“For the past decade, prices have been going up, but the amount of funding students get has stayed flat, and that leaves a gap in their bills,” said Beth Todd, director of student accounts at SUNY Potsdam. “It’s also a question of financial literacy. Students who withdraw don’t always understand that after four weeks of classes, they’re on the hook for the whole bill.”
Putting aside the issue of whether the debt collection efforts of the attorney general’s office are fair to students, they appear to have had limited success. For example, in the year leading up to the pandemic, the total amount of student debt was $242.7 million. Only $11.8 million has been collected, according to data provided by the attorney general’s office.
The practice goes back nearly three decades, to a time when the state budget was under strain and efforts to collect debt were ramped up. In 1993, the state issued a regulation requiring all state agencies, including SUNY, to refer overdue debts to either a private collection agency or the attorney general’s office after 99 days.
SUNY then issued its own guidance, mandating the referral of debts between $500 and $9,999, owed after a semester, to a collection agency or the attorney general’s office. (Debts of $10,000 or more must be referred solely to the attorney general’s office.) The state can then choose to sue a student to recover the debt.
Like most universities, SUNY colleges will not release a student’s transcript or allow a student to re-enroll if a balance is overdue. Once a debt has been referred to the attorney general’s office, a student can no longer work with a campus financial aid counselor to find a solution. Administrators at some SUNY campuses use an alternative to legal action. Students at SUNY New Paltz, for example, are sued at a lower rate than those at some other colleges with enrollment of a similar size. About 75 New Paltz students have been sued since 2013, according to records obtained through a FOIL request.
The university manages to keep most of its collection efforts in-house, said Jeff Gant, vice president for enrollment management at New Paltz. The university uses a data alert system to find students who are behind on their bills and notify the student’s financial aid counselor and academic adviser, who then contact the student. The school also offers alumni-financed completion grants, usually between $1,000 and $5,000, to help students who are close to graduating but have run into financial hardship.
“Our focus is less about debt collection and more about trying to make sure students never get in that situation in the first place,” Mr. Gant said.