Why Are Colleges Holding Transcripts Hostage for Student Borrowers?

We sat down with Glenn D. Feagan, Esq. and Brian Herberth, Esq., attorneys from the Law Offices of Glenn D. Feagan, PSC, who are leading a class-action suit regarding student debt from their offices in Ohio.

Q: Colleges and universities are withholding transcripts from students with outstanding debt? Is this really happening? 

Unfortunately yes, almost every college and university will deny a student or former student’s request for transcripts when a student or former student falls behind on student loan(s).

Q: How widespread is this problem? How many recent graduates is this really impacting, and what is it limiting them from applying to? 

If a recent graduate is delinquent or in default on his/her student loan debt, they are at great risk for having their transcripts withheld. Research demonstrates that the problem is almost universal. In 1999, the U.S. Department of Education released a letter to colleges encouraging the institutions to implement this tactic to reduce nonpayment on loans. As the economic climate in the United States worsened, the rate of nonpayment increased. Now students who cannot obtain employment are requesting their official transcripts for jobs and/or to further their education in a graduate program.  

In 2010, the Federal Reserve Bank of Richmond when discussing student loan debt observed that: “For borrowers who fall into delinquency, their lenders can exact several harsh penalties. In addition to harmed credit scores and higher payments, further financial aid is denied, academic transcripts may be withheld, tax refunds may be withheld to repay the student loan, and federal payments like Social Security may be reduced. The longer a borrower remains delinquent, the less likely he or she will be to resume control of the debt."

The trade organization, Council on Law in Higher Education, holds seminars that specifically encourage institutions to withhold transcripts to collect student debt.

Q: Is there any evidence that withholding transcripts will result in more expeditious payment of student loans? If the graduates could afford to remit payments on time wouldn't they just do so? 

In any kidnapping where ransom is involved, people with resources will succumb to the coercion and pay the ransom. Unfortunately, the economy has caused many graduates to lack the resources to pay the ransom. Knowing that coercion can be effective, the United States Department of Education wrote in a letter to colleges and represented that “the withholding of academic transcripts is solely an institutional decision, but has resulted in numerous loan repayments.”

Q: Who is responsible for this and what do they have to say? There must be a good reason to withhold some transcripts right? 

There is no federal mandate, federal statute, or state law compelling colleges and universities to withhold a students’ official transcript. The only reason for this strategy is to strong-arm students to pay on outstanding loans. Apparently, the Federal Government incentivizes colleges and universities to withhold transcripts as part of the federal student loan program.

Q: Are there organizations or efforts to release the transcripts for those who need them or to do away with this altogether? 

Former United States Representative Hansen Clarke of Michigan introduced a student loan forgiveness bill that, if passed, would declare that if a student makes loan payments of 10 percent of discretionary income each year for ten years, all remaining debt would be canceled.  

Graduates facing this problem should consider their legal rights. In certain circumstances, graduates may possess a constitutional property interest in their transcript that supersedes the interest that the college or university has in withholding the transcript. After all, the student was the one who completed all of the necessary requirements to obtain his or her degree and frequently owes student debt to someone other than the college or university.

If you have experienced the withholding of your official transcript from your alma mater or would like to learn more about this policy you can visit