Colleges Withhold Transcripts From Grads in Loan Default

[xchrom]

http://www.thenation.com/article/167142/colleges-withhold-transcripts-grads-loan-default

More than ten years ago, Pedro Rodriguez, a talented keyboard musician, came from his colonial homeland of Puerto Rico to go to Temple University. From a low-income family, he depended heavily on student loans to finance his four-year undergraduate study. Graduating summa cum laude with a bachelor’s of music, he went on to earn a master’s degree in music from Temple and then was hired for three years to teach there as an adjunct. By the end of college, he was $62,000 in debt but was making payments regularly until Temple laid him off, allegedly because of budget cuts. That’s when his problems began. (Pedro Rodriguez is a pseudonym to protect his identity.)

Unable to find a job as a music teacher in the current economic crisis, he eventually went into default on his loans, which included Stafford, Perkins and private bank loans. Then this year, he decided to go on to earn a PhD, which would make it possible for him to get hired in his field. He applied to a top-rated university in the Northeast, but when it was time to send his school transcripts, Temple froze him out. “They said as long as I was in default on my loans, they would not issue a transcript!” says Rodriguez.

A spokesman from Temple confirms that it is school policy to withhold official transcripts from graduates who are in default on their student loans. As it turns out, the school is not alone; this is the position taken by most colleges and universities, though there is no law requiring such an extortionate position. They do this despite the fact the colleges themselves are not out the money. They have received the students’ tuition payments in full and are in effect simply acting as collection agencies for the federal government.

The US Department of Education says only that it “encourages” colleges to withhold transcripts, a tactic which the department, in a letter to colleges, claims coldly “has resulted in numerous loan repayments.” But particularly in a time when the real unemployment rate is stuck at over 15 percent, or, if long term unemployed who have given up looking for work are included, at 22 percent, it seems not just heartless, but counter-productive for schools to block their own graduates from obtaining a document they need to move on to a higher degree or to get hired in their chosen field.

[Zalatix]

1. The point is to get rid of these people if they aren't rich. Deny them jobs, starve them quietly.

Why is anyone surprised that this would happen?

The rich, meanwhile, don't even need college, except as bragging rights - they've already got their wealth, mostly inherited.

[Yo_Mama]

2. If you need a transcript for work

Obviously it would be counter-productive. The average person would probably say "insane".

But if you need your transcript to pursue further education, if you look at it coldly, then the school is just trying to prevent its bad debt from being diluted.

The issue is why the government is telling the schools to do this?

[hobbit709]

4. Did you read the article?

The school isn't owed the money.
that's like saying if you got an unpaid parking ticket, the store you go to should refuse to serve you until you pay the ticket.

[Yo_Mama]

14. I agree

Obviously the only direct motive from the schools is to go along with the government.

The schools are highly dependent upon student loans for future revenue, though, so they do have a strong indirect interest in making sure that money is paid.

Also now we have the growing movement to scrutinize schools with abnormal amounts of bad student loans, so that may be a factor.

As far as I can see, this is a Dept of Education initiative applied through the schools. The Federal government uses ineligibility for further student aid as a method of collection:
http://www2.ed.gov/offices/OSFAP/DCS/going.back.to.school.html

For the FFEL loans, once they go into default they are normally shoved back to a state guaranty fund which pays out the money and then gets the defaulted loan in return.
http://www2.ed.gov/offices/OSFAP/DCS/repaying.guaranty.agency.html

This is the one in Illinois as an example:
http://www2.ed.gov/offices/OSFAP/DCS/repaying.guaranty.agency.html

Part of ACA was to switch all such loan programs directly to the feds, so now DOE is funding them. The "profit" from the loans in repayment is supposed to fund new loans.

This is still ISAC as an example of how these loans were securitized and sold:
http://www.collegeillinois.org/dotAsset/65d90f16-5ee8-4bc4-8610-7d7da0661e52.pdf

That's the December report. Obviously somebody has an interest in getting that money. With only 60% of those loans in current repayment status, is it surprising that collection efforts are getting a big thuggish?

[hobbit709]

3. So you need to get a copy of your transcript as soon as you graduate and keep it handy.

More paperwork hassle to keep up with.

[obamanut2012]

7. You usually need aan original sent sent from the school

To your future employer or school.

[aikoaiko]

8. Yes, I recommend getting 5-10 in sealed evelopes.

Bust one open and scan it. Many job applications will accept copies/scans for the application process but will require official transcripts at point of hire.

Other schools (for advanced edu) often require official transcripts in the application.

I don't like that DOE is doing this.

[snooper2]

5. He went 62K in debt to become a music teacher?

Wow

[Fumesucker]

6. Yeah, what the world *really* needs is more MBAs.. n/t

[snooper2]

9. You pulled that out of left field, but why so much?

Aren't there 2 year associate degrees for becoming a music teacher?

WTH, it's not like you have to learn about naked singularities LOL

[prairierose]

10. In the few school systems that still have music programs....

most will require a certified teacher which is a 4 year degree with a specialized course of education courses. Most people with a 4 year music degree but without the ed courses would not be able to get a job teaching music.

OTOH, if the anti-education forces and the billionaire boy's club get their way, no one will need a degree to teach soon. And if you believe the anti-teacher forces, that is just right because all the problems in our schools are caused by teachers.

[snooper2]

11. That just seems stupid, if you are educated in musical arts, that's what you teach..

We need to go back to being able to get a good job with an associate degree

Two years of training in your field- you get a job---

You don't need math/science/english/biology in college, just learn a skill, a trade, and use it for a career

[sudopod]

15. "You don't need math/science/english/biology in college, just learn a skill, a trade,"

That's not college...that's not even trade school.
O_o

[Romulox]

12. This happened to me quite a few years ago, and it was the same. No debt repayment, no transcript. nt

[aint_no_life_nowhere]

13. I'd like to see a national movement where everyone defaults on their student loans

Force the government and the schools to do something about it. Other than the atrocity that is our dysfunctional, non-existent health care system, I can't think of too many things worse than what we're doing to young people by saddling them with crippling debt for much of their lives. College needs to be FREE, the way it is in much of the civilized world. Everyone benefits from an educated citizenry.

[JPZenger]

16. Perkins Loans ARE Owed to the University

The article says that some of the debt involved Perkins Loans. Perkins Loans are distributed in limited amounts to each college. They are required to be loaned to students with high financial need - they are more targeted to lower income persons than Stafford loans.

If the Perkins loans are not repaid, the college has less money to loan to other students in need. They should do everything they can to collect.

I agree there is a difference between a transcript someone needs to get a job so they can pay off debt, vs. a transcript so they can become one of a million people with a PhD without any job prospects that needs it. He'd be better off with another masters than a PhD.

[MadrasT]

17. The student (Rodriguez) outlined in this article is really naive

There is no pot of gold at the end of the rainbow if he arrives with a PhD in Music. The job market for music PhDs is virtually nonexistent.

He's just going to accumulate more debt, and be just as unemployable when he's done.

The student loan situation is out of control and needs to collapse, but this guy does not have a good game plan here.

In general, one gets an advanced degree in music if one has the luxury of time and money and space in their life to allow that. One does not get an advanced degree in music as a steppingstone to a high paying career.

It is what it is.

The Big Lie About The Life Of The Mind

I come from a family of PhDs and have more than a few close friends who are teachers holding Masters Degrees and PhDs in music. It is brutal out there and it's getting worse.