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.'"
And the bubble continues... (Score:4, Insightful)
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.
does it surprise you? (Score:1, Insightful)
Extortion? (Score:5, Insightful)
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:And the bubble continues... (Score:5, Insightful)
The state of US education seems to be:
-Expensive
-Ineffectual
and now
-Counter-productive
A triumvirate of failure.
Catch 22 (Score:5, Insightful)
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.
Great Way to Get Alumni to Donate (Score:5, Insightful)
Class Action Lawsuit (Score:5, Insightful)
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.
Re:does it surprise you? (Score:4, Insightful)
you got a 3rd party loan
you paid the college for your classes
the college has no vested interest in holding your transcripts.
Blame on both sides (Score:5, Insightful)
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.
Re:Extortion? (Score:1, Insightful)
My parents paid cash for me (and then I paid them back once I had a job). ~$80,000 really isn't that much money if you learn to SACRIFICE and save you money instead of throwing it away on Comcast cable, Verizon cellservice, and other shit that you really (to be brutally honest) do not need.
And yes a lot of college degrees are worthless. They ask students, "Do you have a job?" and usually they do..... at Walmart. Or maybe a temporary job with the college itself. NOT an actual job in the degree studied.
Everyone's role is clearly defined already. (Score:5, Insightful)
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?
Re:Atrilce doesn't mention... (Score:5, Insightful)
they should have no interest in doing so
They have a very big interest in student loans; without affordable loans the number of students would drop dramatically. Students who don't pay back their loans are costing everyone who does make their payments extra in the form of higher interest rates. Instead of getting a big attitude, try working with the system instead of against it.
Re:Great Way to Get Alumni to Donate (Score:4, Insightful)
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.
Re:Blame on both sides (Score:5, Insightful)
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.
Re:does it surprise you? (Score:5, Insightful)
And what kind of thing would that be? Businesses demanding payment for services rendered? Or gubmint demanding payment of money owed? Try not paying your taxes Mr Teat Partier, and see what happens.
What this needs is a car analogy:
You need insurance for your car, so you buy some from ABC, and put in on your Visa credit card. So far so good.
Then some idiot rear ends your car... so you call your insurance company, and they tell you your claim can't be processed because you missed a payment on your credit card, and they won't honor your insurance until you repay Visa.
See why this is both weird and wrong? Your insurance is paid up, and paid in full. Its none of ABC's business whether or not your account with visa is in good standing. That's between you and Visa.
That's the problem that is happening here. The government (taking Visas place) loaned the student money to purchase an education. The student then used that money to purchase an education from the school (taking the insurance companies place). So the transaction between you and the school is complete, and the school was paid in full for your education.
Its no more more the school's business to collect payment on your student loan than it is the insurance companies business to do collections for Visa.
Re:does it surprise you? (Score:5, Insightful)
Re:does it surprise you? (Score:3, Insightful)
Might even result in lower interest rates for students, since the risk to the lender is lower.
Re:The problem is the people, not the education. (Score:5, Insightful)
Wow 60% huh? I'm guessing because you're shunning ignorance and embracing science, that you simply hit enter before actually providing us with the source for a number. I mean, what kind of a idiot would base such a bold statement on his mere feelings.
Re:Extortion? (Score:5, Insightful)
My parents paid cash for me (and then I paid them back once I had a job). ~$80,000 really isn't that much money if you learn to SACRIFICE and save you money instead of throwing it away on Comcast cable, Verizon cellservice, and other shit that you really (to be brutally honest) do not need.
So, you're saying everyone should just have parents who SACRIFICED their whole life (and had a good job) so kiddo can get a degree interest free?
Interesting. I'm certain your experience is that of the everyman. No doubt.
Naturally, out society should be based on the premise that one's success in life should be based on how much effort your parents put into paying your way up the ladder.
Re:Blame on both sides (Score:4, Insightful)
Re:does it surprise you? (Score:5, Insightful)
If the government REALLY "got in the middle", this wouldn't be a problem in the first place since public colleges and universities would be dirt cheap or even free, as they are in most other OECD countries.
In fact if you look at tuition, aside from Australia, the US government is less-involved in college education than any other developed country in the world.
Re:does it surprise you? (Score:5, Insightful)
As a Canadian, where the government is heavily involved in both providing student loans and subsidizing education, I have to say that you're totally wrong.
