(WASHINGTON) — The Federal Reserve paused its aggressive series of interest rate hikes on Wednesday, ending a string of 10 consecutive rate increases that stretches back 15 months.
Nearly all members of the decision-making committee believe the central bank will need to impose at least one additional rate hike this year, Fed Chair Jerome Powell said at a press conference.
“Considering how far and how fast we’ve moved, we judged it prudent to hold the target range steady,” Powell said.
“Looking ahead, nearly all committee participants view it as likely that some further rate increases will be appropriate this year,” he added.
In turn, the Federal Reserve raised its projection for where interest rates will stand at the end of the year.
The decision to pause interest rate hikes came a day after fresh data showed consumer prices rose 4% last month compared to a year ago, cooling more than economists expected and bolstering hopes that inflation will continue its steady return to normal levels.
Inflation has fallen significantly from a peak last summer but remains at a level double the Federal Reserve’s target of 2%.
Powell said “inflation pressure continues to run high and the process of getting inflation back down to 2% has a long way to go.”
The slowdown of price increases has coincided with a sharp escalation of the Federal Reserve’s benchmark interest rate last seen in the 1980s.
Economists surveyed by Bloomberg expected the Federal Reserve to pause rate hikes as it assesses the ongoing effect of its previous policy decisions.
For more than a year, the Federal Reserve has aimed to roll back price increases by slowing down the economy and slashing consumer demand.
Data released in recent months suggests that the policy approach has succeeded in slowing economic activity.
U.S. gross domestic product grew by a sluggish 1.1% annualized rate over the three months ending in March, according to government data.
Meanwhile, three of the nation’s 30 largest banks failed over a weekslong stretch beginning in March.
While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.
Consumer spending and hiring, however, have remained solid, fueling hope among some economists that policymakers can succeed in dialing back inflation while averting a recession.
A jobs report earlier this month showed that the labor market grew robustly in May, adding 339,000 jobs compared to Wall Street estimates of just 195,000.
Since the economy continues to exhibit strength, the expected Federal Reserve decision to pause rate hikes marks a “close call,” Bank of America said in a research note last week.
“While incoming data point to resilience in activity and stickiness in inflation, the Fed appears to desire additional time to monitor policy lags and regional bank stress,” Bank of America said.
“We do not believe the Fed is close to signaling a prolonged pause,” the bank added. “Instead, we expect the Fed to say that inaction in June is more akin to a skip — for now.”
Upon the announcement of the central bank’s most recent rate hike last month, Fed Chair Jerome Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement that said “some additional policy increases might be appropriate.”
Powell described the omission in the announcement as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”
(NEW YORK) — Instant Brands, the parent company of beloved kitchenware and houseware brands like Pyrex glassware and Instant Pot, has filed for Chapter 11 bankruptcy protection.
Earlier this week, Instant Brands announced the voluntary court-supervised process in a press release, stating that it will give the company “time and flexibility” for ongoing discussions with financial stakeholders to move forward in a way that “strengthens the company’s financial position.”
The company has over $500 million in both assets and liabilities, according to its filing with the U.S. Bankruptcy Court for the Southern District of Texas.
The Chicago area-based company said it received a $132.5 million commitment for new debtor-in-possession financing from its existing lenders that, paired with cash from current operations, it expects will support the business during the process.
President and CEO Ben Gadbois said in Monday’s press release that the company “continues to drive positive operating cash flows.” However, after weathering the COVID-19 pandemic, the company faces challenges, including “tightening of credit terms and higher interest rates,” he said.
This had caused an impact on the company’s liquidity levels and made its “capital structure unsustainable,” he said.
Four years ago, private-equity firm Cornell Capital acquired Instant Brands and it merged with Corelle Brands. Additional consumer products under the parent company include Corelle, Snapware, CorningWare, Visions and Chicago Cutlery.
