In Minnesota, Anoka-Hennepin School District officials plan to hire a collection agency to pursue approximately $160,000 in unpaid breakfast and lunch money. Families owing more than $100 in school meal debts and who don’t respond to the district’s internal collection efforts – or simply refuse to pay – should expect to hear from a third-party collection firm by early next year. Anoka-Hennepin, Minnesota’s largest school district, located northwest of Minneapolis and St. Paul, has yet to contract with a collection agency and plans to first offer families a payment plan option.
Nationally, schools are experiencing financial problems because of unpaid school lunches. Federal nutrition regulations that added more fruits, vegetables and whole grains to meal spiked meal costs and likely exacerbated the issue.
The School Nutrition Association is urging Congress to provide more federal reimbursement to match rising lunch costs resulting from the reauthorization of the Healthy, Hunger-Free Kids Act. The association found in its “State of School Nutrition 2014” report that more than 70% of districts reported that their school nutrition program had student meal debt by the end of the 2012-13 school year at a median debt of $2,000 per district.
The U.S. Department of Agriculture leaves decisions on pricing and crediting for unpaid lunches up to districts. That means that policies around the U.S. vary and are inconsistent. Federal guidance on how to proceed would be welcomed, the School Nutrition Association’s Pratt-Heavner said.
Noah Atlas, Anoka-Hennepin’s child nutrition program director, said the district’s meal costs to parents are among the lowest in the state. Still, 1% of the district’s 38,000 students owe money and approximately 250 students, or 0.7% – owe more than $250. Approximately 120 students, or 0.3%, owe more than $350. In recent years, the district’s meal debts have jumped. In the 2011-12 to 2012-13 school years, the debt increased 6%. But the numbers soared by a 61% increase between the 2012-13 and 2013-14 school years, followed by a 48% increase between the 2013-14 and 2014-15 school years.
Atlas said he’s concerned because debt is surfacing earlier for students. Previously he’d seen seniors with $500 to $700 in debt during their school career. Now, it’s common to see some middle school students incurring $1,000 debts.
The Minnesota Department of Education noted in a 2014 memo that price-reduced or paid meals must be available to eligible children if they have money in hand. The department added that a school “may take legal action against a household which has not settled its food service debt.”
Source: Collections and Credit Risk
