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Education The Almighty Buck News

Universities Hold Transcripts Hostage Over Loans 541

Hugh Pickens writes "Dave Lindorff writes in the LA Times that growing numbers of students are discovering their old school is actively blocking them from getting a job or going on to a higher degree by refusing to issue an official transcript. The schools won't send the transcripts to potential employers or graduate admissions office if students are in default on student loans, or in many cases, even if they just fall one or two months behind. It's no accident that they're doing this. It turns out the federal government 'encourages' them to use this draconian tactic, saying that the policy 'has resulted in numerous loan repayments.' It is a strange position for colleges to take, writes Lindorff, since the schools themselves are not owed any money — student loan funds come from private banks or the federal government, and in the case of so-called Stafford loans, schools are not on the hook in any way. They are simply acting as collection agencies, and in fact may get paid for their efforts at collection. 'It's worse than indentured servitude,' says NYU Professor Andrew Ross, who helped organize the Occupy Student Debt movement last fall. 'With indentured servitude, you had to pay in order to work, but then at least you got to work. When universities withhold these transcripts, students who have been indentured by loans are being denied even the ability to work or to finish their education so they can repay their indenture.'"
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Universities Hold Transcripts Hostage Over Loans

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  • by Anonymous Coward on Monday May 07, 2012 @05:09PM (#39920763)

    And the bubble continues to press against the thumbtack.

    I have a feeling this collapse is going to be bigger than anything we've seen yet. Dot Coms or Real Estate be damned.

    • by Anonymous Coward on Monday May 07, 2012 @05:13PM (#39920827)

      The state of US education seems to be:
      -Expensive
      -Ineffectual
      and now
      -Counter-productive

      A triumvirate of failure.

  • by Anonymous Coward on Monday May 07, 2012 @05:12PM (#39920807)

    I was incredibly fortunate to be able to call my department head and speak with him, he personally corresponded with the background check agency and it was finally accepted that I wasn't lying, however, they said that I couldn't list the degree on my resume. This was in 2005 by the way.

  • ...what happens if a student contacts the lender and informs them of the problem. I know people who have done this, lenders understand and generally work with you if you explain the situation. Not so much if you just stop making payments.
    • by JonahsDad ( 1332091 ) on Monday May 07, 2012 @05:59PM (#39921439)
      That was my exact situation, in 1997. Unemployment had caused me to fall behind on the student loan. Needed a transcript for the new job. Called them. Funny enough "let me have a transcript so I can get the job that will result in you getting paid back" seemed reasonable to them too.
  • Extortion? (Score:5, Insightful)

    by ranton ( 36917 ) on Monday May 07, 2012 @05:12PM (#39920819)

    Considering almost no one pays for college without loans today, any college whose students could not get loans would be dead in the water. That gives a lot of leverage for banks to "ask" colleges to play along.

    Then there is the unspoken truth that most of these degrees are worthless. If banks ever released official statistics on what degrees from which colleges resulted in the most defaults, it would hurt a lot of programs. (and immensely help out prospective students, but who cares about that?)

    • Re:Extortion? (Score:5, Interesting)

      by AlphaWolf_HK ( 692722 ) on Monday May 07, 2012 @08:51PM (#39923047)

      Considering almost no one pays for college without loans today, any college whose students could not get loans would be dead in the water. That gives a lot of leverage for banks to "ask" colleges to play along.

      The idea that people can't go to school without loans is complete bullshit. I am going to graduate next year, and I paid for my entire education out of my own picket. I've never had a job that paid more than $10 an hour. I served in the military for one year (discharged due to problems with eyesight) so I only had a few months worth of GI bill, which didn't pay much at all. Beyond that, I paid for everything myself. Books, tuition, transportation, everything. I paid for it. Not my parents, not my relatives. All me.

      And this isn't hard to do either, all you have to do is save up money and not spend it on stupid shit, e.g. your new ipad every time apple releases one, and your regular visits to starbucks (people don't need $4 cups of coffee twice a day to survive.) I've probably spent about $25,000 on college so far, and I still have about $14,000 saved up. I really don't understand how some people can spend $80,000 on college to get something as worthless as a liberal arts degree, and then wonder why they can't get a job. To me, getting a degree that there is no market for is stupid, you may as well just save the money and get no degree at all. Taking out a student loan is even more stupid.

