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

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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https://www.usda.gov/media/press-releases/2024/11/01/biden-harris-administration-end-online-junk-fees-low-income

MySchooBucks Lawsuit

 

Story v. Heartland

This case is a class action on behalf of, possibly, millions of parents at more than 30,000 schools. alleging that Heartland Payment Systems—a private company that contracts with school districts to allow parents to pay for their children’s school lunches and other school fees online—defrauded parents into believing that the extra fees Heartland charges were going to their children’s school, when in fact they were going straight into Heartland’s pocket.

Not long after this lawsuit was filed, Heartland undertook a series of dubious procedural maneuvers with the explicit goal of trying to prevent this lawsuit from going forward—and prevent any other parents from ever being able to file another one.  First, Heartland used the named plaintiff’s account information—information the company only had because the named plaintiff is a parent who used Heartland to pay for school fees—and attempted to deposit $40,000 into his bank account, without permission. In other words, Heartland attempted to buy off the named plaintiff—without even asking him. The named plaintiff rejected this attempt. Nevertheless, Heartland has asked the court to dismiss the lawsuit anyway, arguing that the case is now somehow moot simply because it tried to pay off the named plaintiff. We disagree that a failed attempt to buy off a named plaintiff is sufficient to moot a class action.

Second, Heartland set about trying to prevent other parents from participating in this lawsuit—or filing a lawsuit of their own. Soon after this lawsuit was filed, Heartland updated the terms of service on its  website to include a retroactive arbitration provision and class waiver, which purport to prohibit anyone who uses Heartland to pay for their kids’ school lunches, from ever bringing claims against Heartland in court or ever participating as a class member in a lawsuit brought by someone else . Heartland’s new terms specifically state that this prohibition applies to lawsuits that have already been filed—including this one. There is no way for parents to reject these new terms, and, in fact, Heartland has said that if parents don’t like the new terms, their only choice is to stop using Heartland—i.e. stop using the only company their school contracts with to pay these fees online. Courts have repeatedly rejected similar attempts by defendants to force potential class members to give up their rights. We’re fighting Heartland’s efforts to do that here.

Not only is this case important to the millions of parents who use Heartland to pay their schools, it’s important to the preservation of access to justice more generally. We’re seeing with alarming frequency companies like Heartland resort to, essentially, dirty tricks to try to avoid being held accountable in court—attempts to end a class action by buying off the named plaintiff, even against the named plaintiff’s will or to force new terms of service on customers or employees, who have no way of rejecting them, that purport to prohibit them from participating in a lawsuit that’s already been filed. We hope that the court in this case, and courts seeing these same tactics in other cases, will recognize the threat these efforts pose to access to justice and to the integrity of the judicial system.

Public Justice attorneys Jennifer Bennett and Stevie Glaberson are co-counsel in the case with Varnell & Warwick.

Story v. Heartland | Public Justice

FYI: 2019 Lawsuit alleges lunch payment service used by @mcps @mocoboe defrauded parents

Families in D.C., Maryland and Virginia could be pulled into a class-action lawsuit that’s been filed against an online lunch payment service being accused of pocketing money parents believed was going to their children’s schools.

Heartland Payment Systems, which owns and operates MySchoolBucks, is the subject of the lawsuit filed in the spring by Florida resident Max Story. He says Heartland misled him into believing program fees associated with the service were going to his child’s school.

With the lawsuit, families are “seeking damages and remedies to get back the money they paid that they shouldn’t have had to based on the fraud,” said Jennifer Bennett, Story’s attorney. “It turns out that it was Heartland, itself, that was charging fees, and none of the money was going to schools.”..

...D.C. Public Schools, as well as Prince George’s, Montgomery, Fairfax and several other counties in Maryland and Virginia, use MySchoolBucks. The service is optional in many schools, but families who opt in use it to pay for meals and before- and after-school programs.

The lawsuit revolves around a $2.49 program fee that took effect in 2017 and accompanies every MySchoolBucks transaction. The fee is lower in Montgomery County Public Schools, where users pay $1.95, according to the district’s website.

Heartland, in its Terms of Service agreement, told parents their schools may charge them a fee to use the service, according to the lawsuit filed in May...

https://wapo.st/3OfFDwT