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University withholding transcripts and collector claiming to not offer payment plan. What're my options?

Cape Canaveral, FL |

I attended a university in Boston. I used a Perkins loan to help pay for some of my tuition costs. The loan went delinquent a few months ago. I'm currently being offered a promotion at work(a $8-10K/year pay raise), but cannot accept the position unless I'm licensed in the state of FL. In order to obtain my license I need to send official transcripts to the state. I spoke with both the university and the attorney dealing with the debt and both stated they would not work with me to formulate a payment plan so that my transcripts may be released. I can better pay off the loan with my new job, but can't get the new job without my transcripts. The collector told me to call back in a few days.Is it possible they are bluffing? What're my other options?

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Attorney answers 4

Posted

Something is not adding up. Universities only "attempt" to withhold transcripts if there is unpaid tuition. They don't withhold transcripts for defaulted student loans.

You need to clarify the debts owed.

Asker

Posted

The debt owed is a Perkins student loan. The money is owed to the university and they are withholding my transcripts until they receive the money in full. On the university's website regarding transcripts, they state they can withhold transcripts due to defaulted student loans.

Asker

Posted

Perkins loans are campus-based loans, so I essentially borrowed money from the university, not an outside lender.

Posted

I agree with my colleague. Some facts seem to be missing.

It seems that you used student loans to pay for some of your tuition, what about the rest of the tuition? Were you responsible for the rest and has that obligation gone into default or delinquent status?

Generally speaking Colleges and Universities can withhold transcripts as a means of collecting payments. You may need to discuss with the university the status of your account with them, what is outstanding? Then try and make arrangements to make the payment.

In some rare instances you can retrieve your transcript from a college even though you owe them money, but you would have to prove that the tuition debt that was incurred did not result in you receiving any "educational benefit." Also, you would have to file a bankruptcy as well. It does not seem like that is the case in your situation. You may just need to try discuss the matter with your school and the debt collector. Good Luck!

The asking of and answering general questions does not establish an attorney-client relationship. Please consult with an actual attorney in your local area before deciding on a course of action.

Posted

No matter what you do, you should work on getting the loans out of delinquent status since delinquent status has ramifications. Depending on your employer and how valuable you are, they may offer some assistance to help you fix the problem. The only other possibility is to make an offer with the attorney or university. If you have half or even a quarter of the money, they may change their position. Money talks.

Posted

This trend is sadly increasing. You student loan companies may ask your university to withhold your transcripts, and you school is allowed to withhold the transcripts. The school really doesn't get a benefit for withholding, but more and more schools are doing it. You could file Chapter 13 and the automatic stay should lift the hold. You might try calling the University President or Provost and maybe they can overrule the decision. Alternatively seek to consolidate with Direct Loans, a government program, and apply for income based repayment. The consolidation will cure your default.