New Jersey bill would limit college transcript holds

Dive Brief:

A bill working through New Jersey’s legislature would mostly prohibit the state’s colleges from withholding academic transcripts for money students owe on nontuition expenses.
Colleges would also still be able to block access to the academic records of students who owed more than $2,000 worth of what the bill deems “non-mandatory charges,” which are those outside of tuition, room, board and other fees.
The General Assembly, the legislature’s lower house, passed the bill in December. It then moved to the Senate Higher Education Committee.

Dive Insight:

Student success advocates argue institutions should not refuse to share academic transcripts over relatively inexpensive fines or fees. This can affect students’ futures, as they generally need their records to apply to graduate school or transfer to another institution. Sometimes they also need them to seek employment.

In some cases, transcript holds can stop students from earning credentials if they can’t repay their balances. An estimated 6.6 million students have such “stranded credits,” according to a 2020 report by research nonprofit Ithaka S+R — and they are more likely to be adult or low-income students, or those who are members of racial or ethnic minority groups.

Campaigns to end the practice of transcript withholding predate the coronavirus pandemic, but in recent years the issue has gotten new attention as the spread of COVID-19 fueled inequities.

U.S. Education Secretary Miguel Cardona in December 2021 called for colleges to reconsider use of transcript holds, saying they prevent retention and degree completion among underserved students.

And the U.S. Consumer Financial Protection Bureau in September determined blanket policies for withholding transcripts from students who owe outstanding debt “are abusive under the Consumer Financial Protection Act.”

The consequences of holding back students’ paperwork “are often disproportionate” to their original debt amount, the bureau wrote.

“This heightened pressure to produce transcripts leaves consumers with little-to-no bargaining power while academic achievement and professional advancements depend on the actions of a single academic institution,” it wrote.

In New Jersey, nearly 140,000 students are estimated to be unable to access their records because of unpaid balances that average about $2,800, according to Ithaka S+R’s data.

The state bill — which would apply to any New Jersey institution licensed to offer academic degrees — clarifies colleges can require students to strike a repayment plan if they owe tuition, fees or more than $2,000 in “non-mandatory charges.” The college would then give students access to their transcript after the first payment.

Colleges would have to provide students their transcripts no matter what if they intend to apply for or refinance student loans.

Several other states and higher ed institutions have moved to restrict transcript holds. California and Colorado are among the states to prohibit transcript withholding.

And the State University of New York and City University of New York, two mammoth public higher ed systems, early last year said they permanently would do away with the practice.