      One big mistake I notice a lot, is that a lot of people seem to go straight to university. This is the dumb, because universities are always overpriced for what you get. Community colleges (especially in places like California) are DIRT CHEAP. I pay upwards of $2,000 per year, that includes summer school, and includes books. Imagine that, a month and a half of pay for an entire year. Plus, community colleges by far tend to have a much better student to teacher ratio (which means if you have a learning disability like I do, your chances of succeeding are much greater,) the learning environment is also therefore more personal so the teachers tend to care more about the students than their status, and in addition to that they tend to offer free tutoring, and it's very good tutoring too.

      Another thing is books. I don't know why, but so many students buy their books from the in school book store. This is stupid, they charge a lot more than Amazon, and better yet if you look on ebay, you can buy the international editions which are essentially the same thing, only they are made of cheaper paper, but cost a hell of a lot less.

      Also if you don't dedicate yourself to college properly, you won't get shit. And dedication is all it takes. I don't consider myself to be that smart, yet I have a 3.9 GPA. People who say you have to be smart to do that don't know what they're talking about. When I was in high school I was just like the average person I see in college: I didn't give a shit and just did the minimum I needed to get D's because that's all that was required to pass. In college you're required to get C's to pass, so that's the grade I see the most people get. TV gives this impression that college is the time to smoke weed and drink beer at dorm parties, and I'm telling you right now that it's not. College is when you're supposed to work the hardest.

      My dedication has paid off already by the way. I just got hired for an internship at a fortune 500 company that pays a lot more money than I've ever earned (think: how often do internships pay anything at all?) I didn't even need to interview, they just asked for my resume and then hired me because of the reputation I've earned at school.

      I don't want to hear any crying from people who can't pay off their student loans, that's their own problem that they created from their own stupidity, and they better damn sure fulfill their obligations. The occupy movement sits around doing nothing while demanding jobs, meanwhile I've been working my ass off to earn a job. The occupy movement can eat my ass, I am not part of their 99%.

      • Re: (Score:3, Insightful)

        by Velex ( 120469 )

        So, do pray tell, how much did you pay for rent, electricity, and heat while doing that?

        Or, don't tell me, you're yet another one of those special little snowflakes who can just stay at mommy and daddy's place until everything is perfect.

        Get off your high horse you idiot.

        On the other hand, I own a home and I've never had a degree. I even had loans to pay off after my ex-parents decided I was actually a demon who had killed their son and taken his form. Pain killers and prednisone and alcohol: it's bad for

        • Interesting you bring up my parents. Both of them actually have no income. My dad was a mechanic for 30+ years and finally wore out his back (he has a family history of back problems, which made it worse) and he can no longer work. He's trying to start a used car sales business, and I've actually loaned him $8k for that. My mom had a work injury back in December and fractured one of her vertebra. Her workman's comp has been thus far denied, so she has no income. In spite of my dad maxing out his contributio

      • by vlm ( 69642 )

        My local wisconsin tech school where I got my 2-year 20 years ago charged about $1300 for 12 credits, today its only $1400 but with almost uncountable bogus extra fees ('technology" "activity" and the latest, I kid you not, is mandatory liability insurance) its $1600. If you attend 2 semesters a year, that's $60/week out of your takehome pay. My takehome pay was about $200/week (about $7/hr full time, I got almost all the rest back in the income tax return). That would have only left me $560/month to pay

  • Catch 22 (Score:5, Insightful)

    by Anonymous Coward on Monday May 07, 2012 @05:13PM (#39920831)

    You can't work until you start paying us back and you can't pay us back until you start work.
    Seems a bizzare way of organising things. In the UK you can't pay back your student loans until you earn a certain minimum wage and then it starts to come out from your pay like a tax as a percentage of your wage. And like the summary says it is the government who hold the debt, not the individual Universities/colleges. If they really want to stop the problem of defaulting then surely it would make more sense to reduce the number of degress that didn't have much job prospects, rather then block the people with degrees from getting jobs.

    • Re:Catch 22 (Score:4, Informative)

      by locopuyo ( 1433631 ) on Monday May 07, 2012 @06:01PM (#39921469) Homepage
      In the USA not all student loans are through the government. Some of mine were, and some of mine weren't. The ones that were I didn't have to start paying until I got a job or after a certain time period. When I became unemployed I could put them on hold without paying interest until I became employed again.
    • I agree it's a crappy thing for the government to pressure schools to do, but it's not at all like the analogy the NYU prof has put forth. It's more like buying a lawnmower for your landscaping business on a loan, then not repaying the loan. Just because the bank repossesses the lawnmower does not mean they're depriving you of your ability to get work. It just means you cannot use the lawnmower to help you find landscaping work, at least until you start making the loan payments.