(WASHINGTON) — The Federal Reserve is expected to pause its aggressive series of interest rate hikes on Wednesday, ending a string of 10 consecutive rate increases that stretches back 15 months.
The decision arrives a day after fresh data showed consumer prices rose 4% last month compared to a year ago, cooling more than economists expected and bolstering hopes that inflation will continue its steady return to normal levels.
Inflation has fallen significantly from a peak last summer but remains at a level double the Federal Reserve’s target of 2%.
The slowdown of price increases has coincided with a sharp escalation of the Federal Reserve’s benchmark interest rate last seen in the 1980s.
Economists surveyed by Bloomberg expect the Federal Reserve to pause rate hikes on Wednesday as it assesses the ongoing effect of its previous policy decisions.
For more than a year, the Federal Reserve has aimed to roll back price increases by slowing down the economy and slashing consumer demand.
Data released in recent months suggests that the policy approach has succeeded in slowing economic activity.
U.S. gross domestic product grew by a sluggish 1.1% annualized rate over the three months ending in March, according to government data.
Meanwhile, three of the nation’s 30 largest banks failed over a weekslong stretch beginning in March.
While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.
Consumer spending and hiring, however, have remained solid, fueling hope among some economists that policymakers can succeed in dialing back inflation while averting a recession.
A jobs report earlier this month showed that the labor market grew robustly in May, adding 339,000 jobs compared to Wall Street estimates of just 195,000.
Since the economy continues to exhibit strength, the expected Federal Reserve decision to pause rate hikes marks a “close call,” Bank of America said in a research note last week.
“While incoming data point to resilience in activity and stickiness in inflation, the Fed appears to desire additional time to monitor policy lags and regional bank stress,” Bank of America said.
“We do not believe the Fed is close to signaling a prolonged pause,” the bank added. “Instead, we expect the Fed to say that inaction in June is more akin to a skip — for now.”
Upon the announcement of the central bank’s most recent rate hike last month, Fed Chair Jerome Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement that said “some additional policy increases might be appropriate.”
Powell described the omission in the announcement as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”
(NEW YORK) — Wawona Frozen Foods, Inc. has issued a voluntary recall on large bags of frozen fruit that were sold at Costco Wholesale stores in five states.
The recall includes year-old, 4-pound packages of Wawona Frozen Foods Organic DayBreak Blend that were distributed from April 15, 2022, to June 26, 2022.
“The DayBreak Blend includes organic frozen strawberries grown in Mexico which may have the potential to be contaminated with Hepatitis A,” a recall notice posted on the U.S. Food and Drug Administration website stated.
The impacted products were sent to Costco locations across Arizona, California, Colorado, Utah and Washington.
Wawona Frozen Foods said the recall was issued “out of an abundance of caution” and that there have been no reported illnesses as of time of publication.
“While the Organic DayBreak Blend was distributed to Costco stores last year, they have ‘Use By’ dates of 09/23/2023, 09/29/2023, 09/30/2023 and 10/18/2023 therefore consumers are urged to check their freezers for the recalled blend, not to consume it and either discard the product or return it to the store for a refund,” the recall notice stated.
The products are no longer available in store for purchase and any Organic DayBreak Blend products currently on shelves with different lot codes or purchase dates are not subject to this recall.
“Wawona Frozen Foods is fully cooperating with federal health officials as well as Costco to ensure consumers are alerted about the recalled Organic DayBreak Blend distributed by Wawona Frozen Foods last year,” the recall notice stated.
Click here for full product images and lot code information.
Hepatitis A is “a vaccine-preventable liver infection caused by the hepatitis A virus,” according to the U.S. Centers for Disease Control and Prevention.
“Hepatitis A is very contagious,” the CDC states. “It is spread when someone unknowingly ingests the virus — even in microscopic amounts — through close personal contact with an infected person or through eating contaminated food or drink.”
The hepatitis A virus can remain active in frozen foods.
