At 19, Karly Schwab was hit with a debt that would take her seven years to pay off at the University of Colorado at Boulder. It stemmed from her parents filing for bankruptcy, she said, a decision she didn’t realize would affect the federal loans she used to pay for her freshman education.
“My sophomore year, it had an impact on the loans I was eligible for, but it wasn’t something I realized until I had already started the semester,” recalls Schwab, now 27. years. “At that point, I didn’t think too much about it and decided I just had to finish the semester.”
Struggling with a financial burden she would carry for years, she then dropped out of school and started working.
“I moved around a lot and didn’t really get a notice from (CU Boulder), until the point where I was with a debt collector, which ended up almost doubling the debt I had. already due,” Schwab said.
Schwab wanted to finish his studies: “I always wanted my education. I always wanted my degree,” she said. But until she paid off the last of her debts in February, she couldn’t access the credits she had earned, keeping a degree out of reach.
Get morning headlines delivered to your inbox
“I now have all the credits I need to get my associate’s degree, so I’m almost there, but the fact that it took me seven years to be able to pay for this and continue my education, that really put such a mess on my life,” Schwab said. “And yeah, it’s hard to get a good, well-paying job to pay off those debts if I can’t continue my education.
Until this month, colleges in Colorado were legally allowed to deny a transcript or degree to any current or former student who owed a school money. Debt can range from a few dollars for a parking ticket to thousands of dollars for class credits, as in the case of Schwab.
Everything changed on April 21 when Governor Jared Polis signed Internal Bill 22-1049 in the law. The Legislation – sponsored by Representatives Jennifer Bacon of Denver and Naquetta Ricks of Aurora, as well as the Senses. Jeff Bridges of Greenwood Village and Brittany Pettersen of Lakewood, all Democrats – requires colleges and universities to provide transcripts to most students who need them to apply for a job, continue their education or engage in the army, whether or not the student has a debt to the school. The ban does not apply to foreign students.
The law doesn’t mean debt will go away for people who owe a school money, but withholding transcripts can’t be used as a debt collection tactic in many cases.
“Unfortunately, we’ve seen, even during the pandemic, over the past two years, that people have to make tough decisions about what they can afford,” Bacon said during the bill signing, “and know that a transcript or diploma can be held up by parking tickets breaks our hearts.
The law was backed by New Era Colorado, which advocates for young people on Capitol Hill on progressive issues such as student debt reform and economic justice. During the pandemic, New Era began to hear of people who were trying to find a job or further their education but found themselves unable to access their transcripts due to unpaid debts, Morgan Royal explained. , acting deputy director of the organization.
“At the end of the day, we fundamentally believe that you should have access and control of these really important documents, because you should have access and control of your education,” Royal said in an interview.
Institutions warn of dire financial consequences
Republicans, on the side of Colorado colleges and universities who have warned that the bill could hurt their financial viability, opposed HB-1049. During the Senate debate, some cited troubling numbers provided by colleges and universities that lobbied against the legislation or pushed for significant changes.
“Higher education institutions have said the impact on tuition fees, if we lose this ability to get people to pay what they owe, would be (an) 8-14% increase in tuition fees “said Senator Paul Lundeen, a Republican landmark. ” It’s huge. So what you do then is you increase the burden of higher education on everyone to protect a small number who choose not to interact in a meaningful customer-business relationship” by paying off their debts.
Jeremy DeLeon, an accounts receivable specialist at Colorado Christian University, told members of the Senate Education Committee at a March 17 hearing that HB-1049 would force the school to send more students to debt collection. , which also entails additional costs for the institution. as a prejudice for these students.
“We have to ask ourselves, where is the responsibility?” said DeLeon. He explained that once students with unpaid debts requested transcripts, the school helped them set up a payment plan so they could pay the fees they owed to access the documents. The payment plan would allow these students to avoid being sent to an outside debt collection agency.
