NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6938B
TITLE OF BILL:
An act to amend the education law, in relation to prohibiting certain
practices in the collection of student debt
PURPOSE OR GENERAL IDEA OF BILL:
To ensure students have access to transcript data necessary to complete
their degree and obtain employment, where such data is currently with-
held due to outstanding debts owed to a postsecondary institution.
SUMMARY OF PROVISIONS:
Section one amends the Education Law to:
* Prohibit degree granting institutions and licensed private career
schools from 1) withholding a student's transcript because of a debt to
the school or institution, 2) conditioning the provision of a student's
transcript on the payment of a debt to the institution or school, or 3)
charging a higher fee or provide less favorable treatment of a tran-
script request because a student owes a debt to the institution or
* Ensure that the state does not bear the full cost of compliance by
establishing remedies for students harmed by the withholding of a tran-
Section two sets an effective date of 30 days after the bill becomes
Thousands of New York residents owe 'institutional debts'-debts owed by
the student directly to a college or university, often for small
balances tied to unpaid tuition, library fines, or even parking tickets.
Today, postsecondary institutions across New York, including for-profit
colleges, coding bootcamps, vocational schools, as well as public and
private nonprofit universities, are currently withholding students'
official transcripts because of outstanding institutional debts. As a
result, students are prevented from re-enrolling in school to finish
their degrees or qualify for careers in the fields for which they
trained-simply because these students cannot provide official records of
According to preliminary research, within the SUNY system alone, there
are 40,000 open institutional debt accounts. Other research on for-pro-
fit schools and private colleges in the state indicate that tens of
thousands additional New Yorkers are also currently being denied access
to their official transcripts. Transcript withholding forces students
into an unaffordable Catch-22: without their transcript, they cannot get
a better job. And without a better job, they cannot pay off their debt
to release their transcript. For decades, this practice has stymied the
futures of New York residents. Each withheld transcript represents a
student who was denied the opportunity to pursue a chosen career path,
denied access to social and economic mobility through higher education,
and ultimately denied access to the American Dream.
As this state begins down the long road of helping its citizens recover
from the economic fallout of the pandemic, it has the opportunity to
change this dynamic. In fact, with this legislation, New York can
improve the future economic prospects of its citizens.
Importantly, this legislation does not prevent schools from collecting
on past due debts. Instead it simply removes an ineffective and counter-
productive barrier to students' ability to successfully repay that debt.
Additionally, this legislation encourages students to complete their
degrees by targeting College Access Challenge Grant funds to cover the
remaining costs of tuition. Collectively, these measures will ensure all
residents of New York have the right to a full and complete higher
PRIOR LEGISLATIVE HISTORY:
This act shall take effect on the thirtieth day after it shall have
become a law.
STATE OF NEW YORK
2021-2022 Regular Sessions
April 14, 2021
Introduced by M. of A. EPSTEIN, SEAWRIGHT, STECK, BURDICK, DINOWITZ,
CLARK, MAGNARELLI, GONZALEZ-ROJAS, GOTTFRIED, KELLES, SIMON, ZINERMAN,
COLTON -- read once and referred to the Committee on Higher Education
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee -- recommitted to the Committee on
Higher Education in accordance with Assembly Rule 3, sec. 2 -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT to amend the education law, in relation to prohibiting certain
practices in the collection of student debt
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The education law is amended by adding a new article 13-C
2 to read as follows:
3 ARTICLE 13-C
4 STUDENT DEBT; PROHIBITED PRACTICES
5 Section 640. Student debt; prohibited practices.
6 § 640. Student debt; prohibited practices. 1. No degree-granting
7 institution or licensed private career school, as defined by section
8 five thousand one of this chapter, shall:
9 (a) withhold a transcript because a student owes a debt to such insti-
10 tution or school;
11 (b) condition the provision of a transcript on a student's payment of
12 a debt to such institution or school; or
13 (c) charge a higher fee or provide less favorable treatment of a tran-
14 script request because a student owes a debt to such institution or
15 school, provided however, that an institution or school may charge a fee
16 for the issuance of a transcript.
17 2. In addition to such penalties as may otherwise be applicable by
18 law, the superintendent of financial services may, after notice and
19 hearing, enjoin such transcript withholding practices and require any
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 6938--B 2
1 institution or school found to be in violation of the provisions of this
2 article to pay to the people of this state a penalty of five hundred
3 dollars for each violation.
4 3. In addition to the right of action granted to the superintendent of
5 financial services pursuant to this section, any person who has been
6 injured by reason of any violation of this section may bring an action
7 in their own name to enjoin such unlawful act or practice. The court
8 may, in its discretion, award reasonable attorneys' fees to the prevail-
9 ing plaintiff.
10 § 2. This act shall take effect on the thirtieth day after it shall
11 have become a law.