Consumer Financial Protection Bureau Finds “Transcript Trap” Abusive
The Consumer Financial Protection Bureau’s (CFPB) “Student Loan Servicing Special Edition” has an interesting section this year for those interested in the topic of transcript withholding. The report finds that some institutions do not release official transcripts to consumers with unpaid debts to the school. "Examiners found that institutions engaged in abusive acts or practices by withholding official transcripts as a blanket policy in conjunction with the extension of credit," the report finds. The report goes on to explain that a practice is defined as abusive when it takes advantage of a consumer who cannot protect his or her own interests. Since students often need their transcripts to pursue employment, withholding those transcripts is a disproportionate response. Moreover, the report points out, institutions of higher education do not receive any value themselves by withholding a transcript. In other words, it's purely punitive. The CFPB's article has therefore, "directed institutional lenders to cease this practice." Bravo!
Our affiliate, ERN CT, made some similar arguments this legislative session, as it pushed for a ban on what it termed the “Transcript Trap.” That bill, S.B. 17, was introduced in the Joint Committee on Higher Education and Employment Advancement, which held a public hearing on the matter before voting favorably and passing it to the Senate. While it didn’t cross the finish line in Connecticut this year, New York signed legislation in May prohibiting the predatory practice in both public and private universities.
"Supervisory Highlights Student Loan Servicing Special Edition" (Consumer Financial Protection Bureau - September 2022)
ERN CT on the “Transcript Trap” (1-Pager | Legislative Testimony)
An Act Prohibiting an Institution of Higher Education from Withhold Transcripts (SB 17, 2022)
"New York bans colleges from withholding transcripts over student debt" (New York Post - May)
Meriden Math Efforts Make National Headlines
A New York Times story this weekend featured a Meriden school, Benjamin Franklin Elementary, on its way to overhauling teaching practices. This effort began before the pandemic, starting with math. The school substantially lengthened the amount of math instruction each day, adding daily math tutoring for students who are behind, shifting away from teachers writing on white boards, and instead moving towards problem-solving in small groups. Some teachers felt the more prescriptive rules took the fun out of teaching, and they missed their autonomy. According to a researcher at the University of Denver, some of the resistance also "comes down to tradition. 'You just teach the way you were taught.'" Nevertheless, since 2019, just as test scores have fallen nationally, Benjamin Franklin Elementary has seen a small improvement on the state's math assessment. An inspiring read.
The Rush to Implement Student Loan Forgiveness
The Biden Administration formally launched a website with an application for student loan forgiveness this week, following a successful beta test over the weekend that received over 8 million applications. The Education Department directly holds $1.6 trillion in federal student loan debt and says it will forgive up to $20,000 of it for each eligible borrower who was also a recipient of Pell Grants. Those making less than $125,000 a year could get up to $10,000 of their federally held student debts relieved.
Last month, NBC CT published a story indicating that Connecticut student loan borrowers owe a combined $17.5B. Over 450,000 Connecticut borrowers are eligible for the Biden administration's forgiveness plan. The online form is simple and takes about 5 minutes to complete.
The New York Times' coverage adds that the effort is already being challenged in court by a group of Republican state attorneys general. And according to CBS News, unless an injunction impedes the Education Department’s plans, it will begin forgiving student loans “ahead of January 2023, when student loan repayment is expected to resume.”
"The Education Department said it was “beta testing” a form that it intends to use to eliminate millions of federal student loans." (NY Times)
"Here's How Many People in CT Can Have Federal Student Loan Debt Forgiven" (NBC CT - Sept.)
Official Form: "Apply for Federal Student Loan Debt Relief" (US Department of Education)
"Student loan forgiveness application is now open: How to apply" (CBS)