According to the CDC, people who contract hepatitis A “may feel sick for a few weeks to several months but usually recover completely and do not have lasting liver damage.”
“In rare cases, hepatitis A can cause liver failure and even death; this is more common in older people and in people with other serious health issues, such as chronic liver disease,” the CDC states.
Symptoms of hepatitis A can include fatigue, nausea, stomach pain and yellowing of the skin known as jaundice, and can last up to two months, according to the agency.
“The best way to prevent hepatitis A is to get vaccinated,” the CDC states.
(NEW YORK) — Popular Reddit pages, known as “subreddits,” with names like /r/funny, /r/sports, /r/todayilearned and /r/music are currently inaccessible for new posts in a protest over planned changes to the website.
The protest is over how the company plans to reshuffle pricing for its application programming interface, or API, which is the code that allows third parties to build apps. In recent years, the API also has been used to train artificial intelligence programs like ChatGPT.
Both OpenAI, the company behind ChatGPT, and Google, which makes a similar chatbot called Bard, use Reddit data to train their systems.
In April, as AI-powered chatbots soared in popularity, Reddit announced it was planning to change the pricing to access its API. Engadget Senior Editor Karissa Bell said the move was intended to crack down on companies that use Reddit’s API for AI programs.
“A lot of these companies had been training using Reddit’s data, because it was open and because their APIs were readily accessible,” said Bell. “So, at the time Reddit said, ‘hey, we are not going to be allowing these big companies, which are extremely profitable, to access all of our data for free.’”
But soon after, other companies that use Reddit’s API began raising concerns, saying the changes make the API too expensive and could take many popular Reddit-based apps out of commission.
“Third party developers, who make these Reddit clients, started sounding the alarm and saying, ‘hey, we’re probably not going to be allowed to continue operating our services at these prices,’” said Bell.
Christian Selig is the developer behind the app “Apollo,” which he said has about 1.5 million monthly active users. He told ABC Audio that Reddit’s move to charge for access to its API wasn’t completely unexpected.
“It is something in the back of my head that I thought they’d entertain at some point,” he said. But the actual cost ended up being much more expensive than he was anticipating.
Selig said his company would have to pay $20 million annually for API access. “I don’t see how this pricing is anything based in reality or remotely reasonable,” Selig wrote in a post on Reddit, adding, “I hope it goes without saying that I don’t have that kind of money or would even know how to charge it to a credit card.” Apollo said it would shut down its app on June 30, when the new API pricing goes into effect. Other apps, like ReddPlanet and Sync, have announced similar moves.
The prospect of losing apps like Apollo prompted some Reddit users to coordinate a protest of the pricing changes.
“Thousands and thousands of these subreddits have said that they’re going to ‘go dark,’ which means that they’ll be setting their communities to ‘private’ so people who aren’t subscribers can’t access them,” said Bell.
On Monday morning, visitors to Reddit were greeted with a variety of messages from some of the platform’s most popular communities. The subreddit /r/Music currently displays a message that says it is “Closed Indefinitely for Reddit API Policy Change Protest.” The /r/aww subreddit, which is dedicated to cute images, notes that it has gone private “due to Reddit’s decision to effectively kill 3rd party applications with their API costs. If or when /r/aww returns will depend on Reddit’s continued responses to the situation.”
“Reddit’s historically had a massive focus on being, like, a very community-driven website,” said Selig. “And now that, just, everybody feels very unheard and dismissed, I think that it’s not surprising that there’s some pushback there.”
Selig said he’s in favor of a pricing structure that differentiates between companies that use it for artificial intelligence programs, and those that use it for apps like Apollo.
“Of course, bills need to be paid and they need to have a sustainable platform going forward, and they need to charge bills to do so” said Selig. “But do so in a way that respects the community and makes them feel like they’re not being taken to lunch.”
Not all subreddits have joined the protest. Moderators of the popular /r/AskReddit continue to allow new posts, writing in part “as mods of a community dedicated to conversations, we think it’s more impactful to keep the subreddit open so people can discuss this controversial change and the surrounding impacts.”
