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Request a Demo‘This is wrong’: How transcript holds block Hoosiers from completing their schooling
The Gist
Colleges across Indiana can withhold transcripts from former students who owe money in an attempt to incentivize them to pay up. The issue, though, is that without a transcript, students oftentimes can’t further — or complete — their education or boost their incomes in order to make enough money to pay back those debts.
Freshman Sen. Spencer Deery, a West Lafayette Republican and former Purdue University administrator, said withholding transcripts creates a “trap” for Hoosiers. He is carrying a bill this legislative session to limit the practice, as long as students are working to pay down their debt.
No college has openly opposed the bill, but some have privately shared concerns.
What’s happening
More than 100,000 Hoosiers owe an average of $2,800 to higher education institutions, according to a 2021 estimate from Ithaca S+R. A majority of universities across the country withhold transcripts in an effort to get those dollars back.
But having no record of college credits can impede someone’s ability to apply for jobs, pursue internships or further their education later on. Those with a college degree make roughly 1.5 times more than those with only some college credit, 2021 numbers from the Bureau of Labor show.
Experts say oftentimes the issue stems from when a student who receives Pell Grants and other financial aid leaves a university in the middle of the semester. When that happens, the university has to return the financial aid to the federal government, leaving the student on the hook for the money.
If that student tries to complete their degree years later, they often can’t obtain their transcript until they pay off the debt. And student loans won’t cover past debt.
Those who drop out at the end of a semester can be burned too. Rep. Ragen Hatcher, D-Gary, knows firsthand. Her son declined to take out student loans at the beginning of the year, thinking his job would cover his educational costs. They didn’t.
He planned to transfer to Indiana University–Purdue University Indianapolis from another college at the end of a semester, but couldn’t access his transcript due to a $16,000 outstanding balance.
Hatcher dipped into savings and retirement dollars to pay off the debt. Her son was a minor when he started college, which helped him avoid a $4,000 collection fee. The price tag, though, was still a burden.
“For anybody to come up with a lump sum in the thousands of dollars,” Hatcher said, “is difficult no matter if you’re a state representative or a teacher or a doctor or a factory worker.”
Mary Jane Michalak, vice president of legal and public affairs at Ivy Tech Community College, described a similar story. She dropped out of college after her first semester due to family issues 20 years ago. When she tried to return to school years later, she discovered she had debt and was forced to take out a personal loan to pay it off before she could obtain her transcript.
“It was literally preventing me from going back to college,” Michalak said, “and furthering my life.”
The concept of “stranded credits” is a nationwide concern. So far at least six states have banned the practice.
Why it matters to all Hoosiers
Indiana falls short when it comes to college attainment, which those in the business community say hurts Indiana’s ability to attract high-paying employers and jobs. A little over a quarter of the state’s adults 25 years and older have a college degree, 43rd in the country.
“We’re a competitive business state in every metric except for our education,” Deery said. “We need to start figuring out how do we change that, and I think this was a big piece of the puzzle that’s missing from the conversation.”
Multiple companies that have passed up Indiana in favor of other states have referenced the winning state’s labor pool as one reason they made their decision. For example, Intel, a Silicon Valley semiconductor maker, chose the Columbus, Ohio, area to construct two new chip factories in part due to its “strong talent pipeline sustained by world-class educational institutions”.
In Indiana alone, more than 800,000 Hoosiers 25 years of age and older have some college credits but no degree, according to U.S. Census Bureau estimates.
It's unclear how many of them would return to school if they were not required to pay off school debts to acquire past transcripts. However, lawmakers and supporters believe every bit helps ensure Indiana's talent pool.
“[Some people] are stuck in sort of a transcript limbo, lacking a record of the college credits they’ve earned, saddled with debt and stymied from completing the remaining credits to earn their degree,” said Jason Bearce, vice president for education and workforce development at the Indiana Chamber of Commerce, “which will of course increase the prospect of paying off that debt.”
What lawmakers are proposing
Senate Bill 404 would prohibit state or private for-profit colleges from withholding transcripts from former and current students that owe money to an institution, as long as they are making some payments.
“I wanted to give them a little nudge to say this is wrong,” Deery told State Affairs.
If a student owes less than $1,000 and paid at least $100 in the past year toward the debt, the university couldn’t withhold a transcript. Likewise, students who owe more than $1,000 and paid the lesser of 10% of the total debt or $300 in the past year, the university couldn’t withhold their transcript.
