Planned Virginia Legislation Would Limit Transcript Withholding: Report

Virginia may join a growing number of states that ban the practice of withholding transcripts from students over unpaid debt.
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Published on December 20, 2022
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  • Several states have already banned colleges from withholding transcripts from students.
  • A Virginia lawmaker wants to add Virginia to that list with legislation that would ban colleges from withholding transcripts in some instances, according to VPM.
  • The Consumer Financial Protection Bureau earlier this year wrote that blanket transcript-withholding policies over debt are an "abusive practice."
  • Various other states have introduced similar legislation to ban the practice, which the CFPB says is meant to "coerce" students into making payments.

A Virginia lawmaker wants to ban the state's colleges from withholding transcripts from students in certain situations, mirroring a nationwide trend against the practice.

Democratic state Sen. Ghazala Hashmi's plans to reintroduce legislation that would ban colleges from withholding transcripts if students need them to get financial aid, serve in the armed forces, or apply to higher education or jobs, according to VPM.

More wide-reaching legislation from Hashmi passed the state Senate last year but stalled in the House of Delegates.

Hashmi's legislation will also allow universities to ask that students enter payment plans to settle debts, although that won't be a requirement, according to VPM, a Richmond, Virginia, public media outlet. Hashmi warned against "creating the walls and barriers that actually prevent them from moving forward."

VPM has reported extensively on the impacts that student debt and transcript withholding have on students. The practice has come under fire across the country as disproportionately harming low-income and other historically underserved students in recent years, leading lawmakers and federal officials to crack down on the practice.

Virginia wouldn't be the first state to limit or ban the practice. California, Colorado, Illinois, Maine, Minnesota, New York, and Washington have all enacted legislation banning transcript withholding, BestColleges previously reported, meaning roughly 1 in 4 students in the U.S. studies in a state that offers such protections.

In Ohio, higher education institutions are also prohibited from withholding transcripts from a potential employer because a student owes money to the institution, according to the Ohio Department of Higher Education.

Lawmakers in several states in addition to Virginia have also introduced billsans, according to the Student Borrower Protection Center, including Connecticut, Louisiana, Maryland Massachusetts and New Jersey.

"As more states prohibit transcript withholding as a debt collection tactic, they are also looking to the future and asking 'How can we help students with the underlying debt itself?'" Student Borrower Protection Center Executive Director Mike Pierce said in a statement earlier this year. "Now is the time for education and consumer advocates to come together to get this right."

Transcript withholding when students have an outstanding debt is more than a state-level issue, however. This fall, the Consumer Financial Protection Bureau (CFPB) slammed transcript withholding over outstanding debt as "an abusive practice" that violates federal law.

The CFPB, in a previous release, said the practice is meant to "coerce" borrowers into making payments in a previous release.

"Americans must exercise their right to their educational data to obtain a job or transfer schools," CFPB Director Rohit Chopra said in the release. "Our examinations of lenders found that blanket policies to withhold transcripts can run afoul of the law."