In response to a request for comment, Reddit spokesperson Tim Rathschmidt drew attention to the “efficiency” of certain third-party Reddit apps – that is, how often they use the company’s API. “Some apps are more efficient (and require significantly less API calls),” said Rathschmidt, adding, “Apollo is notably less efficient than other third-party apps.”
Last week, Reddit CEO Steve Huffman took to Reddit to answer questions about the API changes. In his introductory post, Huffman told users “we respect when you and your communities take action to highlight the things you need, including, at times, going private.”
(NEW YORK) — Consumer prices rose 4% last month compared to a year ago, dropping more than expected and bolstering hopes that inflation will return to normal levels.
The fresh data for May arrives a day before the Federal Reserve will announce its latest rate decision as it determines whether to extend an aggressive series of rate increases last seen in the 1980s.
Inflation slowed significantly from where it stood in April, when data showed a 4.9% jump in consumer prices compared to a year ago. The latest reading, however, is still double the Federal Reserve’s inflation target of 2%.
The cooling of prices suggests the Federal Reserve has gained further traction in its effort to decelerate economic growth and slash prices while averting a recession.
Economic growth slowed at the outset of this year amid a decline in business investment and residential fixed investment, which includes money spent on home buying and construction, data showed.
U.S. gross domestic product grew by a 1.1% annualized rate over the three months ending in March, according to government data.
Meanwhile, three of the nation’s 30-largest banks failed over a weeks-long stretch beginning in March.
While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.
However, recent economic indicators suggest resilient economic performance.
A jobs report earlier this month showed that the labor market grew robustly in May, adding 339,000 jobs compared to Wall Street estimates of just 195,000.
The inflation data on Tuesday marks the final contribution of evidence to Federal Reserve deliberations that will culminate with a rate decision on Wednesday.
Economists expect the central bank will pause its longstanding series of rate hikes as it awaits further effects from its previous escalation of the benchmark interest rate.
Upon the announcement of a rate hike last month, Fed Chair Jerome Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement that said “some additional policy increases might be appropriate.”
Powell described the omission in the announcement as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”
(NEW YORK) — For Haley Reyes, there were two questions looming over her senior year in high school at the Urban Assembly New York Harbor School in Manhattan.
First, was whether she’d get into her dream school of Syracuse University.
Second, was how she’d pay for it without going into crushing debt.
The sticker price at the private university tops $85,000 a year for tuition and housing, even as Syracuse says most students receive some type of aid.
Reyes, whose father died when she was 12 and whose mom earns a middle-class wage to support three kids, qualified for just $5,000 in federal grant money.
Her best option would be to snag merit-based grants and scholarships, which seemed out of reach for a student whose family could afford the basics. The other option is debt — tens of thousands of interest-bearing loans from the government in the hopes that one day her income will be high enough to pay it back.
“You start to wonder, is my family going to help me? Are the loans going to be enough?” said Reyes.
This month, the Supreme Court is set to weigh in on President Joe Biden’s plan to forgive some student loans for 44 million Americans, which he says will offer young Americans “breathing room” after the pandemic. But even if the high court greenlights the program, it won’t benefit the Class of 2023, which faces record-high tuition costs.
The answer for most of them will still be debt, adding to the already eye-popping $1.6 trillion owed to the Education Department — a number that is triple what it was 15 years ago, according to the government, and has turned the federal agency into a major U.S. bank.
In interviews throughout their senior year, Reyes and other graduating students told ABC News they were no longer convinced a college degree was a kind of golden ticket that could help them achieve their dreams. Several students cited online posts by strangers lamenting their debt and the lack of high-paying jobs.
Still, the high school seniors said they saw few other options to find a high-paying job. The question of affordability can be a tough calculation, particularly for young people footing the bill on their own.
