Costs of Electronic Payments in K-12 Schools

Principal Investigator(s):  View help for Principal Investigator(s) Consumer Financial Protection Bureau

Version:  View help for Version V1

Name File Type Size Last Modified
  Cost of Electronic Payments in K-12 Schools 07/10/2025 05:58:PM

Project Citation: 

Consumer Financial Protection Bureau. Costs of Electronic Payments in K-12 Schools. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-07-10. https://doi.org/10.3886/E235664V1

Project Description

Project Title:  View help for Project Title Costs of Electronic Payments in K-12 Schools
Summary:  View help for Summary As of Fall 2023, more than 52 million students were enrolled at public schools throughout the United States. Over a school year, students incur a series of expenses for school meals, bus passes, after-school programs, and technology and materials needed for class, among other costs. As the broader payments ecosystem continues shifting towards more digital options in the wake of the COVID-19 pandemic, school districts are increasingly contracting with payment processing companies to provide an avenue for families to pay school-related expenses online.

While convenient for both families and school districts, electronic payment options present new costs and challenges for the families using them.For example, in many schools, families can electronically load funds into an account that students can draw from to pay for school meals. Although federal policy specifies that schools must provide a fee-free option for school lunch payment, many payment processors charge a transaction fee each time a user electronically adds money to a student’s school cafeteria account.

Payment processing companies have broad control over fee rates, though payment companies maintain that school districts have the opportunity to negotiate these rates during the contracting process. Some districts cover part or all of this fee, but it is frequently paid by the families who make electronic payments. Over the course of a school year, transaction fees for electronic payments in and outside of the lunchroom can significantly increase a family’s total spending on school-related costs and may disproportionately impact families with lower incomes.

To better understand the emergence of electronic payment processors in K-12 schools, the CFPB analyzed publicly available information from the 300 largest public school districts in the U.S. and held unstructured interviews with public school officials and companies offering these payment platforms. The sample of school districts covers more than 16.7 million students across more than 25,000 schools.

This spotlight highlights average costs and potential risks for families using electronic payment platforms to add money to their child’s school lunch account and reviews the market size and landscape of companies offering them, building upon initial observations referenced in the Fall 2023 edition of Supervisory Highlights.
Original Distribution URL:  View help for Original Distribution URL https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-costs-of-electronic-payments-in-k-12-schools/



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