Is your transcript being withheld because of student loans? Here’s what you can do.

Maurer Law LLC always offers a free evaluation of transcript cases and takes a dedicated number of pro bono transcript cases each month.  You can reach Maurer Law through our contact page.  

Having your official transcript withheld because of student loans can be a huge headache.  Without an official transcript, you can’t get the job or complete the degree you need.  And without the job or the degree, you can’t make the money to pay off your loans.

This Catch-22 is trapping more and more people.

In fact, the Ohio Attorney General’s collections unit has more than 300,000 active university accounts — that’s almost 3% of the entire population of Ohio.  And many of those collections can result in a withheld transcript.

Unfortunately under current law a university does have the right to withhold your transcript in many circumstances.  If you are caught in this situation, there are a few things you can do:

1. Talk to your employer or new school about accepting an unofficial transcript

Under federal education records law, you are entitled to an unofficial copy of your transcript, regardless of the status of your student loans.  Talk to your new employer or new university about accepting an unofficial transcript instead.  If they’ll accept it, make a written request for your unofficial transcript from your old registrar’s office, being sure to cite the Federal Education Rights and Privacy Act (FERPA) in your letter.

2. Negotiate a payment plan

Withholding the transcript is always at the discretion of the university.  There are no laws mandating that a university withhold a transcript.  As a result, some universities may be willing to release your transcript if you speak with them and enter into a payment plan on your loans.

3.  Consider bankruptcy 

If you are already considering bankruptcy, mention that your transcript is on hold when you speak with your bankruptcy attorney.  Because withholding a transcript is a method of debt collection, universities are generally not allowed to continue holding onto your transcript once you file a bankruptcy petition.

Of course, entering bankruptcy is a big decision and should not be entered into lightly.  A bankruptcy attorney can help you help you assess whether bankruptcy makes sense for your overall financial health.

Maurer Law LLC does not offer bankruptcy evaluations, so if you are considering this route, you may want to reach out to a bankruptcy attorney.

4.  Speak with an attorney

There may be other options for you to consider depending on your exact circumstances. Maurer Law LLC always offers a free evaluation of transcript cases and takes a dedicated number of pro bono transcript cases each month.  

DISCLAIMER: THIS BLOG POST IS NOT LEGAL ADVICE AND DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE READER AND MAURER LAW LLC.  SEEK LEGAL ADVICE IF YOU HAVE PARTICULAR QUESTIONS ABOUT YOUR STUDENT LOANS

In honor of Teacher Appreciation Day, some thoughts on teachers and student loan debt

Teachers are some of the lowest paid professionals in the country.   According to the National Education Association, the average starting salary for the 2016-2017 school year was $38,617.  In Ohio the average starting salary was even lower at $35,249.

At the same time, a focus on credentialing within teaching has lead to many teachers having to take on more and more debt to get advanced degrees.  According to a 2014 report authored by Jason Delisle when he was at the New America Foundation the average Masters of Education student has $8,879 more in debt than MBA graduates, coming in with an average loan debt of $50,879.

Yes, there are some specialized forgiveness programs for teachers.  One program covers FFEL and Direct Loans while Perkins loans have a separate loan forgiveness program.   Some teachers may be eligible for public service loan forgiveness.

These forgiveness programs don’t fix the problem that we are expecting teachers to take on too much debt for too little pay.  That’s why I support efforts to increase teacher pay and reign in the cost of tuition.

 

The Definitive Yale/Harvard/Stanford LRAP Comparison

I had the immense privilege of going to Stanford Law School.  When I began to be known among my friend group as knowledgable on student loans, I started to get requests for student loan consultations from other SLS alums as well as our peers at Harvard Law School and Yale Law School.  This has given me an on-the-ground insight into the three schools’ LRAP programs, which are an immense draw for students thinking of pursing a public interest career.

Understanding the different LRAP programs is fairly daunting for many admitted students and there is a lot of information to sort through.  This post aims to compare the most important issues that I see arise for alumni based on the current program implemented at each school (at Yale, for instance, the program may differ depending on your graduation year).  If you have other concerns about the LRAP programs, please let me know and I will supplement this post as best I can.

