USDA bans fees for low-income students in school meal program

In November 2024, the U.S. Department of Agriculture announced a significant policy change aimed at helping low-income families with school meal costs. Starting in 2027, students who qualify for free or reduced-price school meals will no longer face processing fees associated with cashless payment systems used by school districts. This decision follows a report from the Consumer Financial Protection Bureau, which indicated that such fees disproportionately affect low-income families who often lack the ability to preload large amounts into meal accounts. Currently, families with children eligible for reduced-price meals must not pay more than 30 cents for breakfast and 40 cents for lunch. However, processing companies can charge significantly higher fees for transactions, reaching up to $3.25 or 4%-5% per transaction. Many families end up paying as much as 60 cents on the dollar in fees, which leads to financial burdens for those already struggling. As a result of this new ruling, the USDA aims to alleviate some of the economic pressure that these processing fees place on families relying on school meals. By eliminating these charges, the USDA hopes to make it easier for families to provide nutritious meals for their children during school hours. With nearly 87% of the largest public school districts contracting with payment processors that charge fees, this reform is a vital step towards ensuring equitable access to nutritious food for students from lower-income households. The plan reflects a broader commitment from the USDA to work alongside Congress and other stakeholders to enhance the well-being of schoolchildren across America.