USDA bans school lunch fees for low-income families

abcnews.go.com:

The U.S. Department of Agriculture says that students eligible for free or reduced price school meals cannot be charged processing fees beginning in 2027

NEW YORK — The U.S. Department of Agriculture announced that students eligible for free or reduced price school meals cannot be charged processing fees beginning in 2027.

School districts currently work with processing companies to offer cashless payment systems for families. But the companies can charge “processing fees” for each transaction. By law, students who are eligible for reduced price meals cannot be charged more than 30 cents for breakfast and 40 cents for lunch. With processing fees, however, families can end up paying 10 times that amount. Processing companies charge as much as $3.25 or 4% to 5% per transaction, according to a recent report from the Consumer Financial Protection Bureau.

For families with lower incomes who can’t afford to load large sums in one go, processing fees can arrive weekly or even more frequently, increasing costs disproportionately. Families that qualify for free or reduced lunch pay as much as 60 cents per dollar in fees when paying for school lunches electronically, according to the report.

The new Agriculture Department’s policy becomes effective starting in the 2027-2028 school year. With this rule, the USDA will lower costs for families with income under 185% of federal poverty guidelines, which equals $57,720 for a family of four.

“USDA and schools across America share the common goal of nourishing schoolchildren and giving them the fuel they need to learn, grow and thrive,” said Agriculture Secretary Tom Vilsack in a statement Friday. “While today’s action to eliminate extra fees for lower-income households is a major