I graduated in 2004 with an Electrical Engineering degree. The total I had in student loans was $0. (zero) Co-op paid for most of my expenses. Courses were about $400, six per term, a total of $2400 per semester. (I know, holy shit, right?) Books were the typical ass-rape, but in the non-lubed Canadian version. (A couple of books were $120, lots at $80, I eventually just gave 'em all away.) I was not living with my parents, and rent was about $500 a month.
It's dirty socialism, right? Nope, it's long-term thinking. I pay more in taxes now than I did before I got my degree since I'm earning 2.5x what I got when I started school. I'll be paying 2.5x more taxes (more actually, since we have progressive taxes up here) for the rest of my career.
Re:Not to make light of a bad situation but... (Score:2, Insightful)
Seriously, show me the debtors prisons [wsj.com]..
Re:The problem is the people, not the education. (Score:5, Insightful)
The American education system itself isn't that bad. It's not the best, but it's not the worst, either.
One huge problem is that the schooling (schooling, not education) centers around rote memorization and teaching to the test. How things work, why they work, how to apply them... those kinds of questions are nonexistent in most cases.
Re:This is not the government's fault (Score:3, Insightful)
you really need to think things a few steps further down the road.
I think it's you who need to think more.
Universities are in the business of educating.
How the hell is anyone supposed to be educated in anything, if they can't get any hands on experience?
Washing the dishes in the University food court is just as valuable of an educational experience as sitting in the classroom taking notes. Working in the university printing room is certainly worthwhile. So is maintaining a university email system....etc etc. Outsourcing all this stuff is absolutely the wrong thing for an institution of higher learning to do, if they actually value education.
I put 3 kids through the UNC system no debt (Score:5, Insightful)
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?
Re:This is not the government's fault (Score:0, Insightful)
See, the thing is ... you don't know what you're talking about. As it turns out, maintaining e-mail, groupware, etc., is mind-numbingly tedious and incredibly difficult to do right with a high level on uptime for thousands of folks in dozens of departments. There are pitfalls everywhere. And the one thing you absolutely can't do is let students anywhere near this infrastructure. Seriously, are you nuts? There's so much protected and confidential data all over these systems, that letting any random student near it is asking for a disaster. And are you really advocating letting untrained, inexperienced students (Otudents? Really? Are you even thinking at all?) maintain mission-critical services?
Actions do have consequences. Letting students anywhere near University infrastructure is an incredibly bone-headed and naive mistake just begging for random outages, data loss, and horrifying lawsuits.
Asshat.
Re:does it surprise you? (Score:5, Insightful)
It's the same as the goddamn health care "arguments" from the US right.
"We have too much government involvement! Of course it's expensive! If we get the damn government out the market will fix everything!"
Yeah, maybe, I guess. Or we could do the opposite of what you're saying and get guaranteed results, as proven in reality, not some ideological model.
If this pattern continues, next the poor dumb bastards will start arguing that government-subsidized education infringes on the average american's right to start and run a student loan corporation, or to choose which loan corporation fucks them in the ass.
Re:Not really a problem (Score:5, Insightful)
When education, to escape the McDonalds job's pay...
Step 1: Finish highschool
Step 2: Pick a trade, something fun but challenging.
Step 3: Get ticket, and work for someone for awhile.
Step 4: Quit, use all those contacts you've been building up for the last 6-7 years and start a business of your own.
Step 5: Hire an apprentice or two, then run the business.
Step 6: Enjoy the money.
I still find it funny that the majority of people on /. think that the only way to get good money is to have a university education. Skip it, get a trade.
Comment removed (Score:5, Insightful)
Re:The problem is the people, not the education. (Score:5, Insightful)
Woah... That was an epic Slashdot circle jerk. You managed to bag on all the elitist neckbeard enemies in one post. Hipsters, gangstas, religious fanactics all in one post and blame them for something completely unreleasted you got upvoted to Score:4 Interesting! Congratulations!
Re:The problem is the people, not the education. (Score:5, Insightful)
Re:Blame on both sides (Score:4, Insightful)
If your dreams don't involve a high probability of actually getting paid then maybe you need to think twice about accumulating a crushing debt to reach them. Same advice as for all those kids who want to become rockstars, movie stars, or professional athletes - great, reach for your dream, but take a realistic look at your chances of success and make sure you have a plan B or expect to be in a world of hurt.
