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Colorado students will have access to their transcripts and diplomas, even if they haven’t paid their tuition and other debts

Karly Schwab, who testified at a hearing for HB22-1049, said her parents’ bankruptcy derailed her studies at CU Boulder by causing her loans to be cut off. She continued classes for a semester, but was forced to drop out due to $7,000 in school. She then missed her chance to put a repayment plan in place and was sent for collection, doubling what she owed.

“I was young and didn’t know what I was doing, like most 18-year-olds,” she said, explaining that it took seven years to pay off the debt, during which time she didn’t. couldn’t re-enroll in school, nor could she get a transcript to transfer her accumulated credits to another institution.

Schwab recently made its final payment. Once the university releases her transcript, she will be able to earn an associate’s degree in sociology from Front Range Community College, where she took classes.

“The barriers put in place by the university made me feel like I was stuck forever. I mourn the time that was lost when I was younger and healthier,” said Schwab, who is now 27 and is dealing with medical issues. She currently works part-time for New Era Colorado, a liberal political organization that lobbied for the bill.

The impact of the new law could be significant: In a recent year, state institutions reported collecting about $242 million in student debt from people whose transcripts were withheld.

The bill was co-sponsored by Democratic Representatives Jennifer Bacon and Naquetta Ricks and Senator Brittany Pettersen.

Schools worry about loss of leverage

Representatives of colleges and universities have argued that withholding documents is their primary means of collecting debts from students. And they warned that in other states, institutions have responded to similar changes by raising tuition and changing how they distribute student aid.

“Where is the responsibility?” said Jeremy DeLeon, accounts receivable specialist at Colorado Christian University, noting that school costs are always announced in advance. And if students can take their credits without paying their debt, their next school “won’t experience the high risk and outstanding balance that student has with other schools.”

The new law does not prevent institutions from sending debts to collections, and they can still report unpaid debts to credit bureaus. Some opponents have warned this will happen more often if schools can no longer withhold transcripts, with potentially more costs and long-term damage to the credit scores of the people the bill’s sponsors are trying to help. .

Bridges said the legislature could still change the new law if it didn’t work as intended. “If this bill causes a specific spike in youth, especially low-income youth, being charged, we will reverse this policy,” he said.

Lawmakers have watered down the policy a bit from its original form. The final law says schools can withhold debt documents for tuition, room and board, or financial aid — unless the student can prove they need it for a applying for a job, transferring, applying for financial aid, joining the military, or pursuing other post-secondary educational opportunities.