The practice of withholding transcripts, until a few years ago, was just standard everywhere for pretty much every school… So this comes from a place almost so normal that it wasn’t even not remarkable except for people who it was really detrimental.
– Winston Berkman-Breen, Center for Student Borrower Protection
Senator Barbara Kirkmeyer, a Republican from Brighton, introduced an amendment to HB-1049 in the Senate that would have required students in debt to enter into a payment plan with a college or university before gaining access to their transcript or diploma .
Institutions “have been very clear that if there’s no payment plan required,” she said, “if they can’t get the student to pay within a reasonable amount of time, they will send it to debt collection”. This leads to adverse consequences for the student, lowering his credit score and thus preventing him from being able to buy a car or a house in the future, she pointed out. Bridges said providing a transcript shouldn’t depend on a payment plan, and Kirkmeyer’s amendment was lost in the Democratic-controlled House.
Lawyers question schools’ arguments
The arguments against HB-1049 echoed those used by colleges and universities elsewhere in the country to justify withholding transcripts from students who have debt, according to Winston Berkman-Breen, deputy director of advocacy and policy advice at the Student Borrower Protection based in Washington, DC. Center. Berkman-Breen’s organization has supported legislative efforts to restrict or ban the retention of transcripts in states including Colorado, Washington, California, Maine and New York.
“The practice of withholding transcripts, until a few years ago, was the norm everywhere for virtually all schools,” Berkman-Breen said in an interview. “So it’s coming from a place that’s almost so normal that it wasn’t even remarkable except to people who it was really hurting.”
When asked how much the banning of withholding transcripts would cost them financially, schools would add up the debt owed directly to them by alumni, which could amount to millions of dollars, Berkman said. Breen.
“But then when they were interviewed,” he added, “they couldn’t actually tell you on an annual basis how much they brought in because of the withholding of transcripts as a tool. ” He described the calculations as “bogeyman accounting”.
“It’s very different to talk about your wholesale outstanding balance versus the effectiveness of the one tool we’re trying to prohibit in collecting that balance,” Berkman-Breen said.
Limited data is available to demonstrate the actual effectiveness of the practice of withholding transcripts in getting students to repay their debts. However, opponents of the practice have their doubts. They argue that with or without the ability to withhold transcripts, schools can contact students about outstanding debts, ask them to enter into a payment plan, or ultimately send them to debt collection.
A research paper 2018 by attorney Rebecca Maurer of the Student Borrower Protection Center found that the withholding of transcripts by Ohio colleges recoups about 7 cents of every dollar for those schools.
“Transcript withholding as a practice is so counterproductive,” Royal said, pointing out that many people don’t know they owe a school money until they try to access it. to their transcript. “It’s a passive debt collection tool.”
The law includes data collection, accountability requirements
HB-1049 addresses lack of data on transcript withholding by requiring institutions to report annually, beginning in 2024, the number of students whose records they are withholding and the number of overdue accounts sent for collection of receivables. This information will be compiled by the Department of Higher Education and reported to state legislators.
The final version of HB-1049 requires institutions to provide a transcript or diploma to students who can demonstrate that they need it for one of five specific purposes: applying for a job, transferring credits, requesting a financial aid, joining the army or the National Guard. , or pursue “other post-secondary education opportunities.”
Colleges and universities are required under the new law to develop policies that explain how a current or former student can verify that they need their transcript or diploma; and give the student the option, but not the obligation, to set up a payment plan. However, the law does not say exactly how institutions can require proof that the document is necessary for one of these purposes.
An amendment to the bill in the Senate sought to provide some accountability by allowing the student loans ombudsmanan existing position within the state attorney general’s office, to investigate and track complaints from students who face barriers to accessing their documents.
“No one’s job is done when the law is passed. Implementation is so important,” Berkman-Breen said. “Schools should make it very clear on their websites: If you do any of these five things, you need to get your transcript no matter what. They can’t bury that in the fine print.
Comments are closed.