Summary:
In Williams v. Drexel University, Chief Judge Wendy Beetlestone allowed a former Drexel University student’s claims to proceed based on Drexel’s alleged use of academic records and access restrictions to collect unpaid tuition—including while the student was in a Chapter 13 bankruptcy.
The case is a useful reminder that a university wearing an academic cap does not necessarily stop being a creditor, and withholding a transcript can be debt collection just as surely as sending a collection letter.
From Graduate School to Chapter 13
Sheila Williams enrolled in Drexel’s Master of Science in Professional Studies program in 2018, under an installment payment arrangement requiring $7,590 per academic quarter. By early 2020, she had completed most of the 45 credits necessary for the degree and needed only three courses to finish.
After Williams missed a tuition payment, Drexel imposed late fees and refused to enroll her in additional classes. As COVID hit and Williams paused her studies to care for family members, Drexel allegedly assessed additional fees and locked her out of the student portal, preventing access to academic records, payment history, communications, and even her undergraduate transcript.
Then came bankruptcy.
Williams filed Chapter 13 in January 2021. Drexel, however, was not listed as a creditor, so the university initially lacked notice of the bankruptcy. Drexel continued assessing late fees, including $418.02 during February and March 2021, and Williams' Chapter 13 plan was confirmed in October 2021 without providing for Drexel.
Drexel eventually sued Williams in state court in December 2023 for $21,214.81 plus fees and costs. Once Williams notified Drexel's attorney of the bankruptcy, he promptly filed a Suggestion of Bankruptcy, halting the state-court case. Williams' Chapter 13 was ultimately dismissed in November 2024 for failure to make plan payments.
There was another wrinkle: Williams alleged that Drexel had discontinued her master's program in approximately 2021 or 2022—but did not tell her until August 2025.
Holding the Transcript Was Potentially an Ongoing FDCPA Violation
Perhaps the most interesting part of the decision is the court's treatment of Drexel's continuing refusal to provide Williams access to her transcripts and records.
The defendants argued that Williams' FDCPA claim was barred by its one-year statute of limitations because the collection lawsuit had been filed in December 2023.
But Williams wasn't complaining only about that lawsuit. She alleged false representations concerning the debt, collection of fees assessed during bankruptcy, harassment, and the continuing denial of access to her transcripts and student portal.
Judge Beetlestone held that:
“Denying access to transcripts and records as a mechanism to coerce debt repayment plausibly falls within Section 1692f’s prohibition on unfair collection practices.”
And critically, the court viewed that alleged violation as continuing into the present, making the FDCPA claim timely.
That is potentially quite useful for consumer attorneys. A creditor cannot necessarily turn an old collection practice into an untouchable one merely by continuing to do it long enough. Where the creditor continues withholding something in order to induce payment, the debtor may have a current collection claim—not merely a stale complaint about something that happened years earlier.
The Automatic Stay Applies to Transcript Holds Too
The bankruptcy ruling is equally important.
Once Drexel unquestionably learned of Williams' bankruptcy in December 2023, the university allegedly continued denying access to her undergraduate and graduate transcripts and student portal because of the unpaid balance.
Section 362(a)(6) prohibits “any act to collect, assess, or recover” a prepetition claim. And a willful stay violation does not require proof that the creditor specifically intended to violate bankruptcy law; knowledge of the bankruptcy coupled with the intentional act can suffice.
Relying on the Third Circuit's decision in In re Aleckna, 13 F.4th 337 (3d Cir. 2021), the court found that withholding records to pressure repayment can violate the automatic stay.
Drexel's alleged continuing embargo on Williams' transcripts and student portal after it knew about the Chapter 13 therefore fell “squarely” within § 362's prohibition against acts to collect a debt. And the coercive withholding of the records itself could constitute cognizable harm under § 362(k).
Commentary
Williams is still only a ruling on motions to dismiss. Williams has not proven her allegations, much less established damages. And because she failed to schedule Drexel as a creditor, the court sensibly focused the stay analysis on what happened after Drexel actually knew about the Chapter 13.
But that actually makes the decision more useful.
Once a university knows about a bankruptcy, it cannot necessarily separate its role as an educational institution from its role as a creditor. If access to a transcript, academic records, registration, or a student portal is withheld because the student owes money, that restriction may be a collection device.
And calling it an “academic hold” doesn't magically make the collection purpose disappear.
That is particularly significant when bankruptcy attorneys encounter clients whose education has effectively been held hostage by unpaid institutional debt. Williams, following Aleckna, provides substantial support for the proposition that using a transcript as leverage to force payment of a prepetition debt can violate the automatic stay.
The FDCPA portion adds another potentially powerful layer: if the withholding is being used as a continuing means of coercing payment, the collection activity itself may also be continuing—potentially defeating what otherwise would appear to be an obvious statute-of-limitations defense.
Williams' Chapter 13 ultimately failed, but that did not give Drexel a free pass for what allegedly occurred while the automatic stay was in effect. Bankruptcy protections apply while the case is pending, and creditors that knowingly use nontraditional leverage to collect debts during that period can still face consequences afterward.
For consumer bankruptcy attorneys, the practical lesson is simple: when a college or university refuses a debtor access to transcripts, records, enrollment, or online systems, don't assume that's merely an academic policy. Ask why. If the answer is “because you owe us money,” start looking at § 362—and perhaps the FDCPA.
To read a copy of the transcript, please see:
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