school and pay with cash or a check (**Note-MSCS is cashless.**)
• Ask your child’s school how they accept the above forms of payments
• Look for the alternative methods on the school or district’s website
• Consider making fewer transactions if possible, but watch for minimum payment requirements
• Inquire about annual, one-time flat fees

The Marion County School District (Arkansas) did not return our request for information or comment.

WREG reached out to all of the payment platforms mentioned in this story and none responded. At least two of them offered no way to speak to a live person at the corporate level.

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