A bill to ban transcript withholding stalled this GA session, but lawmakers aren’t giving up hope
Over the past year, VPM News has been looking into a hidden type of debt affecting thousands of Virginia college students. It’s not federal student loans, which dominates most of the headlines. It’s money owed directly to institutions, called direct-to-school debt.
In our series Dreams Deferred, we’ve been exploring how this is creating hardships for students, making it difficult for them to complete their degrees and advance their careers. To start this series from the beginning, click here.
It was Mario Wright’s senior year at Old Dominion University. While studying for midterms in fall 2013, he realized he needed to buckle down and purchase the books for his classes.
So he went to the financial aid office, expecting to pick up a refund check to help cover the cost of his books, something he’d done without issue before.
“I used those refund checks to purchase books and sometimes even food,” Wright said.
But this visit to the financial aid office was different. Not only was he told he wouldn’t be getting the money he needed for his books, but he was also told he now had a balance due of about $4,400 on his account. Until he paid it in full, he was told he wasn’t supposed to go back to class.
“I'm coming here to ask for help to actually get a book so I don't have to google certain things. I'm trying to be the adult, to do what I'm supposed to do. And then you get this news that you're not supposed to be in class,” Wright said. “So it's heartbreaking. It's, so what do I do now?”
Wright was told there was an issue with his financial aid paperwork, although he says he never got clarity about what exactly the issue was. Whatever it was, no one from the university caught it until it was too late.
All Wright knows for sure is how it impacted him. He stopped going to his classes because he was told to and ended up failing them as a result. Panic and depression set in, and he found himself visiting the beach to clear his thoughts more frequently, even at odd hours of the night.
“I went into a shell, I really did. I was not sleeping,” Wright said. “I'm thinking I’m never gonna graduate. I don't have that money. How can I save this money when I work at a warehouse?”
Money was tight at the time. He was making less than $10 an hour working full time as a supervisor at a furniture company in Hampton, where he’d been working all through his time at ODU. His mom tried to take out a personal loan to help him pay off the balance, but the loan wasn’t approved.
“Growing up how I grew up, you didn't have a lot of friends or family that had extra money just to spare,” Wright said. “So it was: do I set my pride aside and tell someone what's going on and ask for help? Or do I try to do this all on my own? And so I tried to do it all on my own.”
Wright watched from the sidelines as his friends from grade school graduated. He didn’t.
He’d received numerous academic accolades before college – including being named spelling bee champion in second grade, enrolled in gifted education classes in middle school and regularly on the honor roll – so his family expected him to succeed.
“The expectation is that you'll graduate, and then you'll go off and get a great job, and your little cousins are looking up to you, your little sister's looking up to you. So it is really, how do you tell those folks… that I possibly failed?”
When he was told he could no longer attend classes, Wright didn’t think he could challenge the university staff member.
“So it is that overall feeling that this is a powerful institution, I'm a little person, I can't fight them,” Wright said. “I didn't know if I could fight them.”
ODU routinely sends past-due student accounts to the third-party collection agency Todd, Bremer & Lawson, Inc., where Wright’s account was eventually sent.
An abrupt letter from the collections agency to Wright reads: “Apparently you have chosen to ignore our previous request for payment of this claim. We are now recommending an investigation into your employment, bank accounts, automobile and any real or personal property you may own. If an investigation indicates that you are financially able to pay this obligation, we will give this information to your creditor and proceed with collection activity. If you wish to avoid this, send the balance in full to this office immediately.”
Wright’s initial balance due to ODU was $4,410, but he was charged an extra $1,157.62 in collection fees as well as $220.50 in late fees. According to the school’s website, students like Wright don’t even have the option to set up a payment plan directly with the school despite 2018 legislation that allowed universities more flexibility to work with students.
Wright says he didn’t think about requesting a copy of his transcript to take to another school because he didn’t know that was an option. And it likely wasn’t.
ODU, like all public four-year colleges in Virginia, places a financial hold on student accounts when there’s a past due balance. The hold often prevents students from obtaining a transcript or enrolling in more classes until the debt is paid in full.
State Sen. Ghazala Hashmi (D-Chesterfield) and Del. Betsy Carr (D-Richmond) introduced legislation this year that would have banned that practice in the state. Both proposals were left in the House, though a study on the issue may be ordered.
ODU shared data about the total number of accounts turned over to Todd, Bremer & Lawson, Inc. between 2017 and 2021 in response to the legislative proposal, though ODU does not track the number of students who requested and were denied a transcript because of debt.
“It [the legislation] does carry with it potentially a significant fiscal impact to institutions just looking at two of them right now,” House Appropriations fiscal analyst Tony Maggio told lawmakers last month. “Old Dominion, for example, averages about $10 million annually in unpaid collections. And they average about 5,000 in annual referrals.”
