SENATE HIGHER EDUCATION COMMITTEE

STATEMENT TO

[Second Reprint]

ASSEMBLY, No. 4254

STATE OF NEW JERSEY

DATED:  FEBRUARY 10, 2025

The Senate Higher Education Committee favorably reports Assembly Bill No. 4254 (2R).

      This bill establishes conditions under which an institution of higher education or proprietary institution licensed to offer academic degrees may refuse to release a transcript to a student who has an outstanding account balance at the institution.   

     Under the bill, if a student requests a transcript an institution cannot, due to an outstanding balance on a student’s account of $2,000 or less of non-mandatory charges: 

     (1)  refuse to provide a transcript for a student on the grounds that the student owes a debt;

     (2)  condition the provision of a transcript on the payment of a debt, other than a fee charged to provide the transcript;

     (3)  charge a higher fee for obtaining a transcript, or provide less favorable treatment of a transcript request because a student owes a debt; or

     (4)  use transcript issuance as a tool for debt collection.

The above restrictions only apply to students whose credits in a specified payment period were not paid for using federal student aid or funds distributed through any State student financial aid program administered by the Higher Education Student Assistance Authority (HESAA).

     The bill further provides that an institution may condition the provision of a transcript to a student whose credits in a specified payment period were not paid for using federal student aid or funds distributed through any State student financial aid program on the student’s agreement to enter into a good faith repayment plan and submission of the first payment on that plan if the student owes the institution:

     (1) any amount for unpaid tuition, room and board, or other mandatory student fees or charges; or

     (2)  an amount exceeding $2,000 for non-mandatory charges. 

     Under the bill, an institution cannot restrict or condition the provision of a transcript to a student whose credits in a specified payment period were not paid for using federal student aid or funds distributed through any State student financial aid program who attests that the transcript is needed to apply for new student loans or to refinance existing student loans. 

      The bill requires an institution to provide an official transcript to a current or former student upon the student’s request for all applicable payment periods in which the current or former student’s credits were paid for using federal student aid or funds distributed through any State student financial aid program administered by HESAA and the student’s institutional charges incurred for the payment period were paid for or included in an agreement to pay at the time of the current or former student’s request for an official transcript.

      The bill provides that an institution cannot withhold official transcripts from a current or former student or take any other adverse action against a student related to debts of the student that resulted from an error in the institution’s administration of federal student aid or any fraud or misconduct by the institution or an employee of the institution.

      Under the bill, a student may permit a transcript be released to a third party entity.  The bill requires an institution to post its policies concerning transcript release.  The bill provides that its provisions are not to apply to the release of transcripts to students who reside outside of the United States.

      The bill also provides that a violation by an institution of the bill’s requirements is to constitute an unlawful practice under the New Jersey Consumer Fraud Act, and is to be subject to all remedies and penalties available under the provisions of that act.

      Finally, the bill stipulates that receipt of a transcript by a current or former student under the bill is not to be construed to forgive any debt owed by the student to an institution and does not preclude the institution from taking any action permitted by law to recoup the student’s outstanding debt or withholding the diploma of a student with outstanding debt.

      As reported by the committee, Assembly Bill No. 4254 (2R) is identical to Senate Bill No. 3280, which was amended and reported by the committee on this date.