Opinion: If you don’t pay the bill, should you get the goods?

How many businesses do you know of that continue to provide services when customers refuse to pay their bill? Colorado may soon require an entire industry to do so if Gov. Jared Polis signs HB22-1049, passed by the General Assembly.

This bill effectively requires schools to release transcripts for students even if they owe the school money and have not paid their bill. Technically, the bill is not a blanket ban on withholding transcripts; it just forbids withholding transcripts for nearly every case in which a student may want one.

On one hand, this may seem like a good idea. Don’t we want students to be able to transfer, get a job, or send their transcript somewhere? Of course we do!

On the other hand, this incredible overreach into the daily practices and policies of schools should raise red flags for any businesses interested in getting paid for services they provide. Withholding a transcript is one of the very few remedies schools have to get students to pay their bill once they have left the institution.

Why is HB22-1049 a bad idea? In states that have passed laws similar to this, schools have changed their practices in ways that hurt students.

Some California schools, for example, now are delaying disbursement of federal aid until late in the semester. Why? Because unless the student completes 60% of the semester, some of that money must be returned to the government. If the student doesn’t return the money, the school is on the hook for it.

Withholding a transcript is a way to ensure the student eventually repays the school for the money it had sent to the government. Denied that leverage, schools are holding on to the aid money until the risk of refunds to the government has passed.

The result: students don’t have the federal aid money at the start of the semester, when they need to pay for books, supplies, a laptop, transportation or living expenses.

Proponents of the bill use phrases such as “holding transcripts hostage,” but schools are doing nothing other than what every other business does that provides a service: require payment before continuing to provide additional services. The government doesn’t tell the cable provider they have to keep providing cable to the person who won’t pay their bill. 

The State itself goes to greater lengths to collect money owed to it. If you don’t pay your taxes in Colorado, the Department of Revenue can prevent the sale of your house or land, seize property such as cars, boats, or real estate, and more.

If the State can use drastic means such as these to collect money owed to it, it should not require other businesses to continue to provide services when they have not received payment for previous services.

The American Association of Collegiate Registrars and Admissions Officers recently released a statement against laws such as HB22-1049. The association’s evidence suggests “this solution exacerbates the problem by triggering an institution to adopt a more complex work-around to achieve the same result.”

For example, schools have suppressed the grades for unpaid semesters, denied awarding degrees until debt is cleared, and resorted to other barriers that sidestep the law.

In addition to resorting to means to sidestep laws like this, schools will resort to collections and negative credit reporting much more often and sooner in the debt-collection process. This has a dramatic negative impact on students’ credit score, the ability to rent or buy a house, and other long-term financial consequences that cause students harm.

The registrars association concluded that bills such as this “will make policy makers feel good but is ultimately performative and not productive.” Schools do not want to withhold transcripts from students, but they must be able to collect on unpaid debts.

Given that the law will cause more harm than good for students and that it will only lead to schools finding other creative solutions to collect debts, I encourage a veto of HB22-1049. 

Jeremy Wallace, of Lakewood, is university registrar & assistant vice president at Colorado Christian University.