      The students are not un
  • by Githaron ( 2462596 ) on Monday May 07, 2012 @05:18PM (#39920871)
    This seems like a great way to get alumni to donate when they eventually do start making good money. The affected alumni are not going to harbor any resentment at all.
    • by Anonymous Coward on Monday May 07, 2012 @05:41PM (#39921163)

      My university's colors are green and gold. It helped make it clear that my relationship with the university was strictly a business transaction -- I gave them money and passed the classes, they gave me the degree. There is no further relationship, and they get no further money from me. Ever.

  • Awesome (Score:5, Funny)

    by ZombieBraintrust ( 1685608 ) on Monday May 07, 2012 @05:24PM (#39920925)
    Now I can convince employers I have a degree law from Harvard. I am just behind in my loans.
  • by cpu6502 ( 1960974 ) on Monday May 07, 2012 @05:24PM (#39920935)

    If I was a lawyer I'd look at this as a Great opportunity to file a class-action lawsuit. As the summary states the colleges are not owed any money, therefore they hve Zero grounds to hold hostage the record of the students 4-5 years. They are committing a crime (charged money but did not provide the final document promised in the contract).

    Go for it Mr. Lawyer.
    Rape the bastard colleges.

  • by Missing.Matter ( 1845576 ) on Monday May 07, 2012 @05:29PM (#39920997)
    From the article, empthasis mine:

    She concedes it's a difficult issue but says that "it's the only tool we have to make them pay."

    A music major ... was making payments on his $62,000 student debt after graduation while working as an adjunct professor for Temple.

    So we have institutions lending $62,000 to majors that have terrible job prospects, then when they can't get jobs they don't know how to get the money back... okay. How about don't lend that much money to someone who you can be pretty sure won't pay the money back? I know higher education should be accessible to all and this and that, but perhaps 62 grand for a degree in music should give us pause to reconsider a) why does a degree in music cost 62 grand and b) why does someone want to spend 62 grand for a degree in music.

    I can partiall answer b). I was at a advisory board meeting for my university's CSE department recently, and some undergrads were asked the question: "So what is tuition now?" No one could answer. They don't even KNOW that they are paying $40k+ a year in tuition. This is because they don't even look at their bill. They fill out the fafsa, press a button, sign some papers, and get free money that gives another year of partying. The reality only hits them AFTER they graduate and look back at their full bill. This attitude on the student's side has got to stop

    There's also the attitude on the institution side, that they can loan someone $60k for a degree in basket weaving and reasonably expect to get it back. This has to stop as well, but I don't know how to fix it.

    • by SilverJets ( 131916 ) on Monday May 07, 2012 @05:42PM (#39921171) Homepage

      This has to stop as well, but I don't know how to fix it.

      Simple. Well maybe not simple but the solution is to have companies stop requiring a bachelor's degree as a minimum requirement for every single job out there. This has watered down what university used to be. No longer is it a place of higher learning, higher thinking, and higher reasoning. Instead it has become a mill churning out tomorrow's workforce.

    • by billius ( 1188143 ) on Monday May 07, 2012 @05:48PM (#39921255)
      It's things like this that make me hate the entire crooked system. The federal gov't wants more people to go to college, so they tell the financial institutions "Hey, lend these people all the money you want, we'll make sure they pay it back even if they declare bankruptcy." Meanwhile, the state gov't, elected on a platform of lowering taxes while providing all the same services (the essential contradiction of basically all elected governments), decides to slash education spending. The universities scramble to cut costs but immediate stop when they figure out that the banks are perfectly happy to lend $100,000 to 18 year-olds with no credit history and instead jack up their tuition. At the end of this wretched cycle, you've completely transferred all of the burden to people who took out loans because they couldn't pay for college in the first place and all the kids with rich parents can't seem to figure out what all the fuss is about. Even the kids who get scholarships are screwed because they generally don't scale to handle increasing tuition rates. My freshman year of college, my scholarship paid for an entire year's worth of tuition. By the end of my senior year, it covered less than one semester.
  • by Pirate_Pettit ( 1531797 ) on Monday May 07, 2012 @05:35PM (#39921073)
    Who is muddying these waters?

    The schools have been paid, have they not? That's the whole point of a loan - lender pays now, and you pay the lender.

    And, as others have said, it's a little short-sighted to stand in the way of those in debt, since the best way for them to pay off those loans is to be successful. Again, that's the whole point.

    Any institution engaging in this sort of behavior is way out of line. In fact, it's rather rare to see such a clear-cut case of wrongdoing when it comes to financial/political entanglements.