“Since most people don’t pay the sticker price, it’s a very weird thing to have one of the biggest expenses in your life have a price tag on it that’s completely unknown,” said Phillip Levine, a professor of economics at Wellesley College who wrote a book on the complexities of college pricing.
“That doesn’t happen really in anything else that you buy: a house, a car, nothing else, you always have at least some idea. A college education? For the most part, you really just don’t know,” he said.
It’s a system even Education Secretary Miguel Cardona agrees is broken.
In an interview with ABC News, Cardona said he believes higher education remains a great “equalizer.” Graduates of four-year universities still outearn their peers with only a high school degree and are less likely to face unemployment. And in addition to the student loan forgiveness plan, the Biden administration has expanded programs that erase debt for teachers and public servants, while lowering monthly loan repayments based on income.
But avoiding burdensome debt often still depends upon family money, not merit — something Cardona says the country should pull together to fix.
“Think about the wasted talent and potential in this country because we’re not making it more affordable. It works for some, but not enough,” Cardona told ABC News.
The reason for soaring college costs is complex. Republicans argue dumping government money into the education system through loans has mostly encouraged colleges to spike prices. They want to pull back on the federal loan program or eliminate it entirely, steering kids like Reyes toward trade schools or affordable community colleges instead.
Democrats, on the other hand, point to years of disinvestment in higher education during the Reagan administration and by state governments that pushed costs back onto students.
“I think we’re all to blame,” said Javaid Siddiqi, president and CEO of The Hunt Institute, a North Carolina-based nonprofit organization that focuses on education research and policy.
One problem, he said, is that communities encourage kids to dream of college to better their lives, but there’s little infrastructure supporting lower-income or middle-class kids to navigate the system. One example is the form to apply for financial aid. The form, known as the “FAFSA,” is so cumbersome to fill out that some $3.6 billion in Pell Grant money was left on the table last year.
“We need more disruptors who are willing to think differently and think about it from a consumer standpoint,” said Siddiqi.
Reyes’ close friend, Trinity Jennings-Pagan, whose dream school is Harvard, says it’s not fair for politicians to push lower-income high school students toward trade schools or community college that might be less expensive but not be a good fit.
“It’s almost like telling someone they’re not worth school when there’s a price tag that is out of their reach … I believe education is a right,” said Jennings-Pagan.
Sara Harberson, a former college admissions officer who now runs her own consulting business called Application Nation, said their ability to pay full price definitely makes a difference. Colleges will typically favor enrolling students who can pay more than those who require financial aid, she said. That’s in part because wealthy alumni prefer to donate to a football stadium or a building named in their honor than to donate to financial aid programs.
“I felt very strongly that the most important thing that a college can invest in is going to be that financial aid budget so that you can get the strongest student body possible,” she said of her time as an admissions counselor. “But, you know, sometimes, the football stadium is going to win out.”
In the end, both Reyes and Jennings-Pagan aren’t going to their dream schools. Reyes decided against applying, believing it would be a “useless application” since she couldn’t afford it.
Jennings-Pagan, whose grades were exceptional despite her own family hardship, was offered a free ride at Syracuse and agreed to attend there in fall. She said she has embraced Syracuse and has let go of Harvard as the “perfect” school.
For Reyes, she is worried that her academic struggles in her early teen years — when she was still grieving the loss of her dad only to be hit with a global pandemic and isolated from her peers — will make her ineligible for financial help, even though they don’t reflect the student she is now.
This spring, she was accepted at the University at Albany, an in-state public research university whose sticker price is about a third of Syracuse. But she says she still needs scholarships to cover about $10,000 a year — an unfathomable sum for someone just entering adulthood. One scholarship program has already rejected her.
She wonders, will there be a job after college to pay it all back?
“College is like a gamble,” she said. “It is never guaranteed to ever (get you) where you want to be. Like there is always something in the way.”
