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Back when he was a sophomore at the University of Massachusetts Amherst, James Smith fell behind on his final housing payment after his family in Minnesota ran into financial problems. Smith said he promised to repay the university, but the registrar withheld his transcript anyway. 

“It was sort of like communicating with a brick wall,” he said. “I told them, ‘I’ll pay it when I can but I just don’t have the money.’ ”  

After UMass sent his $2,000 balance to a collection agency, Smith said he began receiving notices and phone calls informing him the collection fee would exceed his original balance. 

“It was certainly really frustrating when I was trying to pay what I owed, and essentially the debt had been doubled,” he said. “I thought it was just wildly predatory.” 

Public colleges in Massachusetts have sent to collection agencies the overdue accounts of 11,719 students, according to a GBH News-Hechinger Report investigation.  

The University of Massachusetts Amherst. The university sends students’ unpaid balances of as little as $100 to collection agencies, which add often significant fees.  Credit:  Kate Flock for The Hechinger Report

Nearly half of those pending cases come from the state’s 15 community colleges, more than 3,400 from the five-campus UMass system and the rest from other public institutions including Salem State (894) and Framingham State (702) universities. 

Related: Public colleges shock students by sending them to costly debt collection agencies 

State law requires the universities and colleges to send out for collection outstanding debts more than 90 days past due. The practice boosts the overall debt, as in Smith’s case, and lowers personal credit ratings. 

“I think the numbers tell us that, all in all, our institutions are doing a pretty good job of trying to mitigate the number of students who actually get sent to debt collectors.” 

Nate Mackinnon, executive director of the Massachusetts Association of Community Colleges.

The minimum debt sent out for collection varies, but at some schools, like UMass Amherst, it can be as little as $100. 

UMass Amherst would not comment on Smith’s case, even though he signed a form the university provided to waive his protections under privacy laws, but said administrators work with students to set up payment plans.  

Hidden Debt Trap

There’s a whole world of student debt that no one is talking about. In fact, most people don’t even realize it exists. Millions of students have racked up billions of dollars in debt owed directly to their own colleges and universities. 

We’re investigating this hidden debt.

Two state schools, Holyoke and Springfield community colleges, have hit pause on sending debt for collection due to the pandemic. Others say referral to a collection agency is not ideal but is necessary, and are standing by the policy. 

“I think the numbers tell us that, all in all, our institutions are doing a pretty good job of trying to mitigate the number of students who actually get sent to debt collectors,” said Nate Mackinnon, executive director of the Massachusetts Association of Community Colleges. “Getting to the point of sending something to a debt collector is obviously our path of last resort.” 

He said the state’s comparatively low level of financial support for public universities and colleges ties their hands. 

“Ideally, we’d send zero students to debt collectors,” Mackinnon said. “Unfortunately, we are a high-cost state when it comes to community colleges and public education. We don’t enjoy the state’s support at the level that other states do.” 

Public colleges in Massachusetts have sent to collection agencies the overdue accounts of 11,719 students.

Advocates call this practice of withholding transcripts and referring unpaid balances to collection agencies the “transcript trap.” They say it forces students to stumble on their way to crossing the graduation stage because it undermines their ability to document the credits they’ve earned and find well-paying jobs so they can pay off their debts.  

When a GBH News reporter asked UMass System President Marty Meehan whether holding transcripts and sending balances to collection were effective ways of recovering owed money, the former congressman did not directly answer the question. He said only that UMass administrators are committed to negotiating repayment plans. 

Related: Colleges are withholding transcripts and degrees from millions over unpaid bills 

“They work things out with students and make sure that students are in a position that they can graduate,” Meehan said during an unrelated news conference at UMass Boston. 

One student who attended the University of Massachusetts Amherst in the 1990s fell behind on his bill. Once the university sent it to a collection agency, he says, the balance doubled. Credit: Kate Flock for The Hechinger Report

The national picture resembles the state’s when it comes to collecting college debt. A pre-pandemic survey by the National Association of College and University Business Officers found nearly all schools — public and private — withhold student transcripts as a means of collecting overdue accounts and nearly all say they will eventually report that debt to a collection agency. 

