Biden Harris Administration to End Online Junk Fees for Low Income Families Paying for School Meals

Press Release

Release No. 0221.24

WASHINGTON, Nov. 1, 2024 - Agriculture Secretary Tom Vilsack today announced that students eligible for free and reduced price school meals must not be charged junk fees along with the cost of a meal served through the School Breakfast Program and National School Lunch Program. This policy, effective school year 2027-2028, will lower costs for families with income under 185% of federal poverty guidelines - equal to $57,720 for a family of four - by ensuring they are not burdened by processing fees when purchasing school meals for their children. Today's action is a first step. USDA will examine fees charged to families with a goal of eliminating online junk fees for all families regardless of income level to further remove barriers to access healthy meals.

The U.S. Department of Agriculture's Food and Nutrition Service issued a memo today to schools across the country about this policy. The school year 2027-2028 implementation date gives schools ample time to modify current systems or establish new contracts; however, USDA is encouraging schools to implement this requirement as soon as possible. The memo also reiterated USDA's longstanding policy that schools must offer all families a free and accessible method for making deposits to school meal accounts - and that schools must ensure families know about this option.

"USDA and schools across America share the common goal of nourishing schoolchildren and giving them the fuel they need to learn, grown and thrive," said Agriculture Secretary Tom Vilsack. "While today's action to eliminate extra fees for lower income households is a major step in the right direction, the most equitable path forward is to offer every child access to healthy school meals at no cost. We will continue to work with Congress to move toward that goal so all kids have the nutrition they need to reach their full potential."

"Today's announcement reflects the President and Vice President's broader efforts to lower food costs and eliminate junk fees," said National Economic Advisor Lael Brainard. "The Department of Agriculture's action applies to the 1 million children who receive reduced priced meals and lays the foundation to eliminate these junk fees for all 30 million children that receive healthy meals at school every day."

Last year, the Administration committed to bring down costs for Americans by cracking down on junk fees, which are hidden fees that increase costs for customers and bring financial stress on low-income families. And this year, USDA promised to bring relief to families of children who eat school meals, in response to a report from the Consumer Protection Financial Bureau which found that online school meal payments are raising costs for them.

K-12 schools serve nutritious meals to about 30 million children every school day. While this policy applies to all students eligible for free or reduced lunch, it will most directly benefit the more than 1 million students who received reduced price school meals. By law, students who are eligible for reduced price meals cannot be charged more than $0.30 for breakfast and $0.40 for lunch. But some families end up paying more than that, by way of processing fees they're charged when depositing money into their student's school meals account using an online method. The policy announced today will ensure fairness for all students receiving meals at a reduced price, even when paying online. Schools may choose to use their own funds to cover the processing fees associated with online payment systems.

The memo also includes best practices schools can use to inform families of the payment methods available that do not add fees.

Healthy School Meals for All

Advancing a pathway to free healthy school meals for all is a priority set forth in the Biden-Harris Administration's White House National Strategy on Hunger, Nutrition and Health.

Eight states have taken permanent actions to provide healthy school meals at no cost to all their students: California, Colorado, Maine, Massachusetts, Michigan, Minnesota, New Mexico and Vermont. 

Meanwhile, in other states, many schools in high-need areas provide free meals to all their students through the Community Eligibility Provision, commonly known as CEP. Last year, USDA gave an estimated 3,000 more school districts the option to serve breakfast and lunch to all students at no cost by expanding the availability of CEP.

Support for Healthy Kids

USDA is committed to helping kids lead healthy lives. The Department has taken several actions to bolster programs that provide critical nutrition to infants and children. Specific to the school meal programs, USDA has provided a total of nearly $13.2 billion in extra financial support for schools across the country since 2021.

USDA touches the lives of all Americans each day in so many positive ways. Under the Biden-Harris Administration, USDA is transforming America's food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate-smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.

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