During that same meeting, Maggio also presented data from George Mason University about the total number of financial holds, not requests for transcripts. George Mason – like Old Dominion University and several other schools – does not track transcript requests and denials.
A GMU spokesperson told VPM News in an email they’d have to modify their IT system to track the information because “transcript requests are made via a third party service provider. If a student has a financial hold that prevents him/her from requesting a transcript, the student is provided a message indicating this on the third party service provider side.”
Advocates supporting the legislation have questioned why universities shared info on total collections when the proposal only bars withholding transcripts.
“They [colleges] have been telling people that we have to come up with data to show why this [ending transcript withholding] should be done. But I think it's the reverse,” said Jay Speer, executive director of the Virginia Poverty Law Center. “They [colleges] need to show why they're doing this to people, why they're doing this to their former students and keeping them from getting jobs and getting on with their education. And what data do they have to prove that withholding a student's transcript is actually getting them paid? Because I don't think it is.”
When asked why ODU shared overall collections data, a university spokesperson wrote in an email statement to VPM News: “the University routinely shares overarching data trends and financial impact information with various state entities” while insisting that the university “does not comment on pending legislation.”
Speer isn’t convinced.
“I think the universities definitely worked behind the scenes to make sure this legislation didn't pass,” he said.
Emails obtained by VPM News through public records requests show at least a handful of schools were actively resisting the legislation, though they told VPM last month that they don’t comment on legislative proposals. (University liaisons have testified in support of other legislative proposals such as Gov. Glenn Youngkin’s lab school proposal.)
In one email, GMU’s executive director for accounting operations and student accounts, Clare Laskofski, wrote: “It’s not a small number [the potential fiscal impact]. I believe Virginia 21 may be suggesting it is small based on the recent SCHEV data request where institutions were asked to provide data on the number of transcript requests that were denied over a 5 year period. For those institutions that were able to gather this data (Mason doesn’t keep record on transcript request denials), it wasn’t large volume or amounts. However, I don’t believe this data is reflective of the effectiveness of a hold in prompting a past due payment from a student.”
Lawmakers were not presented with data from other schools that are currently tracking transcript request denials, which was already collected by the State Council of Higher Education for Virginia. SCHEV requested and received this data from universities as part of a Congressional inquiry last October.
Another email from Lisa Ghidotti, executive director of government relations for Radford University, to Carr’s office states that “continuing to provide services to students who have not satisfied their balance encourages students to leave a delinquent balance and allows them to continue to another academic institution in which the same outcome could arise.”
Ultimately, Hashmi says she thinks schools are willing to talk about ways to better support students. Before reintroducing her transcript withholding bill next year, she plans to convene a workgroup to dive into student debt issues.
“Being able to bridge those areas of concern from the financial side of the institution, and yet giving opportunity and access to the students…that's the bridge we need to be able to find,” Hashmi said.
“Because it’s not just the debt we’re looking at. We're looking at loss of educational opportunities, a loss of a credentialed individual who can then become a contributing member in a career field. And those are other areas of losses that we need to be thinking about, rather than simply just focusing on the dollars that a student might owe to an institution.”
For Mario Wright, a balance of $5,788.12 – including over $1,000 in collection fees – derailed his graduation from Old Dominion University for two years. He was only able to reenroll because a roommate’s family stepped in and paid off his balance.
“Now I'm that example that my little sister has always looked to,” Wright said.
Now graduated, Wright works for Big Brothers Big Sisters. He grew up in a disinvested neighborhood where violence was rampant. He says it’s fulfilling but also stressful to help kids facing those challenges today.
“You're doing the same thing for those kids that someone did for you,” Wright said. “A lot of the kids are low income, terrible neighborhoods, unsafe, bullied, or just very bad situations. And they don't have folks in their lives to show them what a beach is. They've never been to a beach, they've never been to a skating rink. So these kids, they look up to you, they count on you, they look to you for encouragement.”
But Wright is still in a precarious financial situation. He says he has about $50,000 in student loan debt, and he moved out of his apartment and in with his disabled parents to save money because he now serves as both of their caregivers. Wright also watches his nephew when his sister works the overnight shift.
Wright was the first in his family to attend college and wants to make sure schools like ODU do a better job of helping students complete financial aid paperwork and understand the burden college debt can become, especially for first-generation college students like him.
“This isn't something to play with,” Wright said. “This isn't…let’s walk around campus, let's do a tour of all the fun places…this is business. This is financial.”
It can also make the difference between a student graduating or not. Financial counseling is one component of a study lawmakers are hoping to sign off on during budget talks. Study language was added to Carr’s version of the transcript withholding bill. Maryland lawmakers have ordered a similar study.
“There is going to be a good study, and we're going to have some good legislation coming out of this,” Carr said. “Sometimes a good idea comes up and the bill, the first year the bill comes out, it doesn't go anywhere because it isn't fully formed. I think everybody knows that something needs to be done. They want something done, but they want the right thing done.”