Months after a school district in Rhode Island generated national media attention for hiring a collection agency to try and recover unpaid lunch fees, it appears as though the partnership is working out for both sides, as other districts are forced to take similar steps.
There was a national outcry when the city of Cranston, R.I., hired Transworld Systems to collect $90,000 in unpaid lunch debts. Six months later, the collection agency has recovered about $10,000 of that total. The agency is sending collection letters to families that have not made a payment for at least 60 days on a debt that exceeds $20. Calling it a “soft approach” to collections, the unpaid debts are not being reported to credit bureaus and families receive applications for free or reduced-price lunches.
Meanwhile, the school district in Cumberland, R.I., has hired F.H. Cann & Associates to try and help collect on $47,000 in unpaid lunch debts. Families were ignoring letters, emails, and phone calls from the school district to pay off the debts, said Paul DiModica, the chairman of the Cumberland school committee. The district had earlier decided to stop a policy where students with unpaid lunch debts were given only a cheese sandwich.
“It backfired on us,” DiModica said. “Our last resort was to hire a collection agency.”
A bill has been introduced in Congress that would prevent school districts from hiring collection agencies to recover unpaid lunch debts, with the federal government footing the bill instead.
In the meantime, as more school districts grapple with tighter budgets and mounting lunch debts, there might be an opportunity for collection agencies willing to take a more gentler approach to collections.