Seems to me what we really need to do is start teaching high-school kids how to manage money - perhaps a mandatory Home Ec class that actually has a strong focus on, you know, the *economics* of running a household. How do the costs of cooking versus eating out compare over the course of a year? How does the tax system work? What is the real cost of a loan and how does it vary based on repayment rate? What are the costs and benefits of a college education? Etc,etc,etc. I'd bet that'd benefit most high school students a heck of a lot more than a year of mandatory PhysEd.
Another front in the war on fiscal incompetence: convince parents to stop giving their kids money - I mean how are kids supposed to learn the value of the dollar when you can always get more by asking Mom or Dad? Lets get back to the good old days - you get a fixed weekly allowance in return for doing your chores, scaled to cover your expected expenses plus a bit of spending money. Especially by high school food, clothes, etc. should probably all be included in those expenses so that they get some real practice with opportunity costs in the presence of a non-negligible income stream. If they absolutely *must* have something they can't afford then *loan* them the money with a definite repayment schedule.
Oh, and get off my lawn.
If students can run a nuclear reactor... (Score:5, Insightful)
If students at the University of Utah where I studied Physics can run one of 33 teaching nuclear reactors in the U.S., I'm pretty sure letting them near an email server would probably be OK. http://www.deseretnews.com/article/705368841/University-of-Utah-has-own-nuclear-reactor-tucked-away.html [deseretnews.com]
When I was working on a CS degree, one of the work study jobs a number of people in CS could get was computer operator on the campus computer system, which in fact gave them the keys to the kingdom. Unsurprisingly, the world didn't end as a result, nor were the operators grades ever 4.0 across the board.
-- Terry
Re:The problem is the people, not the education. (Score:5, Insightful)
Golly. That's quite scary. 60% - or more! - of Americans who deliberately reject a useful education? Naturally, you have the statistics and references to back this up, unlike those other fools.
Actually, could you please provide your references for, umm, well, basically everything after the first three sentences?
Re:does it surprise you? (Score:5, Insightful)
What exactly is our $600+ billion military budget protecting us (or other countries) from? No other governments want to attack us because their countries are too busy selling stuff to us. A few terrorists (which will ALWAYS be around, ESPECIALLY when you spend $600 billion annually on new explosives to destroy their communities and take their resources) don't qualify as a threat to an entire country's national security. Even if they did (and there would need to be A LOT of sporadic attacks to argue that), how exactly do gigantic fleets of warships, nuclear submarines, fighter jets, rocket launchers, tanks, and all other sorts of things (which have together ended a grand total of 0 extremist ideologies) "secure" us?
And anyway, it's fairly obvious that I meant "free" in the same way that a pre-college education is free. And substantially cheaper per capita than private alternatives. It's astounding how much public services can provide when they're actually made to service the public instead of a few rich people.
Re:Extortion? (Score:3, Insightful)
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 ya. But who gives a shit about those drug addicts. They could have at least come up with something better than a B movie plot.
Currently, getting a degree looks a bit like a scam, unless, of course, I had somewhere I could stay for free, which is apparently the deal you had.
You aren't nearly as hot shit as you think you are.
Re:does it surprise you? (Score:5, Insightful)
My income tax rate's not far under that, all things considered, and I do all right but I'm far from rich (FICA is a bitch--a regressive-ass bitch). For it, I get poor transportation infrastructure (my state's roads are exceptionally bad, to say nothing of public transit, or rather, the lack of it), no help toward health care (so, like most, my health and my family's is dependent on my employment; there's a nice extra risk to discourage entrepreneurship), and some minimal aid toward education should I want to use it (didn't before, don't expect that I will).
I'd happily pay another 10% or so to gain what people in many (most?) other OECD nations have--I'd be a fool not to, since it's a bargain.
Re:does it surprise you? (Score:4, Insightful)
If Americans wern't so stupidly paranoid about socialism, they could have a govt student loan scheme like we have in Australia where the HECS scheme operates, a small extra percentage is deducted with your tax once you reach a certain wage. Of course that, like decent social health care not going to happen in the backwards US.