(NEW YORK) — Policymakers and consumers on Tuesday will closely watch the release of fresh data on consumer prices, which will show whether inflation has continued its monthslong slowdown.
The inflation data for May arrives a day before the Federal Reserve will announce its latest rate decision as it determines whether to extend an aggressive series of rate increases last seen in the 1980s.
Consumer prices rose 4.9% in April compared to a year ago, extending a steady decline from a peak last summer and bolstering hopes that inflation would continue its return back to normal levels.
Inflation is expected to have slowed in May to 4.2% compared to a year ago, according to a consensus forecast from FactSet reported by Morningstar. While a significant cooling of price increases, such a measure would still stand at more than double the Federal Reserve’s target of 2%.
A slowdown of inflation in May would suggest that the Federal Reserve has gained further traction in its effort to decelerate economic growth and slash prices while averting a recession.
Economic growth slowed at the outset of this year amid a decline in business investment and residential fixed investment, which includes money spent on home buying and construction, data showed.
U.S. gross domestic product grew by a 1.1% annualized rate over the three months ending in March, according to government data.
Meanwhile, three of the nation’s 30-largest banks failed over a weeks-long stretch beginning in March.
While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.
However, recent economic indicators suggest resilient economic performance.
A jobs report earlier this month showed that the labor market grew robustly in May, adding 339,000 jobs compared to Wall Street estimates of just 195,000.
The inflation data on Tuesday will mark the final contribution of evidence to Federal Reserve deliberations that will culminate with a rate decision on Wednesday.
Economists expect the central bank will pause its longstanding series of rate hikes as it awaits further effects from its previous escalation of the benchmark interest rate.
Upon the announcement of a rate hike last month, Fed Chair Jerome Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement that said “some additional policy increases might be appropriate.”
Powell described the omission in the announcement as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”
(NEW YORK) — Jose Velasquez Castellano said he first worked on a farm when he was 8 years old. At age 13, he began working shifts as long as 12 hours each summer in a tobacco field.
“My mom was going through a little rough patch financially,” Castellano, who grew up in Greensboro, North Carolina, after emigrating from Mexico, told ABC News. “I didn’t want to be there — I wanted to be back home playing outside like my other friends.”
Children aged 12 and older in the U.S. are legally permitted to work long days in tobacco fields outside of school hours in part because child labor laws are relatively lax in agriculture compared to other sectors.
Castellano, an undergraduate student at Tufts University, is raising alarm about a recent rise in the use of child labor and a Republican-led effort in some statehouses to relax child labor law, allowing children to work longer hours with less oversight.
Critics like Castellano are backing a push to strengthen federal law that protects child workers.
Proponents of weaker child labor restrictions say they afford young people greater opportunity to develop work ethic and build savings. The push for such measures comes amid a tight labor market that has made it difficult for some businesses to hire workers.
The number of children illegally employed rose 69% since 2018, the Department of Labor found in February. Over the previous fiscal year, 835 companies investigated by the department had employed more than 3,800 children in violation of the law.
“We’ve got to think about what children are being affected by this – it’s the children desperate enough to work longer because they need the money,” Castellano said. “Work is going to consume them.”
Bills that aim to weaken child labor laws have been introduced or passed in 10 states over the last two years, according to a study from the left-leaning Economic Policy Institute released in March.
The bills soften requirements for additional paperwork for child workers and expand the hours during which minors are allowed to work.
Iowa enacted a law last month that permits 14- and 15-year-olds to work two extra hours each day that coincides with school, raising the limit from four to six hours. Such children are also able to work until 9 p.m. for the majority of the year and until 11 p.m. between June 1 and Labor Day, increasing the limit by two hours.
“In Iowa, we understand there is dignity in work and we pride ourselves on our strong work ethic,” Republican Gov. Kim Reynolds said in a statement last month after signing the measure. “Instilling those values in the next generation and providing opportunities for young adults to earn and save to build a better life should be available.”