The bill no longer applies to nonprofit post-secondary institutions, because those colleges don’t have the ability to intercept tax rebate money, Deery said.
The legislation could still be amended as it works its way through the Senate.
Will this hurt universities?
No organization spoke against the bill in committee, but Deery said he has heard concerns about the bill’s impact from colleges.
A spokesperson from Indiana University told State Affairs the university is “watching” the bill, but provided no comment beyond that. Likewise, a spokesperson for Purdue University said the college “will continue to work with the bill’s authors,” adding that the college works with students to release transcripts when it could lead to jobs that help pay off debt.
But public colleges searching for a blueprint to ensure they can still collect money from former students can look to Ivy Tech, which operates 43 locations throughout Indiana.
Ivy Tech chose to release transcripts for the almost 83,000 students who owed the system money in late 2021. More than 3,000 people have reached out to obtain their transcripts since the policy change.
Ivy Tech still can collect money from former students by intercepting their tax returns if they aren’t participating in a payment plan, allowing the university to collect about $4 million per year, Michalak said.
A spokesperson for Ball State University said the university also stopped withholding transcripts “a few weeks ago,” after the bill had already been introduced and following months of internal discussion.
Deery said he’s trying to find a balance with his bill and understands that colleges need to incentivize students to pay down debt somehow.
“But,” Deery said, “what I do have a problem with is if there is a debt getting in the way of somebody’s educational journey.”
The bill won’t eradicate the problem for all former students who owe money, since private universities are excluded from the bill.
What’s next?
SB 404 passed out of the Senate by a 47-2 vote last month, but it’ll need to also pass the House before it can become law.
The House Education committee is scheduled to hear the bill on Wednesday.
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Header image: Illustration by Brittany Phan/State Affairs
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3 takeaways from Wednesday’s gubernatorial debate
Three Republicans vying to be the state’s next governor ramped up attacks on the gubernatorial front-runner, U.S. Sen. Mike Braun, during a televised Wednesday debate.
Five of the six Republican candidates — Braun, Lt. Gov. Suzanne Crouch, former Commerce Secretary Brad Chambers, Fort Wayne businessman Eric Doden and former Attorney General Curtis Hill — qualified for the debate, hosted by WISH-TV. Jamie Reitenour was the lone GOP candidate to be excluded from the event. Her campaign said she was disqualified for not meeting a $300,000 fundraising stipulation by December.
Here are three takeaways from the face-off.
Attacks on Braun increase
Braun, who touts a large lead in recent polls and former President Donald Trump’s endorsement, was the subject of many pointed attacks from Chambers, Doden and Hill. Crouch, however, mostly abstained from criticizing Braun directly during the debate.
Hill lambasted Braun for the latter’s claim of being a political “outsider,” saying the senator has “been in the system long enough.” Chambers similarly lobbied skepticism of Braun’s claim, arguing that a candidate who has been on the ballot as often as Braun couldn’t hold the title. Braun, a state lawmaker from 2014 to 2017 and a U.S. senator since 2019, said he still considered himself a political outsider, choosing to define the term by “what you have done for most of your life.” He added that the “ultimate outsider” had endorsed him.
In addition, Chambers ribbed Braun for his record on his taxes, claiming the senator “touched 45 tax increases” during his time in the Indiana General Assembly. Doden again questioned Braun’s stances on qualified immunity and Black Lives Matter.
Immigration
The candidates’ pursuit of Braun continued throughout the night, especially when discussing the nation’s southern border and their stances on migrants.
“Sen. Braun used the word[s] ‘lie’ and ‘distort.’ I think that’s applicable to his role on the border,” Chambers said. “There’s 7 million people that have come in on his watch. … So he’s done literally nothing to stop the flow of illegal aliens over our border.”
Braun blamed President Joe Biden’s administration for what he believes are its failures at the border. All of the other candidates expressed similar sentiments but also blamed Congress.
“President Biden needs to do his job. Congress needs to do their job, and that includes Sen. Mike Braun,” Doden said. Doden’s policy proposals on the matter include stricter sentences for drug dealers and more resources for people with addictions.
