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Congress and the Biden administration should require colleges and universities to forgive all institutional debt as a condition of getting additional coronavirus relief funds, said the Student Borrower Protection Center.
At the least, institutions should not be allowed to withhold students’ transcripts because they owe money, said the group run by Seth Frotman, former assistant director and student loan ombudsman for the Consumer Financial Protection Bureau during the Obama administration, in a report published Monday.
“For too long, institutional debts have flown under the radar of the broader conversation around the student debt crisis,” said the report, noting debts to institutions have ballooned to $15 billion.
”It threatens borrowers’ credit, drives delinquencies, and puts borrowers at the mercy of schools and collection agencies,” the report said. “Schools often withhold the transcripts of their students who owe institutional debts -- preventing them from graduating, transferring, or even getting jobs that they are qualified for.”
And, “especially at a time when students are facing unimaginable financial precarity, we must take care of borrowers drowning in all forms of debt, including those debts they take on directly from colleges,” the group said.
