N.Y. University System Makes Changes to Debt Collection Practices

The State University of New York system, a network of 64 campuses spread throughout New York state, is reviewing its debt collection practices, with an eye on no longer blocking students with unpaid debts from re-enrolling for classes, according to a published report.

SUNY’s board of trustees also decided not to withhold transcripts from graduates who had unpaid debts.

The moves come just a few months after the Attorney General of New York announced plans to overhaul how it collected unpaid student loan debts that were owed to the state by former SUNY students. That included reducing the collection fee from its current rate of 22% and ending the practice of filing lawsuits in State Supreme Court in Albany, N.Y., regardless of where the individual resides.

“I think this is overdue, quite frankly,” said Cary Staller, a SUNY trustee who introduced the resolution, according to the report. “This is the ending of some dark days for SUNY, and I think it’s a really good step.”

At the same time, state lawmakers are working to enact new laws aimed at protecting individuals with unpaid student loan debts. One such bill, for example, seeks to remove state-owned student loan debt from the definition of debt under New York finance law, which would change how unpaid tuition and fees were collected.

For companies in the accounts receivable management industry, a comment from a Carolina Rodriguez, the director of a consumer advocacy group that helps individuals with student loan debt should send a shiver up their spine while also illustrating the mindset of the people on the other side of this debate.

“No one,” she said, “should be making money off collecting student debt.”

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