Hill said Hoosiers sent Braun to find solutions to a range of issues, including immigration. “I don’t want to hear blame — ‘it’s the Democrats; we couldn’t get that done,’” the former attorney general said. Hill also said Gov. Eric Holcomb “relented” to his calls to send Indiana’s National Guard to the southern border days after he suggested it.
Blaming “illegal immigrants” for “bringing deadly fentanyl into our communities,” Crouch said she would send them to sanctuary cities outside of Indiana.
Chambers claimed migrants are “taking jobs away from Hoosiers” and suggested they are causing increased crime. He, like all of the other candidates, committed to maintaining a Hoosier presence at the southern border.
Braun said his opponents “need to get Government 101 down” and shifted blame to the Democratic Senate. He added that it was “easy” for the other candidates to suggest immigration policies when they “had never been in the position of doing it.”
Education
The candidates also addressed their thoughts on education, with some showing slight differences from Republican state lawmakers over policy priorities.
Asked whether they supported the recently passed Senate Enrolled Act 1, which could see some third graders who are not reading on grade level held back, only Crouch and Chambers raised their hands.
Chambers, echoing Republican state lawmakers, said it is unacceptable for third graders to not have learned to read. He suggested the state spend less money on building costs and put more money into teachers’ salaries.
Crouch envisioned consolidating several state agencies that deal with education topics into one overarching agency, passing the estimated savings on to classrooms.
Braun wanted “more choice, more competition and something completely different.” However, he did not specify why he disagreed with the new law.
Hill said the state should weigh students’ needs individually rather than enforcing a “one size fits all” approach. “We need to provide individual assessments to make sure we are doing the right thing by these children,” he said. He also suggested the state “shrink the size” of the Indiana Department of Education.
Doden proposed a teacher investment program to address Indiana’s “teacher shortage.” The program, he said, would attract more teachers to the profession by ensuring they do not pay property and income taxes.
Regarding higher education, Hill said too many students are enrolling in college for a “worthless” degree. All of the candidates praised work-force development efforts — apprenticeships, internships, military programs, vocational programs — and said they would be key to improving Hoosiers’ outcomes.
“Higher [education] has stigmatized those pathways,” Braun claimed. “Our guidance counselors won’t mention them.”
Wednesday’s debate followed another televised debate hosted by Fox59/CBS4 on Tuesday, when four of the candidates — Braun, Chambers, Crouch and Doden — debated time zones, embryos and leadership styles (Hill and Reitenour did not qualify). They also graded Gov. Eric Holcomb’s tenure. Holcomb has yet to endorse any of the candidates, saying he awaits more policy specifics from their campaigns.
Previously, all of the candidates sparred at a March 19 business forum and a March 11 debate hosted by Current Publishing at the Palladium in Carmel.
Each of the candidates has been invited to participate in the Indiana Debate Commission’s April 23 debate, the last before the state’s May 7 primary. The winner of the Republican primary will face Democratic candidate Jennifer McCormick and Libertarian Donald Rainwater in the November general election.
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Statehouse memorial service for Sen. Breaux set for next week
Memorial services for the late state Sen. Jean Breaux will include a public program at the Statehouse Rotunda next week.
Breaux, who died March 20 at the age of 65, will be honored with a public viewing in the Rotunda set for 4-7 p.m. April 5, the Senate Democratic Caucus announced Wednesday. An official memorial program is planned for 5 p.m.
A Celebration of Life for Breaux is scheduled for 11 a.m. April 6 at Mount Carmel Baptist Church, 9610 E. 42nd St. in Indianapolis. Viewing is planned for 9-11 a.m. at the church.
Breaux, a Democrat, had represented District 34, which covers much of northeast Indianapolis, since 2006 and was the Senate’s assistant minority leader from 2012 until 2020.
She was absent from the entire 2024 legislative session because of health problems.
Breaux died two days after releasing a statement saying she planned “to focus on enjoying the time I have left surrounded by my loved ones.”
“I want to express my sincerest gratitude to everyone who has reached out, to my Statehouse colleagues and team, and to the community I have been so incredibly grateful to represent for nearly two decades,” Breaux said in the statement.
Breaux’s family asked that in lieu of flowers, donations be made to the National Kidney Foundation in her memory.
Tom Davies is a Statehouse reporter for State Affairs Pro Indiana. Reach him at [email protected] or on X at @TomDaviesIND.
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