Four of Nebraska’s largest school districts use debt collectors to go after unpaid lunch tabs

The boy ordered 79 meals during the 2019-20 school year: Chicken fingers, mac & cheese, corn puppies, French toast sticks, hot dog, stuffed-crust pepperoni pizza. 

A court document labeled “Exhibit A” lists them all in plain black text. 

In total, he ate $194 worth of lunches at Clinton Elementary in Lincoln. When his parents failed to pay the entire amount, the school district referred the rest, $53, to a private debt collection agency that sued the boy’s parents in late 2020. 

The company won the case and garnished wages earned by the family’s breadwinner for several months.

Lincoln Public Schools turned over nearly 1,700 such school lunch debts to collector Professional Choice Recovery last school year. The average debt the district referred to the agency: $67.

Most of Nebraska’s urban school districts, including all in the Omaha area, have found ways around sending parents to collections over unpaid lunch tabs.

But four of the state’s 20 largest districts – Lincoln, Kearney, Columbus and Scottsbluff – use private collectors to recoup unpaid lunch tabs, according to a Flatwater Free Press analysis.

The Nebraska Legislature is considering a bill that would ban the practice of sending unpaid school meal debts to collection firms.

Districts’ use of collection agencies primarily hurts working-class families who live paycheck to paycheck but earn too much money to qualify for free or reduced meals, said bill sponsor Sen. Danielle Conrad.

Sending lunch debts to collections can plunge parents into a “spiraling series of harm” that starts with a stress-inducing barrage of collection letters and ends with wage garnishment and damaged credit scores, the Lincoln Democrat said.

Nebraska school districts that use collection agencies say the longstanding practice helps their meal programs stay afloat amid challenging economic circumstances. It also holds families responsible for the deficits they accrue, said Kate Murphy, the food service director for Kearney Public Schools. 

If Conrad’s bill passes, it would remove the incentive for parents to pay their kids’ lunch bill, Murphy said.

At a hearing on the proposal last month, several members of the Legislature’s Education Committee were surprised to learn that districts refer meal debts to collectors. 

Sending parents to collections over small sums is “absolutely absurd,” said Sen. Joni Albrecht, a Republican from Thurston, noting that lawmakers boosted state K-12 funding last year to cover these kinds of expenses.

The COVID-19 pandemic put a heavy strain on public schools and the families that relied on them, but the mass expansion of a federal school meal program temporarily took one burden off their plate by making lunches free.

Since the universal free lunch program expired in 2022, lunch debts have risen across the country, according to survey data from the School Nutrition Association.  

Despite that uptick in debts, the use of private debt collectors remains a relatively uncommon practice nationally, said SNA spokeswoman Diane Pratt-Heavner.

Conrad first noticed LPS’ debt collection policy years ago while reading through the student-parent handbook for her kids’ school. The lawmaker said she tried behind the scenes to get the district to abandon the practice without luck.

“It really struck me as strange and out of alignment with LPS’ values that they had this policy,” Conrad said. 

Last school year, LPS referred lunch debts to third-party collectors at a far greater rate and over lower amounts than any other district contacted by the Flatwater Free Press.

The state’s second largest district sent 1,681 meal debts to Professional Choice Recovery, according to data obtained through a public records request. About 940 students owed the debts, meaning that LPS referred some families to collections more than once. 

More than a quarter of the debts were under $50, and only one exceeded $200. The debt collector recovered about $43,000 of the $112,000 owed by LPS families and got a 40% cut of the cash.

LPS’ nutrition program operated in the black last school year, bringing in about $1.9 million more than it spent. 

However, the district cannot use those dollars to write off lunch debts, so the money would have to come out of LPS’ general fund, which pays for staffing and operations, said Liz Standish, associate superintendent for business affairs.

So far, LPS has preferred not to go in that direction, but the district is reviewing its policies, Standish said.

Districts in Scottsbluff and Kearney have referred lunch debts to collections much more sparingly and usually as a last resort when indebted parents failed to respond to repeated messages about their kids’ negative balances, school leaders said. 

Scottsbluff Public Schools sent about 50 debts to collections last school year and all were over $100. The district recouped 9% of the roughly $12,500 it was owed.

Kearney Public Schools referred nearly 60 debts averaging $500 in the last year. The collector has gotten back less than 2% of the $29,500 owed.

Columbus Public Schools began using a private collection firm for the first time after last school year because unpaid meal balances exceeded $56,000. 

The district referred 194 families that owed more than $50 to the collector, but it has held off on reporting any parents to credit bureaus that could lower their credit scores. If debts aren’t paid by June, the district will report to the bureaus, said Superintendent Troy Loeffelholz. 

Jack Moles, director of the Nebraska Rural Community Schools Association, wrote in testimony to the Legislature’s Education Committee that only four of the more than 70 rural schools he surveyed had ever used a collector for lunch debts.

Murphy, the Kearney nutrition director, said her district has to pay its bills, but she wishes “the government would make meals free for everybody.”

From South Sioux City to North Platte, Nebraska’s other urban school districts have found alternatives to the debt collector.

Omaha Public Schools has an income-based federal designation that allows it to serve breakfast and lunch to students for free regardless of economic status. 

Millard Public Schools referred parents to collections before the pandemic, but the suburban Omaha district has since abandoned the practice.

A handful of districts, including Fremont and Grand Island public schools, told the Flatwater Free Press, they use money from their general fund to cover unpaid meal balances. 

Other districts have relied on the generosity of donors in their community.

Norfolk Public Schools recently landed a couple of four-figure donations to cover past-due meal accounts.

One came from brother and sister Lincoln and Brooklyn Wingate, who sold cookies and cider to raise nearly $2,500 for the district, according to the Norfolk Daily News.

A group of local businesses led by Daycos, a transportation-oriented financial services company, pooled together $1,650 to cover Norfolk lunch debts.

Daycos Chief Operations Officer Andrea Libengood learned about school meal debts from a Facebook page tied to her nearby hometown of Battle Creek.

Libengood and her colleagues decided to give to NPS as part of the company’s annual holiday donation program. Through word of mouth, they got a dentist, a bank and construction company to pitch in, too.

“It was a slam dunk – let’s do it for the kids,” Libengood said. “We were unaware of the cause, and it just connected with us so much.” 

The Flatwater Free Press is Nebraska’s first independent, nonprofit newsroom focused on investigations and feature stories that matter.