New Federal Regulations End Transcript Withholding

by Alondra Cabrera

Effective July 1, 2024, the U.S. Department of Education will enforce regulations that prohibit educational institutions from withholding transcripts due to unpaid fees. This is significant because withholding transcripts can severely hinder students’ ability to continue their education or secure employment.

Impact on Students and Employment Opportunities

The new rule ensures that students can access their academic records to pursue further education or job opportunities. Without a transcript, students can’t transfer to other schools. Additionally, some employers require a college transcript for hiring, making access to these records essential for students’ career advancement. Learn about other background checks employers may request here.

Historically, many colleges and universities have withheld transcripts from students who owe money. This makes it difficult for them to transfer to other institutions since transcripts are typically required as part of the transfer application process. This tactic pressures students into paying their owed balances. The new regulations address this issue by ensuring that institutions cannot withhold transcripts for unpaid balances related to courses funded through Title IV federal financial aid programs. Title IV programs include various forms of federal financial assistance, such as Pell Grants, Direct Loans, and Federal Work-Study.

Currently, eleven states prohibit transcript holds in all or most situations. These include New York, California, Colorado, Maine, Minnesota, Washington, Ohio, Illinois, Indiana, Connecticut, and Oregon.

Transcript Withholding Policies

According to the National Association of College and University Business Officers (NACUBO), the new transcript policies underline that institutions cannot withhold transcripts—or take other negative actions against a student—in cases where a debt on a student’s account results from an error made by the institution in administering Title IV funds, or when there is fraud or misconduct by the institution or its employees. Moreover, institutions must provide an official transcript to a student for payment periods when the student received Title IV aid and all institutional charges for that payment period were paid or included in an agreement to pay. Institutions can also utilize other existing methods of collecting a balance on a student’s account.

Biden-Harris Administration’s Efforts  

The Biden-Harris Administration announced these final regulations to enhance oversight and accountability for higher education institutions and strengthen consumer protections for student borrowers. The new rules aim to protect students and taxpayers from the negative effects of sudden college closures, restrict colleges from withholding course credits paid for with federal money, and require colleges to clearly communicate financial aid details to students.

College closures and financial instability at institutions create big costs for students and taxpayers. Research from the U.S. Government Accountability Office and the State Higher Education Executive Officers Association finds that when colleges shut down, it disrupts students’ education, often ending their education journey. This also means taxpayers lose money, as they must cover unpaid loans.

“With these final rules, the Biden-Harris Administration is fixing a broken system, which failed to protect students and families, and addresses abuses in higher education that have cost taxpayers billions of dollars in recent years. We are raising the bar for accountability and making sure that when students invest in higher education, they get a solid return on that investment and a greater shot at the American dream.” said U.S. Secretary of Education Miguel Cardona in the official press release by the U.S. Department of education.

The final regulations build on the Biden-Harris Administration’s efforts to hold colleges accountable, protect students and taxpayers, and ensure that all students can afford to get the education and skills they need. View the official copy of the final regulations here and a fact sheet on the final rule can be found here.

About the Author/s

Alondra Cabrera is the Editorial Assistant at New Jersey Digest. She recently graduated from Montclair State University with a degree in Communication and Media Studies. During her time at school, she discovered her passion for journalism and content creation. In her free time, she loves to create and edit videos for her corgis, Rafi and Toffe, and indulge in culinary adventures with her friends. Alondra also enjoys traveling, cooking, and working out. She is excited to embark on her professional journey in media and looks forward to contributing her skill and creativity to her role here at New Jersey Digest.

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