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To Florina Caprita, the mother of three young children, the paralegal studies program at Ashworth College seemed like the perfect route to a much-needed career. The classes were entirely online, and an admissions officer told her she could make small monthly payments toward the $4,465 tuition while she was taking classes, instead of having to pay it all at once.
But in 2018, a family emergency forced her out of school, just six credits shy of her degree. To make matters worse, she fell behind on her monthly payments, which had steadily increased from $25 to more than $200.
She struggled financially for several years as her health declined, but last spring, she got an opportunity to earn a degree at a different college. The problem? Ashworth, an unaccredited, for-profit school in Georgia, refused to release her transcript until she paid – in full – the more than $2,200 that she owed them.
This practice, known as transcript withholding, has become a growing worry for state and federal regulators. Critics say that it makes it harder for students to earn a degree or get a job, which would allow them to earn enough to pay back their debts. But the system of oversight is patchwork; no single federal agency bans it, state rules vary and there are significant challenges with monitoring the practice. That means students like Caprita can fall through the cracks.
In October, the Department of Education released new rules that would bar colleges from withholding a transcript for any semester for which a student used federal student aid money and paid their balance in full. The move was lauded by advocates as a huge step forward in eradicating the practice – but would not apply to any of the thousands of schools that don’t accept federal student aid to begin with, including Ashworth College.
Experts have long criticized authorities for not providing better oversight of these schools.
“Some of these schools exist that way because they would never qualify, and that’s usually because they provide very low value to students, unfortunately,” said Edward Conroy, a senior policy advisor at the progressive think tank New America. “Not in all cases, but a lot of these programs are not lifting people out of poverty, they’re not providing a route to middle class jobs or middle-class income, and so I think sometimes they’re of questionable value.”
Unlike the Department of Education, the Consumer Financial Protection Bureau does have jurisdiction over colleges that don’t qualify to receive federal money. And in the past year, the agency has begun investigating colleges for refusing to release transcripts because of a loan balance owed directly to the school.
“If they help me, I can help to pay them. If they withhold [the transcript] from me, then I how can I ever pay them?”
Florina Caprita, who has an outstanding loan from an online for-profit university
In 2022, the agency found that transcript withholding was an abusive practice under the Consumer Protection Act, “designed to gain leverage over borrowers and coerce them into making payments.”
The CFPB has adopted a broad definition of what a student loan is. They include in that category things like payment plans, arguing that those are essentially forms of credit. Money owed for things like unpaid room and board balances or overdue fines, however, is not covered.
By their definition, Caprita should have been eligible to access her transcript. But she says she called and emailed the college repeatedly to no avail. She even asked to re-enroll in a new payment plan but college officials said their hands were tied and she would have to take up the matter with a collection agency.
“If they help me, I can help to pay them,” said Caprita, who is 44 years old and is hoping to join a Christian ministry. “If they withhold it from me, then I how can I ever pay them?”
Ashworth College did not respond to requests for comment.
A CFPB official acknowledged that it’s impossible to examine the policies of all of the thousands of colleges and universities across the country. The bureau has tried to make enough public statements for institutions to take note and change their policies without additional intervention, the official said. The agency has investigated some colleges for transcript withholding and made them change their practices but has not released any institution names publicly.
The education department’s rule on transcript withholding will go into effect in July 2024, joining other federal and state regulations meant to protect students from transcript withholding.
An education department spokesperson said that the agency plans to adjust its oversight procedures to ensure that schools that receive federal funding are following new regulations and that all student complaints alleging transcript withholding are investigated. Schools may eventually lose eligibility to receive federal student aid if they don’t comply with the new rule.
“It wouldn’t completely surprise me if one of the institutional reactions was, ‘We’re just going to stop doing this, period.’ ”
Edward Conroy, senior policy advisor, New America
Despite the fact that the regulation only applies to students who have used federal money to pay for their education, advocates hope that colleges will respond in a broader way.
“It wouldn’t completely surprise me if one of the institutional reactions was, ‘We’re just going to stop doing this period,’ ” Conroy said. “The number of students who are paying completely out of pocket isn’t that big; you don’t want to have separate administrative systems.”
Indeed, that’s what some policymakers have seen happen at the state level. Some states have only banned the practice at public institutions or for debts of up to a certain amount. In other cases, schools are only required to release transcripts for certain uses.
For instance, in 2022, Colorado passed a law prohibiting withholding transcripts from students requesting them for several reasons including needing to provide it to an employer, another college or the military. Carl Einhaus, a senior director at the Colorado Department of Education says that most institutions found it too burdensome to differentiate between which transcript requests were required by law to be honored and which weren’t and have opted to grant all requests.
“They’re not going to bother trying to figure out how to operationalize this very difficult thing to operationalize,” he said.
Starting next summer, the Colorado law also requires institutions to submit data about how many students requested transcripts and how many were withheld. Einhaus said that some schools initially resisted the new law, arguing that it would take away one of their main tools to recover money owed from students. “It will be interesting to see if this really is having an impact on the amount of debt they’re able to collect back,” he said.
But Brittany Pearce, a program manager at the higher ed consulting firm Ithaka S+R, is skeptical that withholding transcripts was ever an effective way to recoup debt. “From a really practical business sense, nobody is winning,” she said.
This story about transcript withholding was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter. Check out our College Welcome Guide.
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