Bankrupt Student Is Entitled to a Transcript

(CN) - The 7th Circuit ordered Cardinal Stritch University to provide a graduate with a transcript of her grades, despite her $6,000 tuition debt, because the debt had been discharged in bankruptcy.

The federal appeals court in Chicago ended a standoff between the university and Stefanie Kim Kuehn, an art teacher who completed a two-year master's degree program at Cardinal Stritch University. Midway through her first year, Kuehn stopped paying tuition. But the university allowed her to keep enrolling in courses, taking tests and receiving grades. She eventually graduated, even though she owed more than $6,000 in tuition.

But the university was not willing to give her with a transcript of her grades, which Kuehn needed in order to get a raise from her school district.

She filed for bankruptcy and had the debt discharged, but the university still refused to provide her the transcript.

The university argued that it had no duty to provide a transcript, and that a passive "refusal to deal" isn't an attempt to collect a discharged debt.

However, the bankruptcy judge ordered the university to provide a transcript and pay the plaintiff's legal fees, a decision the district court affirmed.

A three-judge panel of the 7th Circuit agreed that Kuehn has an implicit property right to the transcript, and that the university's refusal to certify a transcript violated that right.

But Judge Easterbrook stressed that the court's holding won't bar universities from collecting tuition.

"The University is unable to collect Kuehn's tuition only because it was careless," Easterbrook wrote. "When Kuehn failed to pay her mounting bills the University could have refused to let her enroll in new classes. It could have refused to let her take exams. It could have refused to award a degree. Or the University could have required Kuehn to borrow from a third party to pay for her education.

"Presumably the University will protect itself in one or more of these ways in the future," Easterbrook opined.

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