Proponents of strengthening child labor restrictions have turned to Congress, reintroducing a bill on Monday that would address the relatively weak standards applied to minors working in agriculture.
The bill, called the Children’s Act for Responsible Employment, would raise the minimum age for young farmworkers working where their parents are employed from 12 to 14, and increase the minimum age for hazardous farm work from 16 to 18, according to Reid Maki, the director of child labor advocacy for the National Consumers League and coordinator of the Child Labor Coalition.
“We really feel it’s unfair for kids in this one sector to be exempted from child labor laws,” Maki told ABC News.
Castellano, who supports the bill, said he hopes minors don’t have to experience what he did.
“At the end of the day, these are children,” he said.
(NEW YORK) — Millions of dollars in unpaid school lunch debt have been mounting in districts across the country, and one Virginia mom is on a mission to settle the bill in her local community.
Adelle Settle feels a student’s ability to pay for their meal at the school cafeteria should never get in the way of their success.
“Food is so crucial and such a critical part of all of our lives,” Settle told ABC News’ Good Morning America.
For years, Settle has been raising money for schools one call or social media post at a time, to help students in Virginia focus on their studies and not their stomachs.
“I want to make sure that no school is left holding the lunch bag, so to speak, for so many kids that haven’t been able to pay their lunch debt,” she said.
According to the U.S. Department of Agriculture, approximately 4.9 billion school lunches were served to children nationwide through the National School Lunch Program in fiscal year 2019, prior to the pandemic, with 74% provided for free or at a reduced rate. (The agency notes that “a higher share of the meals served in FY 2020 and FY 2021, [approximately 99% in 2021,] were served free or at a reduced-price, attributable in large part to a USDA pandemic waiver allowing for meals to be provided free of charge to all students.”)
This school year, students have amassed record lunch debt with districts across the country reporting $19.2 million in lunch debt accumulated since November of last year, according to a 2023 School Nutrition Trends Report by the School Nutrition Association.
“I got to believe that’s doubled or tripled since,” Lori Adkins, president of the School Nutrition Association, told GMA about the debt numbers. “When you’ve got an unpaid meal debt it’s got to be paid for. So, it will eventually fall to the general fund.”
In Prince William County, the second largest school district in Virginia, schools have already racked up more than $300,000 worth of lunch debt.
Adam Russo, the director of School Food and Nutrition Services in Prince William County, told GMA that’s “pretty typical,” especially in the wake of COVID-19.
“We knew our families were a little confused coming back from the pandemic and not understanding that meals had a cost associated with them,” he said, referring to the pandemic waivers, which the Trump administration previously extended through June 2021.
That provision was further extended under the Biden administration, but officially ran out at the beginning of this school year.
California was the first of five states to make universal school lunch permanent, starting in school year 2022-2023. Maine has also since made its school lunches permanently free.
At least three other states — Colorado, Minnesota and New Mexico — have passed permanent free school lunch measures starting in school year 2023-2024, according to the Food Research and Action Center.
Dozens of other states have similar pending legislation.
Russo said “one of the biggest barriers” to getting students to sign up for these free and reduced meals is “pride.”
“They don’t necessarily want a handout from a government entity,” he said.
Settle echoed that sentiment.
“There were times where I might have just gone without lunch instead of applying for free and reduced because my mom was very proud and she didn’t want to take advantage of of any programs if she didn’t absolutely have to,” she said, recalling her own childhood.
Since starting her nonprofit “Settle the Debt” in 2017, Settle has raised more than $190,000 to pay off school lunch debt in her district — more than $50,000 this year alone — which has been a big help, she said, but serves as a bandage on a bigger problem.
She said she has also advocated for several pieces of legislation at the state level that, among other things, ensure students are fed and that their school lunches are not thrown out because they can’t pay for them.
Settle said she’ll know she’s done enough “when Settle the Debt is no longer needed and we can close our doors and not raise any more money for a school meal debt, because there’s no more need.”
