New regulations protect students’ access to education and improve transparency in financial aid

  • New regulations from the Department of Education ban colleges from withholding transcripts as a debt-collection tactic
  • The ban applies to terms where a student used federal financial aid to fund their education and has fully paid off the bill
  • The ban aims to ensure that students receive credit for completed education and help with transfer and job opportunities
  • The Consumer Financial Protection Bureau has deemed blanket policies to withhold transcripts as abusive
  • The new regulations also require clearer communication about financial aid, including cost of attendance and net price
  • The regulations aim to protect students and taxpayers from the consequences of school closures

Colleges will no longer be able to withhold transcripts as a debt-collection tactic, thanks to new regulations from the Department of Education. The ban applies to terms where a student used federal financial aid, such as student loans and Pell grants, to fund their education and has fully paid off the bill. This change aims to ensure that students receive credit for the education they have completed and helps them with transfer and finding a job. The Consumer Financial Protection Bureau has previously deemed blanket policies to withhold transcripts as abusive. In addition to the ban on transcript withholding, the new regulations also require clearer communication about financial aid. Colleges will be required to include a school’s cost of attendance, the source and type of financial aid offered, and whether the aid needs to be earned or paid back. The regulations also aim to protect students and taxpayers from the consequences of school closures by requiring schools to be financially prepared for closures and loan discharges. Overall, these regulations aim to improve transparency in financial aid and protect students’ access to education.

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Key People: James Kvaal (Undersecretary of Education), Winston Berkman-Breen (Legal Director at the Student Borrower Protection Center), Miguel Cardona (Secretary of Education), Clare McCann (Higher Education Fellow at Arnold Ventures), Rachel Fishman (Director of the Higher Education Program at New America)

Factuality Level: 8
Justification: The article provides information about new regulations announced by the Department of Education regarding the withholding of transcripts by colleges as a debt-collection tactic. It also mentions the previous scrutiny on this practice and the banning of it in some states. The article includes quotes from officials and advocates, as well as statistics on student debt. Overall, the article provides factual information and presents different perspectives on the issue.

Noise Level: 7
Justification: The article provides information on a new regulation that prohibits colleges from withholding transcripts as a debt-collection tactic. It also discusses the impact of this practice on students and the efforts made by some colleges to address unpaid balances. The article mentions the criticism of the practice by the Consumer Financial Protection Bureau and the actions taken by some states to ban it. It provides statistics on the number of students with outstanding debts and the potential benefits of the new regulation. The article also discusses other aspects of the Department of Education’s regulations, such as clearer communication about financial aid and requirements for colleges to be financially prepared for closures. Overall, the article provides relevant information and supports its claims with examples and data.

Financial Relevance: Yes
Financial Markets Impacted: The article does not provide information on specific financial markets or companies impacted.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses new regulations announced by the Department of Education regarding the withholding of transcripts by colleges as a debt-collection tactic. While this is a significant development in the education sector, it does not pertain to an extreme event or have a direct impact on financial markets or companies.