More than ten years ago, Pedro Rodriguez, a talented keyboard musician, came from his colonial homeland of Puerto Rico to go to Temple University. From a low-income family, he depended heavily on student loans to finance his four-year undergraduate study. Graduating summa cum laude with a bachelor’s of music, he went on to earn a master’s degree in music from Temple and then was hired for three years to teach there as an adjunct. By the end of college, he was $62,000 in debt but was making payments regularly until Temple laid him off, allegedly because of budget cuts. That’s when his problems began. (Pedro Rodriguez is a pseudonym to protect his identity.)
Unable to find a job as a music teacher in the current economic crisis, he eventually went into default on his loans, which included Stafford, Perkins and private bank loans. Then this year, he decided to go on to earn a PhD, which would make it possible for him to get hired in his field. He applied to a top-rated university in the Northeast, but when it was time to send his school transcripts, Temple froze him out. “They said as long as I was in default on my loans, they would not issue a transcript!” says Rodriguez.
A spokesman from Temple confirms that it is school policy to withhold official transcripts from graduates who are in default on their student loans. As it turns out, the school is not alone; this is the position taken by most colleges and universities, though there is no law requiring such an extortionate position. They do this despite the fact the colleges themselves are not out the money. They have received the students’ tuition payments in full and are in effect simply acting as collection agencies for the federal government.
The US Department of Education says only that it “encourages” colleges to withhold transcripts, a tactic which the department, in a letter to colleges, claims coldly “has resulted in numerous loan repayments.” But particularly in a time when the real unemployment rate is stuck at over 15 percent, or, if long term unemployed who have given up looking for work are included, at 22 percent, it seems not just heartless, but counter-productive for schools to block their own graduates from obtaining a document they need to move on to a higher degree or to get hired in their chosen field.
“It’s worse than indentured servitude,” says NYU Professor Andrew Ross, who helped organize the Occupy Student Debt movement last fall. “With indentured servitude, you had to pay in order to work, but then at least you got to work. When universities withhold these transcripts, students who have been indentured by loans are being denied even the ability to work or to finish their education so they can repay their indenture.”
The growing tsunami of student loan defaults is more than a series of personal tragedies. It is killing the dream of many low-income students who saw college as the best chance to rise out of poverty, only to find that after borrowing heavily to pay for school, they cannot get the paper needed to document their accomplishments, cannot get a job and cannot even declare bankruptcy to escape their plight. Congress, after pocketing wads of bank lobbying cash, made it all but impossible to use bankruptcy to escape student loans, requiring a court finding of “undue hardship”—an almost impossibly high legal hurdle.