VIEWPOINT: New state law bars colleges from withholding transcripts of indebted students

On May 4, 2022, Gov. Kathy Hochul signed into law A.06938B, which amends New York State Education Law. It adds a new Article 13-C; §640, which prohibits degree-granting institutions and licensed private career schools from withholding transcripts of students who owe a debt to the institution. 

It is also unlawful under §640 for institutions to condition the release of a transcript upon the student’s payment of the debt. Finally, institutions may not charge a higher fee or provide less favorable treatment of a transcript request because a student owes a debt to the school.

The law provides authority for the New York Superintendent of Financial Services to impose a penalty of $500 for each violation an institution has been found to have committed after notice and hearing. Furthermore, individuals who have been injured as a result of prohibited practices under §640 may bring a civil action against [a college, university, or career school] to enjoin such practices, and a court, in its discretion, may award reasonable attorneys’ fees to the prevailing plaintiff.

The new law is effective as of June 3, 2022. The full text of the new law can be found at: https://www.bsk.com/uploads/NY-Educ-Law-640.pdf.      

Sandra M. Casey is senior counsel in the Albany office and Higher Education practice of Syracuse–based law firm Bond, Schoeneck & King PLLC. Contact her at scasey@bsk.com. This Viewpoint article is drawn and edited from Bond’s Higher Education Law Report blog.