    Back off, universities. You are not moral guardians, gatekeepers, or creditors. You are educational institutions, and your obligation is to the students, not to whatever twisted group of people suggested you monitor you alumni for credit score violations.
    A declining credit score is already one hell of a millstone - like weight gain, it's much easier to damage your score than improve it. The last thing we need is universities undercutting those students who need their credentials the most - those who essentially gambled a portion of future success on the hopes of a beneficial education. Do they want us to pay our loans off or not?
  • Defaulting is Hard (Score:5, Informative)

    by Anonymous Coward on Monday May 07, 2012 @05:43PM (#39921199)

    They will give you an enormous amount of patience and latitude. All you have to do is call and tell them that you can't pay them. They will ask you a few questions, then take your word in regards to your income, employment status, and expenses without asking for so much a a shred of proof, and most likely grant you a deferment of forbearance.

    When I couldn't find a job about 5 years ago, at first I got by on deferment for about 6 months, after which a had to bite the bullet and take a job way beneath my education level. When I called to tell them that I was now able to pay about 50% of my payment every month, they offered to keep the deferment in place so my partial payments would go entirely to principal. Yes, that's correct - they had even stopped the interest for the entire deferment period. They stopped time itself to help me. Once I had gotten on my feet I started full repayment. When I lost that job before I'd had a chance to save and build an unemployment hedge, they did it for me again.

    They withhold transcripts in cases where students have dodged them, avoided them, and failed to acknowledge the debt.

  • by gelfling ( 6534 ) on Monday May 07, 2012 @06:07PM (#39921549) Homepage Journal

    I put all three kids though the UNC system, Chapel-Hill, NC State and Greensboro + grad school with no debt to me or to them. Maybe NYU and the Ivies and Columbia and all the rest need to re examine the efficacy of charging ridiculous sums of money especially in this economy. And increasing rates at 2x the rate of inflation year over year over year every year for the last 30 years. Maybe students need to re examine the efficacy of getting an MFA in post modern Marxist-Anarchist-Lesbian critical literary theory when literally the only job they can get is teaching that to the next crop of like minded students. Maybe parents need to stop enabling their kids to do whatever they like wherever they like for whatever it costs when it doesn't cost the students anything or they've convinced themselves that going a hundred thousand dollars in the hole is no big thing because they're a special snowflake and somebody somewhere will swoop in to bail them out. I got news for you. Anyone who MARRIES someone with huge student debt is an enormous idiot. So all the snowflakes should all work that crap out before they move on to the next phase of their lives, which no doubt will be moving in with their parents for Adolescence II, The New Beginning.

    I have zero sympathy for anyone involved in this, just like the janitors who took out liar loans on half million dollar houses and now cry to Mother Government to bail them out because the banks went broke selling smoke and bullshit to EACH OTHER. Jesus Christ in a shopping cart does ANYONE bother with due diligence anymore?

    • by sociocapitalist ( 2471722 ) on Tuesday May 08, 2012 @03:24AM (#39925067)

      Nice that you paid for your kids. Would that every parent could do so, would that every child could count on it.

      Your vision is very narrow and takes into account only people in similar circumstances as yourself.

      I haven't lived with my parents since I was eight years old as they weren't able, in many ways including financially, to take care of me. I certainly could not count on them to pay my Uni tuition for me.

      I, like others who don't have parents who can pay for them, took on a heavy load of student debt in order to get an education and increase my prospects for putting myself in a position where I could pay for my children's education at some point in the future because you know what? If I wanted an education I had no other choice.

      Your lack of 'sympathy' for people who don't have parents to pay for their education is unfortunate. If enough people think like you then anyone who isn't so fortunate as your children will continue to be completely fucked.

      Your similar lack of sympathy for poor people who got sold a bill of goods by financial institutions to follow 'the American dream' and lost what little they had, not to mention all the folks who HAD good jobs and lost them due to the failing economy and could thus no longer afford to make their normally reasonable mortgage payments, losing their homes and looking to their government to support them is similarly unfortunate. I can only hope that you have the chance to experience similar misfortune at some point in your life so that you can gain some perspective.

  • by gatkinso ( 15975 ) on Monday May 07, 2012 @06:49PM (#39921997)

    Get an unofficial copy of your transcript immediately after graduation.

    Won't work for every job, or for follow on degree admissions... but it will satisfy some employers.... at which point you can start paying your loan off if hired.

  • by tehcyder ( 746570 ) on Tuesday May 08, 2012 @06:14AM (#39925739) Journal
    Can I ask exactly what a transcript is and what it's used for?

    In the UK, we get certificates showing our final exam/degree grades, and that's it. I assume a transcript is a detailed record of everything you do somewhere?

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