Ohio’s punitive student debt collection hurting thousands trying to advance their futures. It must end.

Photo from GotCredit.com

My daughter Hannah has been a full-time student at Ohio State University since 2016. She took classes each summer to be able to graduate in four years, and when possible, she would take those in Cincinnati, where we live.

Now, because of Ohio’s punitive approach to student debt collection, she may not get the degree she has been working so hard to complete.

Her dad paid for classes at the University of Cincinnati the summer after her freshman year, but we had not agreed that he would pay the following summer. I figured that a worst-case scenario would be that I would have to take out additional Parent Plus loans, created to help parents cover a child’s tuition.

By the time I learned that Parent Plus loans can’t be used to pay for tuition at a school where the student is not enrolled full-time, I’d missed the payment deadline and UC tuition was way past due.

Then I learned that my daughter would not be able to graduate until we settled her debt, because UC will not send her official transcripts to OSU with a financial hold, and OSU will not grant the transfer credit for those classes. As Ohio law requires, that debt has been turned over to the Ohio Attorney General’s office for collection, which has made it much harder to get into a payment plan.

I’ve also learned that my daughter and I are not alone. A recent report by Policy Matters Ohio revealed that there are 390,000 active student debt accounts with the AG, and that withholding transcripts of students who owe money is standard practice among Ohio’s public colleges and universities.

The collection process set up by the AG is deeply flawed, allowing for outrageous fees with no disclosure or explanation, and it doesn’t provide any advocacy, oversight or even impartiality for the consumer.

Our debt started at $2,278 in the summer of 2018. Not even two years later it has more than doubled, to $4,680.04. Added to that is the withholding of her UC transcript, which is threatening her ability to get her degree.

Our account has passed first from the university to a loan servicer, then to the AG’s office, and now to a third-party collection agency under contract with the AG. At each step in the process the amount of the debt has increased, often with no documentation or explanation.

Conflicts of interest are built in. Reliant Capital Services, the AG’s debt collector, now acts as a mediator between me, as the borrower, and the university. But they are not impartial because Reliant will earn less for their collection efforts if UC settles for less than the amount being collected. It’s also my understanding that agreeing to settle for a reduced amount requires full payment, without the option of a payment plan. This means people who can’t pay in full get stuck owing the ballooned amount.

This isn’t just about me and my daughter. It’s a statewide problem affecting thousands of Ohioans. Our state’s approach to debt collection is a barrier for many people who want to go back to school and can’t get their official transcript or need that transcript to land a better-paying job. Like my daughter, many are poised to jump into new careers, with their lives ahead of them, but they are stopped by bad state policy.

And like a lot of our state’s laws and policies, the way Ohio collects student debt hits hardest the people who need the most help to get through college. The Policy Matters study showed that student debt collection in our state disproportionately impacts Ohioans at two-year colleges, which are more affordable than four-year schools and serve higher proportions of non-white students, as well as first-generation, part-time and older students.

The Ohio legislature has the chance to pass two common-sense bills that would provide a boost to Ohioans trying to pursue an education and strengthen our economy, especially now as we emerge from the coronavirus pandemic.

House Bill 595 would stop institutions of higher education from withholding official transcripts because of past-due debt. House Bill 597 would freeze the collection of student debt through the AG’s office during the state of emergency, setting interest rates to 0% to ensure students are not further burdened by the delay in collections.

These bills would help Ohio get students back to school and back to work, and help make Ohio and our communities stronger when we need it most.