Of course, anybody in the position of choosing between these programs is already quite lucky.  Each one of these is substantially more generous than any other LRAP program out there.  As we get into the weeds, please keep in mind that I know having to compare these programs is a problem for only a few lucky people.

Eligible Employment

To enroll in LRAP at each school you must have full-time qualifying employment.  Qualifying jobs differ across the schools

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Stanford excludes academic jobs such as LRW positions from LRAP, whereas Yale and Harvard do not.  Clinical positions should qualify under all three plans.

Award amount

How much you will get under an LRAP program is a function of (1) your eligible loans; (2) the payment plan the school calculates for your eligible loans; and (3) your expected contribution.  We tackle each of these in turn.

(1) Eligible Loans

Generally speaking the three programs cover the following loans:

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(2) Payment Plan

How much money you get through LRAP depends on how much the school thinks you should have to pay every month.  Each school calculates this monthly payment amount a little bit differently.

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Because Harvard always bases its award on the plan you are actually enrolled in, if you are in a plan with a lower monthly amount than the 10-year standard, your award will decrease accordingly.  This can hurt alums who have to make a substantial contribution on their own.

Yale makes up its own numbers.  It artificially calculates a non-existent 15-year fixed repayment plan and gives you an award based on that monthly amount for the first 5 years.  In the second 5 years of the 10-year LRAP program, it calculates a 5-year repayment plan to pay off your remaining balance.  In other words, Yale’s award will most likely be quite a bit lower than either Harvard’s or Stanford’s for the first 5 years.

(3) Expected contribution

Once your school has calculated your expected monthly payment, the school then calculates how much it expects you to contribute.  Each school expects you to contribute a particular amount based on a percentage of your adjusted or gross income.  Here are the calculation tables according to each school’s program handbook:

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Which looks a little bit like this side-by-side:

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Harvard starts out expecting a much higher contribution.  Yale and Stanford start neck-and-neck, but then Yale’s program expects marginally less at higher income levels.

Your actual LRAP award will be the total expected amount minus your personal contribution.

Compensation for Tax Liability in the Private Sector 

One issue I see come up often is the effect of employment at a private-sector employer.  Alumni who do not work for a 501(c)(3) or the government will be taxed on the LRAP income their receive.  Stanford and Harvard try to offset this tax liability by increasing the award.  Yale does not.

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Transition between jobs

Luckily each program gives alums some grace period when transitioning between jobs. Harvard’s program is slightly less generous on this front, but all three programs offer some cushion.

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Clerkship Loans 

Many HLS/SLS/YLS students hoping to take advantage of LRAP programs may take 1-2 years to clerk and then hope to transition to public interest employment.  Harvard and Stanford prohibit using LRAP money to cover loans if a student is going to private-sector (i.e. firm) employment afterwards.  However, both will offer loans to students that will then be forgiven if the student goes from the clerkship to eligible public interest employment.

YLS alums can use their LRAP for clerkships, but the LRAP money is not actually forgiven.  Instead, that money is yet another loan that is added to the borrowers accumulated debt.  After the clerkship, if a YLS alum enters qualifying employment, the clerkship loan will be included in the debts to be paid off over the course of participation in the program.

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Spousal Income 

Last but not least, spousal income.  Stanford and Harvard have a straight forward approach.  They take greater of (a) his or her individual income; or (b) half the joint income.

Yale, on the other hand, will consider the joint income of the borrowers minus the spouse’s own education loan debt payments and minus $40,000.  This can hit borrowers whose spouses have higher incomes particularly hard.  (However, if both spouses are enrolled in LRAP, Yale consider’s half the joint income).

Conclusion

While I may be biased, I think the bottom line is that SLS has the best LRAP plan.

Harvard’s program expects a relatively high contribution early on and has less flexibility on repayment plans.

While Yale has an immense amount of employment flexibility, it does not provide the additional tax benefit to private-sector employees that SLS and HLS students get.  Additionally, Yale’s clerkship program and 15-year/5-year amortization schedule, clerkship loan program, and treatment of spousal income is not as generous as Stanford’s and hits young alumni particularly hard.