It’s “just like a medical bill,” said Carly Eicchorst, a college administrator in Minnesota with nearly 20 years of experience in financial aid. “There’s exponential growth [in the balance] once the collection agency is involved.”  

Eicchorst, director of advancement operations at St. Olaf College, said a major problem is that the length of time colleges manage overdue balances varies from campus to campus. “It could be two months after you cease attendance. It could be two years after you cease attendance, and the students have no sense of that,” she said. 

While Eicchorst said she understands that colleges see holding transcripts and sending debt to collection as one way they can get what they’re owed, “there is just such a gap on the student understanding side.” 

Students may know the debt could balloon and appear on their credit reports, for instance, an issue that disproportionately hurts low-income students and students of color, she said. 

“They were already struggling to pay the bill, and now that it’s accruing it becomes impossible,” said Sosanya Jones, a Howard University professor who teaches courses on higher education policy.  

Jones said it’s hard to tell whether these transcript hold and collection policies are effective, but she’s skeptical. 

“In order to access that data, we would need institutions that come forth and actually open their books,” Jones said. “It doesn’t make a lot of sense to hold someone’s transcript hostage because then they’re not going to definitely continue to be enrolled in your college.” 

Related: Some colleges stop holding transcripts hostage over unpaid bills 

As some students struggle to make ends meet during the pandemic, researchers and administrators seem to agree: These policies are a bad look for higher education. 

The president of the University of Massachusetts system won’t say whether withholding students’ transcripts and sending their unpaid balances to collection are effective ways of recovering the money, just that the universities are willing to negotiate repayment plans. Credit: Kate Flock for The Hechinger Report

Some schools are reversing course, including Southern New Hampshire University and Bunker Hill and Middlesex community colleges in Massachusetts. All three have announced they’ve stopped blocking transcripts and SNHU has begun releasing the academic records of more than 2,000 students who owed the nonprofit college unpaid balances that average $728. 

In Little Rock, Arkansas, Philander Smith College announced during graduation ceremonies that the historically black institution would forgive all outstanding balances for the classes of 2020 and 2021. President Roderick Smothers told graduates the move was “in the spirit of doing all the good we can.” 

“If you’ve got a balance, know that your balance is no more,” he said.  

Graduates put on their masks, stood up and cheered. Some danced around their socially distanced chairs.  

Sosanya Jones of Howard, a leading historically Black university, predicts more schools will follow suit because the policies create negative feelings about colleges “in terms of alumni, in terms of word of mouth.”  

“That’s a loss of advertising when you just have students who are locked out of the system,” Jones said. 

More than 36 million Americans have earned some college credits but haven’t finished their degrees. Researchers say a major obstacle is colleges withholding transcripts and sending out for collection relatively small debts.  

“It doesn’t make a lot of sense to hold someone’s transcript hostage because then they’re not going to definitely continue to be enrolled in your college.” 

Sosanya Jones, Howard University  

Smith is now a 49-year-old labor lawyer in San Francisco. When he first heard the GBH and Hechinger Report coverage about colleges withholding transcripts for relatively small debts, he said, it instantly brought back memories of his experience with UMass Amherst in the 1990s.  

In the end, he said, he never did pay off his debt to UMass — or the agency’s collection fee.  

Related: Colleges face reckoning as plummeting birthrate worsens enrollment declines 

At home in Minnesota for the summer back then, Smith recalled how he did some back-of-the-envelope math. “Okay, it’s gonna be at least 500 to 700 hours of work at what I was able to make at the time and, to do that, I would’ve had to drop out of school anyway,” he said. 

Instead, he decided to take an extra course each semester at the University of Minnesota and went on to graduate in five years at the top of his class. His major? Economics. 

“I was extraordinarily fortunate,” Smith said. “In the scheme of things, I had to make up my sophomore year. But from my own experience I know that there have to be other students out there who weren’t as fortunate, who had to give up on trying to get their degree.” 

This story about colleges withholding students’ transcripts and sending small debts to collection agencies was produced in collaboration with The Hechinger Report. GBH’s Diane Adame provided research assistance. 

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