Re:Extortion? (Score:5, Insightful)
Loans for college are a demand-side solution. We allow time-shifting of money to increase demand, more money flows to colleges, and in response colleges expand and more colleges get built. At least that's how it's supposed to work in theory. What's actually been happening is that big-name colleges have a monopoly on their name. So instead of increasing supply (hiring more professors and and admitting more students), they've just been ratcheting up their tuitions to match the increased availability of money due to loans. Then they use the higher tuitions as circular reasoning for why we need more loans.
We need a supply-side solution. One that makes college available to more people by increasing supply directly. e.g. Cut off student loans, put the money into public universities instead. Yeah it's not perfect - poor kids won't be able to get into expensive private colleges. But it's a damn sight better than inflating tuition prices for everyone by 200%-300%, and consigning poor students to a decade or more of debt after they graduate. At this point, we need to use the public universities to exert downward pressure on the market price of tuition to fix the damage done by decades of cheap school loans.
Re:does it surprise you? (Score:5, Insightful)
What I've found is that most of the people who whine about high taxes and say that they prefer the American solution fit into one of three categories:
Greedy 'I got mine' Rich Person: They make enough money that the lack of public infrastructure and government support doesn't impact them in a meaningful way and want to hoard as much money as possible, presumably so they can pretend they're Scrooge McDuck and swim in a pile of gold. They don't give a shit about the hoi polloi and despise having to give anything back to the society that enabled their success.
Wannabe Rich Person: They've bought into the lie that all it takes to become super-rich is a bit of hard work and want to be one of the above jack-asses when they get there so they support low taxes and deny the need for government help even though it would benefit them greatly as they are now because they think it'll make things better once they 'make it big'. They don't realize that realistically, you need to be either incredibly lucky or be born into it to get rich enough that lower taxes actually benefit you more than the complete lack of adequate social services that enables such low rates hurts you.
Free Market Drone: Maybe they read a bit too much Ayn Rand. Maybe someone forced them to watch Cold-War era propaganda films for days on end, Clockwork Orange style, perhaps a Marxist molested them as a child. Whatever the reason, this is a true believer. Unlike the other two, this isn't sociopathic self-interest (or the delusion of future such self-interest) but rather a genuine belief that the government is always evil, the market is always right, lower taxes are always better and that completely unfettered markets would lead to anything other than a cyberpunk dystopia.
You have it backwards. (Score:3, Insightful)
without affordable loans the number of students would drop dramatically.
Without student loans, the price of education would drop dramatically.
Inexpensive, readily available student loans have the same effect on the cost of education as inexpensive, readily available home loans did on the cost of property during the housing bubble - they give the purchaser far more purchasing power than they would normally have, resulting in the price of the product being bid up much higher than its value.
We're trapped in a vicious cycle - education is perceived as "too expensive", so we give out loans to students so they can pay for education. Then prospective students, collectively armed with more money to pay for education, then bid up the price of education, making it too expensive.
A good way to look at this is imagine someone is selling a car that you want to buy. The car costs $10,000, an you only have $2,000 but you need it to get to work, so you'll take out a loan to buy the car. Then, the government comes along and decides to give a free $10k loan to whoever buys the car. What happens? Now a whole bunch of other people can buy the car too, so the dealer raises the price to say, $12,000.
So now instead of a $8k loan with market interest, you have to get a $10k loan with discount interest. Didn't make the car any cheaper for you, but the car dealer made an extra $2k off the taxpayer.
Student loans are working the same way - they use taxpayer dollars to inflate the cost of education, raising the costs to both students and the taxpayer.
What's worse is, just like we had no standards on housing loans leading into the housing bubble, we have no standards on student loans either - virtually any student can get a loan, even if the school they are going to go to is a degree mill where graduates see no increases in employement opportunity (as measured by low loan repayment rates), or they are getting a degree where the expected salary can not justify the loan cost. (i.e. tens of thousands of dollars in loan debt for a degree in a career path with $30k top pay.)
We would be far better off if we eliminated student loans entirely, allowing the costs of education to fall and people would once again be able to afford to pay for an education with a job while they are in school, instead of having to pay for their education for 20 years after school.
Re:This is not the government's fault (Score:4, Insightful)
"...the University can reduce its costs by outsourcing email. That in turn increases the amount that the people working for the university can pay themselves."
FTFY
Unless you can show that this actually results in lower student fees, which I doubt.