Colleges have the authority to hold back academic transcripts, grade reports, and diplomas if students fail to meet their financial and administrative obligations to the college. These obligations may include unpaid education loans, participation in exit counseling, outstanding fines, and other debts owed to the college. It’s important for students who find themselves in this situation to understand the following information.
Exit Counseling
According to the Higher Education Act of 1965, colleges are required to offer exit counseling to borrowers, although participation is not mandatory. If a borrower withdraws without the school’s knowledge or fails to complete exit counseling, the school must provide counseling materials either online or by mail. Corresponding regulations outline the requirements for conducting exit counseling, and schools must document compliance. It’s worth noting that exit counseling helps reduce the likelihood of loan default, so colleges may want to withhold academic records and diplomas to encourage participation.
FERPA
The Family Educational Rights and Privacy Act (FERPA) grants students the right to review and access their education records. If circumstances prevent a student from inspecting the records in person, colleges are required to provide a copy of the records. Academic transcripts fall under the definition of education records, and colleges are obligated to provide students with unofficial copies of their transcripts. Official transcripts do not need to be provided unless otherwise specified by the college. However, colleges may indicate on the unofficial transcripts that they are unofficial copies and may also note any outstanding financial obligations.
Freedom of Information Act
The federal Freedom of Information Act (FOIA) does not specifically address academic records, but state versions of the FOIA often exempt academic transcripts from disclosure. This means that students cannot use a FOIA request to obtain their academic transcripts from a public college. Private colleges are not subject to the Freedom of Information Act.
US Department of Education Guidance
In a Dear Colleague Letter, the US Department of Education stated that colleges have the discretion to withhold academic transcripts in cases of default on Title IV loans. However, this guidance is not mandatory. Although previous editions of the Federal Student Aid Handbook explicitly permitted colleges to withhold official transcripts, this guidance has been removed from subsequent editions.
HEAL Loans
For Health Education Assistance Loans (HEAL), colleges are authorized to withhold academic transcripts for borrowers who are in default, with the exception of those who have filed for bankruptcy. The withholding of services, including academic transcripts, is allowed by law in these circumstances.
Bankruptcy
Colleges are not allowed to withhold official transcripts once a bankruptcy petition has been filed or after the discharge of education debts under Chapter 7 or Chapter 13. This is due to provisions in the bankruptcy code that prohibit collection activities and discrimination against debtors who have filed for bankruptcy. However, colleges may have the right to withhold transcripts outside of a bankruptcy case based on contract law.
State Law
State laws may vary, so colleges should consult legal advice to understand the specific regulations regarding the withholding of academic transcripts. In many cases, colleges are permitted to withhold transcripts for failure to fulfill financial obligations, except in cases involving bankruptcy.
Recommendations
In order to enforce the right to withhold transcripts, colleges should establish clear policies outlining the circumstances under which transcripts will be withheld. These policies should be communicated through the application process, student handbooks, and college catalogs. It is important to specify the types of financial obligations that may result in transcript withholding and to make exceptions for bankruptcy cases. Additionally, colleges should provide students with unofficial copies of their transcripts and may indicate on these transcripts any outstanding financial obligations.
