As students prepare to return to campus, colleges in New England and across the country are figuring out how to spend a windfall of $69 billion in federal COVID-19 relief funds. More than half the public colleges in Massachusetts are using part of that money to cover millions in unpaid balances that students owe them.
A GBH News survey finds at least 17 of the state’s 29 public colleges have collectively wiped off their books nearly $20 million in student debt. Those schools include Massasoit Community College, Bunker Hill Community College, Worcester State and UMass Dartmouth. As of spring 2021, students at the 17 schools held a total of more than $130 million in institutional debt.
An unknown number of private schools in the state are doing the same thing, but it’s unclear how much they’re spending. The Association of Independent Colleges and Universities of Massachusetts says it’s not tracking how individual institutions are using their relief funds, but in an email, Brad Freeman, its vice president for government affairs, said “providing financial assistance for unpaid tuition and other balances is just one of the many avenues that colleges... are utilizing to provide financial relief to their students.”
Higher-ed researchers advocating for reducing student loan debt overall say using relief money to eliminate unpaid balances not only helps students, but also colleges, by shoring up enrollment — and securing money they might never otherwise collect from students.
Massasoit Community College in Brockton is using more than $2.3 million federal relief dollars to help more than 1,500 current students pay off their debt. Ray DiPasquale, Massasoit’s new president, said the financial move is recouping revenue and helping retain students. A few weeks ago, enrollment was projected to fall by 15%, but now looks to be down just 5% at Massasoit.
“By eliminating the debt, they’re coming back to college without worrying about that debt hanging over their heads,” DiPasquale said.
Those with outstanding debts face punitive measures, explained Rachel Fishman who researches financial aid policies and promotes access to higher ed with the left-leaning think tank New America.
“It is a good thing, at the end of the day, to see some of those debts go away,” Fishman said.
Fishman pointed out most colleges using federal funds to cover student debt are at the same time withholding transcripts for relatively small outstanding balances. “Once those debts get turned over to state collections agencies, things can get even more punitive for students,” she said.
She recommended colleges ban transcript holds and use this historic influx of federal dollars to do more than retain students in a way that also “backfills their pockets.”
“It's the institutions that are the ones that are punishing the students for these debts, and now they have these dollars and they're like, ‘Look, we were able to forgive your debt!’" she noted. "Perhaps they shouldn't have been so punitive in the first place when it came to those debts."
A new report by the research firm Ithaka S+R points to stranded credits — credits that cannot be accessed because of unpaid debts — as an issue skewed by race and socioeconomic status, exacerbating existing inequities.
With increased attention to this issue following stories by GBH News and The Hechinger Report, practices are beginning to change — slowly.
The City University of New York announced this month the school will stop holding the transcripts of students and graduates with debt. Administrators said CUNY will also remove registration holds from the accounts of about 74,000 current students enrolled during the pandemic who have outstanding balances.
In March, as one GBH News story was about to broadcast, Bunker Hill Community College said it would drop its policy. In June, Roxbury Community College’s board of trustees approved a new policy that transcripts will no longer be held because of unpaid student account balances. UMass Boston has increased the threshold for holding transcripts, and other public colleges in Massachusetts are now reviewing their policies, including Massasoit.
“We’re definitely considering changing it,” DiPasquale said, explaining that the community college currently blocks students who owe any amount of money from accessing their academic record and re-enrolling.
“There’s a fiduciary responsibility of collecting money,” he said. “The key here is working with students and saying that ‘yeah, this transcript is important to you but let’s work out a way that we can help you pay that off.”
As for criticism that colleges are backfilling their pockets, DiPasquale doesn’t object.
“It’s exactly what we’re doing,” he said. “That’s a correct assumption. The money is coming back because it’s revenue that we would’ve lost.”
Public colleges in Massachusetts have paid themselves at least $18.6 million out of federal relief funds to cover student debts.
Besides Massasoit, Bunker Hill ($351,000), Worcester State ($483,501) and UMass Dartmouth ($986,030), the other state colleges that have wiped out student debt are: UMass Lowell ($133,000); Berkshire Community College ($224,550); Bristol Community College ($307,119); Mount Wachusett Community College ($501,928); Bridgewater State University ($702,965); Northern Essex Community College ($880,000); North Shore Community College ($888,170); Fitchburg State University ($889,137); Holyoke Community College ($957,089); Massachusetts College of Art & Design ($1,075,000); UMass Boston ($1,149,848); Quinsigamond Community College ($2,500,000); and Middlesex Community College ($4,300,000).
Diane Adame contributed to this report.
