Let’s talk about our national school nutrition program.
I’ve been learning about the program with an aim to find ways to help pay off some debt. On one hand, I really dig learning complex systems. On the other hand, the idea with Vivront.com is to kickoff some cash and pay down some school lunch debt. With enough scale, eliminating the account debt is in range at a national level.
The motivation to focus on lunch debt comes from being a recipient of reduced lunches growing up. I want to help school kids eat without the same kind of friction, shame and else that I experienced.
So, is it still happening? The debt? Yes. The average debt per student account was ~$170 in 2019. Some 75% of schools in America report carrying unpaid meal debt. It is spread out on individual student accounts and it follows kids from year to year. The operation and business folks in a school can look up this individual or cumulative number. However, it’s not typically published in audited yearly financials. This was surprising to me. As it turns out the debt is typically brushed away in a general fund clean up, if the year was good enough. Read “fewer teachers.”
Anyway, in the whole scheme of things the total debt amount could be seen as not so bad. You just have to think of the scale of the whole program vs specific families with hundreds (or thousands) of dollars in debt. The whole program feeds roughly 30M kids a day! At $3.66, a recent USDA reimbursement amount, the runs ~$110M per school day for lunch alone. Add breakfast at $1.97 each and weekend/evening support and this is big business.
With ~165 days of school a year there are billions spent on the lunch and nutrition programs. All those vendors for food, distribution and equipment all have reps, salespeople, manufacturing teams, transport and logics folks - all working in support of the numerous nutrition professionals at the schools. It’s quite the system we have that’s feeding our kids at school.
The kids and families that typically run debt on their accounts don’t receive federal government billions on their accounts because they don’t have accounts that qualify. Those accounts are typically ones that don’t have a completed application OR are on-the-line between reduced and full price lunch on the basis of household income. In a MN city of ~50k people and ~8k students the current account debt, even after the last two years of fully subsidised meals, is $83,000.
Reduced lunch is offered to a family of 4 with a household income between ~$34k & ~$49k a year. It’s free if under ~34k. There are some ~20M of those students. Yet, only 1.7M (out of ~60M total) students were on the reduced program in 2019 - the most up-to-date data. Doesn’t that seem like a smaller number of kids than live in homes that would qualify? I think so.
So, why don’t student accounts qualify? Based on my interviews with Nutrition Directors many families simply don’t “fill out the application” or “complete the form.” Therefore, they don’t receive support.
I remember “filling out the form” being perceived as something like publicly admitting you were poor. Ick. Who wants to do that? After working so hard to not be poor, it’s hard to fathom - much less fill out - a form that confirms it. This social dynamic can shed light on families going without support because they simply don’t submit the forms.
When a family that would qualify for subsidised lunch does not fill out the form their lunch burden of $2 a week ($.40/lunch) becomes $18.30 a week. That’s a $65/mo delta that thin household budgets are not configured to sustain. And yet, as it seems, pride is a very powerful force and forms don’t get filled out.
In other cases, I’ve heard from Directors about families making $10 too much per week to be considered for the reduced program. Those families are on the bubble per se. While they make $40 more per month than those “on the program,” the cost of the lunch at full boat puts the family’s household under the other family by $25 on a monthly basis. The line needs to be drawn somewhere and when it is the chips fall where they fall. As a result, kids run debt on their school lunch accounts.
A word about universal meals. There has been a push for them. You might have heard of it. Maybe we’ll get them. However, with some 7.7M kids paying full freight on school lunch each day, a universal meal program is effectively asking the Gov to pay $28M a day, or $4.6B a year that is currently paid by families for lunch alone (sans pandemic). For that reason it seems unlikely that universal free meals will be a thing of the future.
So what do we do? We adjust program dynamics on the national level or we raise more money on the local levels, or things stays the same and the general fund is stuck with the bill. Those are the options.
But, for our bits in this issue, let’s look at the founding of the program. What was its original intent? Then we’ll hit the current context regarding labor, supply chain and the expiring USDA waivers.
Bit #1 • Founded in the 40s!
It was Truman, in 1946, who signed the program into law. At that time it was only focused on school lunch (breakfast did not join the fold until the mid 60s). It was a “measure of national security, to safeguard the health and well-being of the nation's children and to encourage domestic consumption of nutritious agricultural commodities.” Link.
Before the 40’s teachers and mothers’ clubs ran programs as volunteer efforts in schools. Many of them were supported by charities and New Deal efforts in the 30’s - during The Great Depression. Fast forward and now food insecurity impacts some portion of the programs efforts while childhood obesity and the educational importance of nutritious foods impacts all the other portions. Our national nutrition problems have shifted and become more complex in the last 80 years.
