ByHouse Appropriations (originally sponsored by Representatives Slatter, Leavitt, Ortiz-Self, Valdez, Bergquist, Davis, J. Johnson, Pollet, Goodman, Lekanoff, Ormsby, and Riccelli; by request of Lieutenant Governor)

AN ACT Relating to prohibiting the practice of transcript withholding and limiting the practice of registration holds at institutions of higher education as debt collection practices; amending RCW 28B.10.293; and adding a new section to chapter 28B.10 RCW.

Sec. 1. RCW 28B.10.293 and 1977 ex.s. c 18 s 1 are each amended to read as follows:

((Each state public or private))(1) Institutions of higher education may, in the control and collection of any debt or claim due owing to it, impose reasonable financing and late charges, as well as reasonable costs and expenses incurred in the collection of such debts, if provided for in the note or agreement signed by the debtor.

(2) Institutions of higher education may only withhold a student's official transcript for the purpose of collecting debts relating to the nonpayment of tuition fees or fees charged to provide the official transcript.

(3) An institution may not withhold a student's official transcript, regardless of debt, if the official transcript is requested by a student or entity for any of the following purposes:

(4) An institution of higher education must release a student's official transcript if the institution assigns the student's unpaid debt to a collection agency, regardless of the type of debt.

(5) Institutions of higher education may not withhold registration privileges as a debt collection tool, excluding the case of any debts related to the following:

(b) Unpaid room and board fees, meaning any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student for the provision of contractually agreed to on-campus housing or meal services plans; or

(c) Any financial aid funds owed to the institution under Title IV, or to the state, due to miscalculation, withdrawal, misinformation, or other reason, not including standard repayment of student loans.

(6) If an institution of higher education chooses to withhold official transcripts or registration privileges as a tool for debt collection, the institution shall disclose to students through email and the class registration process the following at the start of each academic term:

(a) The amount of debt, if any, owed by the students to the institution;

(b) Information on payment of the debt, including who to contact to set up a payment plan; and

(a) "Debt" means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student.

(b) "Institutions of higher education" means the same as in RCW 28B.92.030.

(c) "Tuition fees" means tuition fees as defined in RCW 28B.15.020, services and activities fees as defined in RCW 28B.15.041, technology fees as defined in RCW 28B.15.051, and fees charged for nonstate funded, fee-based, self-supporting degree, certificate, or continuing education courses.

NEW SECTION. Sec. 2. A new section is added to chapter 28B.10 RCW to read as follows:

(1) Institutions of higher education shall report to the governor and the higher education committees of the legislature in accordance with RCW 43.01.036 annually beginning on December 1, 2020, on transcript and registration holds used as debt collection tools, including:

(a) Each institution's policy on when transcript and registration holds are used, including the time frames and amounts for which holds are to be used and the lowest amount for which an institution assigns a debt to a third-party collection agency;

(b) The actual lowest amount of debt for which an institution withholds official transcripts and registration privileges;

(d) The categories of debt for which transcripts and registration privileges were withheld, including the average amount of debt for each category;

(e) The average past-due time period for debts in which transcripts and registration privileges were withheld;

(f) The number of past-due accounts assigned to third-party collection agencies; and

(g) The actual lowest amount for which an institution assigns a debt to a third-party collection agency.