School Lunch Fees Can Be High for Parents

The Consumer Financial Protection Bureau (CFPB) is examining the fees associated with online deposits into school lunch accounts, revealing that some parents may pay up to 60 cents in fees for every dollar deposited. A recent report highlighted that transaction fees can accumulate to tens of millions of dollars for payment processors, with flat fees ranging from $1 to $3.25 and percentage fees between 3.5% and 4.58%. These fees can significantly burden families, particularly those with lower incomes. CFPB Director Rohit Chopra emphasized the economic strain these fees impose on families trying to manage basic school expenses. The report indicates that families paying full price for lunches incur transaction fees of about 8 cents per dollar spent, while lower-income families could face fees as high as 60 cents per dollar. Annually, these families may pay approximately $72 for lunches and an additional $42 in fees, depending on their deposit frequency. The CFPB's findings suggest that payment processors collect between $28 million and $92 million in fees from families paying full price, and between $1.9 million and $10.2 million from those on reduced-price lunches. The report also noted that flat fees disproportionately affect lower-income families, who tend to make smaller, more frequent deposits. Despite regulations requiring schools to offer fee-free payment options, the CFPB found that many districts fail to adequately inform parents about these alternatives, often making them less accessible than electronic payment methods. This oversight may lead families to incur higher fees than necessary.