Schools Cannot Withhold Student Transcripts or Charge a Higher Fee to Obtain Transcripts Because of Unpaid Student Debts

Number: 
55-0603
Date Issued: 
06/03/2022

An amendment to Article 13-C, §640 of the New York Education Law, effective June 3, 2022, prohibits licensed private career schools from withholding a student’s transcript because of unpaid debts or charging students who owe a debt a higher fee to obtain their transcript. This legislation ensures that students can access their transcript when necessary, so that they may continue their education or find employment. 

View the text of New York Education Law §640.

Summary of Section 640:

  1. No degree-granting institution or licensed private career school shall:
    1. withhold a transcript because a student owes a debt to such institution or school;
    2. condition the provision of a transcript on a student's payment of a debt to such   institution or school; or
    3. charge a higher fee or provide less favorable treatment of a transcript request because a student owes a debt to such institution or school, provided however, that an institution or school may charge a fee for the issuance of a transcript.
       
  2. The New York State Department of Financial Services (DFS), after notice and a hearing, may enjoin such transcript withholding practices and require any institution or school found to be in violation of the provision to pay a penalty of $500 for each violation.
     
  3. In addition to the right of action granted to the superintendent of DFS, any person who has been injured by reason of any violation of this section may bring an action in their own name to enjoin such unlawful act or practice. The court may, in its discretion, award reasonable attorneys' fees to the prevailing plaintiff.

Students affected under §640 can file a complaint with the New York State Department of Financial Services.

Education Law § 640 solely prohibits a licensed private career school from withholding a transcript or charging a higher fee to obtain a transcript because of unpaid student date.

As per 8 NYCRR §126.7(f) of the Commissioner’s regulations, if a diploma or certificate is to be withheld by the school until all fees and charges have been met, the enrollment agreement must so state, and such documents may then be withheld except as otherwise provided by law.

Implications for BPSS Review:

  • BPSS will not approve any enrollment agreement or course catalog that contains language providing that a student’s transcript can be withheld until the student pays an outstanding balance or any fees owed.
     
  • BPSS will not approve any enrollment agreement or course catalog that contains language providing that a student must pay a higher fee to obtain a transcript until the student pays an outstanding balance or any fees owed.
     
  • Schools with currently approved enrollment agreements or course catalogs containing language related to withholding transcripts or charging higher transcript fees until balances or outstanding fees are paid, will be required to remove such language immediately. BPSS will review school compliance at the point of the school’s next review or inspection, routine request for changes, curriculum renewal period, or school renewal period, whichever event occurs first. 
     
  • Pursuant to 8 NYCRR §126.6(d) of the Commissioner’s regulations, the director of the licensed private career school is responsible for all activities of the school or done in the name of the school. Thus, if the school demonstrates a pattern of violating Education Law § 640, this is a considering factor when BPSS evaluates whether the school director has the administrative and educational competency to operate the school pursuant to 8 NYCRR §126.6(d)(3) of the Commissioner’s regulations.

Questions:

Questions regarding this policy guideline should be directed, by email, to the school’s Field Associate.