The U.S. Department of Agriculture has announced that students eligible for free or reduced price school meals won’t be charged processing fees starting in 2027.
A family of four in Arizona would qualify for free lunch if they make less than $40,560 a year, or $57,720 for reduced prices.
School districts can work with processing companies to offer cashless payment systems for families. But those companies can charge processing fees for each transaction.
By law, students eligible for reduced meals cannot be charged more than 30 cents for breakfast and 40 cents per lunch. But with processing fees higher than $3 per transaction, families can end up paying 10 times that amount.
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.
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