How to Prepare for New Transcript Hold Regulations

Friday, March 29, 2024

The Department of Education (ED) released final rules relating to the Title IV Program Participation Agreement and Certification procedures. According to ED, these rule changes, which go into effect on July 1, 2024, will ban transcript withholding in certain situations.

While it's expected that institutions want to collect past-due student balances, the practice of withholding transcripts has come under increasing regulatory scrutiny in recent years, with dozens of states enacting their own restrictions. Soon, institutions’ ability to incentivize repayment of a delinquent accounts receivable (AR) balance by withholding the student’s transcript will be severely limited.

In a conversation with the Coalition of Higher Education Assistance Organizations (COHEAO) and the American Association of Collegiate Registrars and Admissions Officers (AACRAO), ECSI explored the mood on Capitol Hill, the changes to state and federal laws, and alternate options to incentivize repayment and help students stay enrolled.

Here are the key takeaways that institutions can consider when reviewing this regulation and its implications for collecting past-due AR:

Look For Guidance From The Department Of Education

We received hundreds of questions from thousands of attendees about how the Transcript Hold ban will impact their current processes. While our speakers answered as many questions as possible, we anticipate the Department will share further guidance to clarify aspects of the regulations.

Transcript Holds Related To Debt Can Still Be Used

In specific circumstances and states where the practice is not banned, transcript holds for some types of debt are allowed. In addition, transcript holds for reasons other than debt may still be used if the purpose does not conflict with the use of a transcript hold for debt.

States Add A Layer Of Complexity

Stay up-to-date on your state-specific laws and regulations to remain in compliance. When there is a state regulation mandating institutions to report and/or collect outstanding debts from students, institutions might need more clear direction on how to handle potential conflicts. Consult your institution’s general counsel on how to proceed when encountering conflicts.

Know Your Population and Processes to Coordinate Your Plan

Evaluate your affected student population and current processes before addressing regulations and their effects on processes. Spend time coordinating with your business office, AR team, financial aid office, registrar, bursar, and student services to develop a plan for how to work together on the coming changes.

Continuously Review, Update, and Assess Your Policies and Procedures

Take stock of your policies, procedures, and Student Financial Responsibility Agreements (SFRAs) to ensure they reflect the new regulations. After implementing new policies and procedures, monitor the results to assess what works well and what needs adjustments.

Be Proactive And Communicative

A significant part of your coordinated plan with other offices is to standardize communications to students, as our research shows that one of the greatest reasons institutions struggle with past-due AR is a need for clearer, consistent communication across campus.

Use multiple communication channels, including letters, emails, calls, SMS text messaging, and flyers posted in hallways of academic buildings, residence halls, and other locations students regularly visit. Be timely with your communications to remind students of deadlines and get ahead of problems before they occur.

If a student’s account does become past due, ensure your legal counsel has reviewed your communication strategy and cadence; then use a standardized outreach process to reengage students and provide payment options.

Early engagement produces the highest resolution rates and a soft-touch approach is a best practice when engaging students.

Use Technology To Improve Your Processes And Productivity

Implement flexible solutions and student-friendly services that align technology and automation with the needs of students and the institution. The solutions and services should use integrations with your student information system (SIS) to increase efficiency and productivity. Data-driven resolution technology and a compassionate approach can reduce staff workload and help students reach their academic goals.

Prepare for a Successful New Normal

Learn more about how transcript regulations will affect your institution by watching our on-demand webinar, Transcript withholding and your institution: What to expect in 2024. In this webinar, you will hear policy experts at ECSI, COHEAO, and AACRAO discuss the various state and federal regulations related to transcript withholding, discover tools that can keep your institution compliant while collecting past-due AR, and learn best practices to proactively recover past-due AR without holding transcripts.

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