Federal and state policies try to curb transcript withholding

The practice known as transcript withholding—where U.S. colleges and universities refuse to release transcripts to students who owe past-due tuition and fees—has come under fire from federal and state officials. Without access to their transcripts, students have difficulty applying for jobs that would help them pay off their student debt or transferring to other postsecondary institutions to pursue further education. New federal and state efforts aim to regulate or restrict transcript withholding and discourage the practice among institutions that need additional oversight, according to The Hechinger Report

Related: Rethinking transcript holds for students with outstanding balances >

Federal efforts to limit transcript holds

In October, the Department of Education announced new rules going into effect July 2024 that would prohibit colleges from withholding credits that students paid for with Title IV federal financial aid. Schools lose eligibility for that aid if they are found to be violating those regulations.

However, the provisions would not apply to institutions that do not take part in federal aid programs. “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,” Edward Conroy, a senior policy advisor at the progressive think tank New America, tells The Hechinger Report. “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.”

Preventing transcript withholding at non-Title IV schools

To protect students enrolled in schools that do not qualify for federal financial aid, the Consumer Financial Protection Bureau (CFPB) last year announced that refusing to release transcripts to students owing institutional loans was unlawful. The CFPB, which has oversight of private student lenders—including higher education institutions that offer loans directly to students—has the jurisdiction to investigate non-Title IV institutions that refuse transcript requests. Blanket withholding of transcripts to compel student borrowers to repay institutional loans “is an abusive practice under the Consumer Financial Protection Act,” the CFPB said.

Although no single federal entity bans transcript holds, advocates hope new regulations will eventually discourage institutions from the practice altogether. Eleven states, including New York, California, and Colorado, have banned transcript withholding, Forbes reports. Experts also point to the effect Colorado’s recent policies have had on limiting transcript holds at the state level. In 2022, Colorado enacted a law that prohibited institutions from withholding transcripts from students requesting them for employment, the military, or transferring to another college. The law also mandated that those schools track how many students request transcripts and how many were withheld. The Colorado Department of Education says that as a result, many Colorado institutions found it too difficult to maintain those policies and, as a result, granted all requests. 

“It wouldn’t completely surprise me if one of the institutional reactions was, ‘We’re just going to stop doing this, period,’” Conroy tells The Hechinger Report.

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