Bit #2 • Labor & Supply Chain
The cost of almost everything has increased in recent years. There is little sign of change on the horizon. If the cost increases for school lunch are not pandemic related then a war on the other side of the world is driving increases in costs of goods, food, transportation and overall daily operations. Schools and their meal programs are not immune to these impacts just because they are non-profits funded by the government. Infact, many of them are so low on food supply that they are running day-to-day right now where the norm is multi-month supply reserves and long range planning.
Furthermore, many of the ingredients and products required to meet government nutrition requirements for reimbursement have spotty availability. This further destabilizes the reimbursement process for school meals. If the nutrients in the meal don’t match the requirements, regardless of availability, there is no reimbursement for those meals. There is some flex in the system right now with the waivers but they will be removed in the near future.
Additionally, staffing challenges are compounding pressure on budgets. One district I recently reviewed has identified the top 3 major initiatives for ‘22 to be hiring, staff retention and staff training. That seems like most businesses and the rest of the economy, right? And yet this specific community has a change.org petition running to gain signatures to change things because of how bad they perceive things are with the program. I bet things would get better if they could just staff the place. The more I study the context for school nutrition programs the more firmly I believe the deck is stacked against them. Staffing and supplies are just part of the issues.
Bit #3 • The waivers are running out in June
While congress directed the USDA to adjust operational rules and increase funding for school meals at the beginning of the pandemic, the “waivers” and funding adjustments are set to return to 2019 pre-pandemic, pre-war, conditions in June of 2022. The waivers were not included in the 2022 omnibus bill.
If and when this happens it is going to create more pressure on product acquisition, more pressure on staffing, more pressure on planning, more pressure on pre-2020 contracts, more pressure on budgets in the food program and ultimately the general funds of our schools. All of that also puts more pressure on students and families “on the bubble.”
It’ll likely look something like this. After two years of not paying for lunch nor paying much attention to it being free of forms and free of cash payments, numerous families will again need to fill out some paperwork that says they are poor this Fall. Those that don’t will start accruing debt again. Given the current context, that debt is likely to grow faster than we’ve seen before because of the larger numbers it will impact.
During the School Nutrition Association conference in DC a few weeks back the debt on student accounts was brought up a few times among the ~650 attendees from around the country and in each case it was with strong emotion. One of the strongest times was when a room full of nutrition professionals cheered as one of them implored a USDA panel to [… do something about the student account debt.] Another was when it became clear that congress left the waivers out of the omnibus bill someone sitting at my table who knew I was working on the debt issue leaned over and forcefully said “You think debt is a problem now? Wait until those waivers expire.”
When the waivers expire the lunch programs will need to dust off their collection skills or find some other ways to raise cash. Many of them sell high margin (typically lower food value) ala carte products to keep from going in the red. Most, if not all districts, forbid schools and programs from working directly with for-profit businesses to raise money. That’s new to me this week and Vivront fits squarely in that bucket. And the USDA funds that are dispersed, frequently if not always, specifically restrict those funds from being used to pay down debt. Again, it seems the deck is stacked against the nutrition programs.
Sum
The national school lunch program is in a tricky spot and that puts our local schools and neighbors in an equally tricky spot. The programs will make it but it’s going to continue to be bumpy and complicated for awhile. While the program’s roots and mandate are in funneling US farm products to students and combating malnutrition, our school lunch program’s current adverse realities in supply chain irregularities, staffing dynamics and the elimination of pandemic waivers add to already complex operations while increasing uncertainty. It’s very likely that your local school’s are projecting and will run 2022-2023 food programs in the red. The same goes for individual student accounts. Buckle up. The pandemic will continue to produce waves for nutrition programs and our communities.
Change
To the degree you can, fill out the school forms for your school aged kids - even the school lunch form and even if you don’t need the support. It sets the president that we all can fill out the form.
Encourage your neighbors and community members to do the same.
Raise money or donate to your school lunch program’s debt balances. Contact your Director of Nutrition or Director of Business Services for how to donate.
Volunteer in the lunch room if opportunities arise. It’s fun and you will certainly be helping because most are short staffed.
Wonder with me how artsonia.com, local Chipolte restaurants for XYZ school group, and the likes of the publicly traded company Scholastic Corp (NASDAQ: SCHL) work with our schools to raise money for our schools. Directors of Nutrition are telling us they can’t work Vivront to raise money to pay off lunch debt because of policy. We must be missing something. But, what?
On Your Way
May you be enjoying the Spring weather fully. Bask in the early glimpses of Summer sun. Enjoy a warm drink more intensely on days that are cooler than you’d like. There are only so many left before the hot August afternoons arrive. :)
Onward.
Order your knives sharpened at Vivront.com.