School districts across San Antonio have adopted online systems to process credit card payments to easily fill student lunch accounts to avoid having parents send cash or checks to school with their children.
But that convenience comes at a cost – normally around $2.50 each time money is loaded up.
A new report released by the Consumer Financial Protection Bureau last month scrutinized the fees charged by a handful of leading credit card processors in the education sector, analyzing how much they add up — and how they can disproportionately impact lower income families.
“Transaction fees and other types of junk fees can take an economic toll on American families just trying to pay for basic school expenses, including school lunch for kids,” CFPB Director Rohit Chopra said in a statement.
The report pointed to three main companies — MySchoolBucks, SchoolCafé and LINQ Connect — which are all used by districts across San Antonio.
With fees being charged as a flat amount, families that can only afford to make smaller, more frequent payments accrue far more fees over a year than those who can afford to load a substantial amount on their child’s account at a single time.
The report analyzed data from 300 of the country’s largest school districts, finding that families paying full price for lunch were charged around $0.08 for every $1 they spent on lunch while those who paid for reduced price lunch paid $0.60 for every $1 spent.
The San Antonio Report reviewed contracts between a handful of local districts, both large and small, and the companies mentioned in the report, including Randolph Field ISD, a military school district with around 1,500 students.
According to the documents, which were requested through an open records request, the district receives around $25,000 in annual volume, with an average ticket of $45 and a transaction fee of $2.49. That equates to around $1,382 in fees paid by parents each school year.
Other districts in the region, and select schools, are part of the “Community Eligibility Provision,” which allows them to provide free meals to all students, removing the need for the processing companies and fees. This includes San Antonio ISD and Southside ISD.
But districts that participate in the USDA’s free and reduced lunch program and still charge for meals are required to make fee-free options available. The CFPB report notes that many districts “frequently fail to post the availability of free payment methods” for parents to take advantage of.
A review of local district websites found mixed results for this requirement.
Judson ISD, for example, only had MySchoolBucks listed on its child nutrition website as of Friday.
Nicole Taguinod, a district spokeswoman, said in an email that the district does accept cash or checks at any campus or the Child Nutrition office with no fee or additional cost, but did not respond to questions about whether and how that is shared with parents.
“My School Bucks is an option that can be declined; it is an additional option for parents who want to utilize a credit card method of payment,” she said, adding that Judson ISD does not profit from the convenience fee.
Other districts, including Randolph Field ISD, Northside ISD and North East ISD have alternative options listed for parents online.
The School of Science and Technology, a charter school in San Antonio, also uses SchoolCafé – and sends “quarterly reminders … to remind parents of paying off school lunch accounts,” while providing multiple options, including campus payments and online payments.
Northside ISD uses multiple payment processors with a variety of fees, including SchoolCafé for lunch payments at $2.95 per transaction, MySchoolBucks for ticketed events at 8.7% of the transaction total and MySchoolBucks for Tuitions, Camps, Fundraisers & Other Fees at 3.75% of transaction cost.
Barry Perez, a Northside ISD spokesman, said letters are also sent to parents with the different options for lunch payments.
Aubrey Chancellor, a spokeswoman for NEISD, said the online credit card option was welcomed by parents.
“Our parents appreciate the option to pay online and we wouldn’t want to take away the convenience of that feature,” she said.
Following the findings in the report, federal officials are reviewing policies and could take other actions.
U.S. Agriculture Secretary Tom Vilsack said the USDA will be reviewing its policies and will work with schools, state oversight agencies and the payment processors “to ensure that all families have a clear and readily-available fee-free payment method.”
“USDA and schools across America share the common goal of nourishing the 30 million children that depend on school meals as a vital source of nutrition, and we’re committed to working together to make sure nothing gets in the way of that,” he said.
U.S. Secretary of Education Miguel Cardona said tools that make meals, transportation and after-school programs more accessible are encouraging, adding that the report shows the need for certain protections.
“This CFPB analysis of the 300 largest public school districts makes clear that as the growing use of digital payment options expands to our schools, we must take care to meet schools and families where they are — examining benefits as well as pitfalls, listening to community concerns, and implementing guardrails where necessary,” he said.
