A bill advancing at the Statehouse would prohibit Indiana colleges from withholding transcripts over debt

A bill that passed out of the Senate education and career development committee Wednesday would ban colleges from withholding transcripts from students with outstanding debt. The legislation could help thousands of students.

If passed, the bill would allow students to have access to their transcripts as long as they pay at least $100 towards their debt during the previous year. They can also set up a payment plan, as long as their total debt owed is under $1,000. In order to get transcripts for debts over $1,000, students must pay a maximum of 10 percent of the debt, but no more than $300.

Sen. Spencer Deery (R-West Lafayette) authored the bill. He said he recognizes that the maximum of $300 might keep some students from going back to school.

“My hope and belief, though, is that it's not an amount that will be insurmountable, and that won't have a significantly adverse effect on the goal,” he said.

Withholding transcripts is a popular debt-collection technique across the country. Indiana is one of 43 states that allows the practice, which disproportionately targets low-income students and Pell Grant recipients.

Transcript access is necessary to re-enroll at a post-secondary institution or complete an unfinished college degree. Without it, students may have to retake classes -- which can pile on more debt.

The ban on transcript-withholding would not forgive any debt. It would also prohibit an institution from charging a higher fee for students who owe debt and are requesting transcripts.

The bill comes a little over a year after Ivy Tech Community College lifted their transcript-withholding policy.

Contact WFYI economic equity reporter Sydney Dauphinais at sdauphinais@wfyi.org. Follow on Twitter: @syddauphinais.