California led the nation in 2020, outlawing a debt collection practice that sometimes kept low-income college students from getting jobs or advanced degrees. But five years later, 24 of the state\u2019s 115 community colleges still said on their websites that students with unpaid balances could lose access to their transcripts, according to a recent UC Merced survey.<\/p>\n
The communications failure has been misleading, student advocates said, although overall, students have benefited from the law.<\/p>\n
It \u201craises questions about what actual institutional practices are at colleges and the extent to which colleges know the law and are fully compliant with the law,\u201d said Charlie Eaton, a UC Merced sociology professor who led the research team that conducted the survey in October.<\/p>\n
California community colleges say they are following the law, which prohibits them from refusing to release the grades of a student who owes money to the school \u2014 anywhere from a $25 library fine to unpaid tuition.<\/p>\n
The misinformation on some community college websites is a clerical problem that campuses have been asked to update, officials said.<\/p>\n
Any community college whose website still shows the unpaid debt warning is doing so in error, the California Community Colleges chancellor\u2019s office said.<\/p>\n
The chancellor\u2019s office said in an emailed statement that it had informed colleges of the law several times \u2014 when it was passed and again in recent years:<\/p>\n
\u201cMany of our colleges have small teams managing content-rich websites with a large number of pages. Because of this, occasional delays in updates can happen despite best efforts.\u201d<\/p>\n
Nine of those colleges said the language was outdated, and some pledged to remove it after a reporter inquired. The rest did not provide an explanation.<\/p>\n
Why the law is important<\/p>\n
Without their official transcript, a student can\u2019t prove they earned college credits to admissions offices elsewhere or to potential employers. Millions of students nationwide have lost access to their transcripts because of unpaid fees, according to estimates from the higher education consulting firm Ithaka S+R.<\/p>\n
Student advocates argued that the practice made little money for colleges, while costing graduates opportunities that could help them pay back their debts.<\/p>\n
California lawmakers agreed; in 2019, they passed legislation that took effect on Jan. 1, 2020, barring colleges from using transcript holds to collect debts.<\/p>\n
At least 12 other states<\/a> have followed California\u2019s lead, passing laws limiting or banning colleges from withholding transcripts.<\/p>\n A similar but less stringent federal rule approved during the Biden administration took effect last year.<\/p>\n The new rules have raised awareness about colleges\u2019 debt collection practices and inspired some to find ways to help their students avoid falling behind on their payments in the first place or to pay off what they owe \u2014 including by forgiving their debts.<\/p>\n When colleges choose to withhold transcripts, the burden falls more heavily on low-income students and students of color<\/a>, according to the American Assn. of Collegiate Registrars and Admissions Officers. Often those students accrue debts when they withdraw partway through a course, leading the college to return part of their financial aid to the federal government and charge the bill to the student.<\/p>\n In states with laws limiting transcript withholding, many colleges have begun communicating earlier and more often with students about their debts and offering flexible payment plans, said Elizabeth Looker, a senior program manager at Ithaka S+R. Some have added financial literacy training or required students with unpaid bills to meet with counselors.<\/p>\n In California, some community colleges used federal COVID relief money to forgive students\u2019 debts.<\/p>\n Student advocates said they worry federal enforcement will fall by the wayside as the Trump administration breaks apart the Department of Education. The department did not respond to questions about how it was enforcing the federal restriction on transcript withholding<\/a> or whether it plans to make any changes to it.<\/p>\n Transcript withholding was never an especially effective collection tool for schools, researchers have found. One 2018 study estimated that Ohio\u2019s public colleges netted only $127 for each transcript they withheld<\/a>.<\/p>\n Colleges and universities, however, argued that withholding transcripts was one of the few ways they had to prevent students from bouncing among institutions and leaving unpaid bills in their wake.<\/p>\n Some colleges in states with transcript withholding laws have found other ways to pressure students who have unpaid debts, including increasingly preventing students with unpaid balances from registering for classes or sending more debts to collection agencies.<\/p>\n The California experience<\/p>\n When the California ban was being debated, the University of California system predicted it would lose $10 million to $12 million a year as a result, and that the restriction \u201cmay drastically increase the number of students who are sent to collection agencies.\u201d The California State University system put the annual financial toll in the hundreds of thousands of dollars.<\/p>\n Five years later, Cal State spokesperson Amy Bentley-Smith said the university hasn\u2019t tracked whether those financial losses have actually occurred, and the University of California declined to provide any figures about the law\u2019s financial impact.<\/p>\n Another California bill<\/a> this year \u2014 which would have given students a one-time pass to register for courses, even if they owed a debt \u2014 failed after UC, CSU and private colleges and universities opposed it.<\/p>\n The University of California cited expected cuts to federal and state funding as one reason it opposed the bill.<\/p>\n \u201cUC believes that maintaining the ability to hold registration is essential for its ability to reasonably secure unpaid student debt,\u201d UC legislative director Jessica Duong wrote to lawmakers.<\/p>\n Bentley-Smith said that CSU wanted a flexible approach to debt collection and that campuses had started eliminating registration holds for minor debts such as parking tickets and lost library books.<\/p>\n \u201cStudents are able to move forward with their enrollment even with institutional debts in the low hundreds to the low thousands of dollars, depending upon the university,\u201d she said.<\/p>\n Supporters of the failed bill \u2014 which also would have barred colleges from reporting a student\u2019s institutional debt to credit agencies \u2014 said curbing aggressive debt collection doesn\u2019t just help low-income students; it speeds up the training of workers in industries crucial to the state\u2019s economy.<\/p>\n \u201cSchools think about these institutional debts in a way that is very penny-wise and pound-foolish, and it\u2019s preventing people from participating in the economy,\u201d said Mike Pierce, executive director of Protect Borrowers.<\/p>\n How one student fought back<\/p>\n Annette Ayala of Simi Valley took her for-profit college to court to force it to comply with the state\u2019s debt collection law.<\/p>\n She had earned her vocational nursing license from the school, the Professional Medical Careers Institute, and wanted to continue her studies to become a registered nurse. But the college refused to release her transcript \u2014 citing a $7,500 debt that Ayala argued in court records she did not owe \u2014 and without the transcript she could not apply to other colleges.<\/p>\n In her case, California\u2019s Bureau for Private Postsecondary Education, which regulates for-profit colleges under the state\u2019s Department of Consumer Affairs, cited her former school<\/a> for violating the state\u2019s transcript withholding law.<\/p>\n The college was fined $1,000 and ordered to update its enrollment agreement. The school forgave the debt it said Ayala owed. It\u2019s the only case in which a school has been cited for withholding a transcript since the bureau started monitoring compliance with the law more closely two years ago, said Monica Vargas, a spokesperson for consumer affairs.<\/p>\n School officials had been unaware of the California law at the time Ayala sued, and have since updated their catalog to comply with it, the school\u2019s controller, Joshua Taylor, said.<\/p>\n With her vocational nursing license, Ayala has been working in home healthcare. Now that she has her transcript, she\u2019s applying for RN programs, and said her salary would roughly double once she has the new degree, allowing her to save for the future and help her son pay for college.<\/p>\n \u201cYou\u2019ve got to give people the chance to get through their program and pay their debts as they\u2019re working,\u201d she said. \u201cYou can\u2019t hold them back from being able to make top dollar with their abilities to pay back these loans.\u201d<\/p>\n