Over 25% of college students study in a state with a ban on transcript withholding, according to the Student Borrower Protection Center.
Matthew Arrojas Matthew Arrojas Read Full BioMatthew Arrojas is a news reporter at BestColleges covering higher education issues and policy. He previously worked as the hospitality and tourism news reporter at the South Florida Business Journal. He also covered higher education policy issues as.
Updated on May 8, 2024 Darlene Earnest Darlene Earnest Read Full BioDarlene Earnest is a copy editor for BestColleges. She has had an extensive editing career at several news organizations, including The Virginian-Pilot and The Atlanta Journal-Constitution. She also has completed programs for editors offered by the D.
Learn more about our editorial process Matthew Arrojas Matthew Arrojas Read Full BioMatthew Arrojas is a news reporter at BestColleges covering higher education issues and policy. He previously worked as the hospitality and tourism news reporter at the South Florida Business Journal. He also covered higher education policy issues as.
Darlene Earnest Darlene Earnest Read Full BioDarlene Earnest is a copy editor for BestColleges. She has had an extensive editing career at several news organizations, including The Virginian-Pilot and The Atlanta Journal-Constitution. She also has completed programs for editors offered by the D.
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Many colleges and universities withhold transcripts for students with institutional debt, but now a dozen states have adopted laws to ban this practice in recent years.
Advocates for these laws have called the practice unfair to students looking to transfer schools, as many students cannot transfer when their transcripts are withheld. In some cases, minor debts of less than $100 can block a student’s ability to access their own transcript.
Virginia was the most recent state to enact a bill forbidding the practice in April 2024. The Virginia measure goes into effect on July 1, 2024. It bans transcript withholding when a student’s debt is below $500 or below $1,000 if the student was a Pell Grant recipient.
That brings the grand total of states with transcript withholding bills to 12, including:
Virginia may have been the latest state to pass a ban, but Oregon's law was the latest to go into effect on Jan. 1, 2024.
It’s worth noting that Indiana's law doesn’t ban all transcript withholding. It instead bans colleges and universities from withholding a transcript if a student paid between $100-$300 toward their debt within the past year, depending on the amount owed.
Approximately, 1 in 4 students across the U.S. studies in a state that offers protection from transcript withholding, according to an analysis from the Student Borrower Protection Center (SBPC).
"States have historically set the agenda in addressing the student debt crisis. We applaud leaders in New York and other states who are leading the way in framing the policy response to institutional debt," Mike Pierce, executive director at SBPC, said in a statement. "As more states prohibit transcript withholding as a debt collection tactic, they are also looking to the future and asking 'How can we help students with the underlying debt itself?' Now is the time for education and consumer advocates to come together to get this right."
Most schools that utilize transcript withholding do so when a student owes any debt to the institution. A 2020 report from research group Ithaka S+R estimates about 6.6 million current and former students, many of them adults who stopped out, owed as much as $15 billion as of 2018. The average unpaid balance was $2,300.
Without their transcripts, many students aren't able to transfer to different schools or graduate from their college. This leads to what some call "stranded credits."
An analysis from the Coalition of Higher Education Assistance Organizations counts nine states where legislatures have introduced bills that would ban the practice of transcript withholding at public universities since 2021. None of those bills, however, passed.
Those states included:
Virginia would later pass a bill banning transcript withholding, so long as the balance owed by the student was below a set threshold.
The Department of Education finalized new regulations in October that limit transcript withholding nationally.
The regulations state that colleges and universities that receive and distribute federal financial aid must provide student transcripts for any period that a student received federal aid and did not have outstanding debt to the school. This means that in some instances, institutions will be forced to provide some of a student’s transcripts, whereas before, they may withhold all the student’s records no matter when the debt occurred.
Colleges and universities may also not withhold transcripts if the student owes funds due to an error committed by the institution, the rule states.
