A federal appeals court ruled yesterday that a university was obliged to provide a transcript to a student even though she had declared bankruptcy and so discharged a debt to the institution.

The case involves Stefanie Kim Kuehn, an art teacher who enrolled in a two-year master’s-degree program at Cardinal Stritch University, in Milwaukee, on a pay-as-you-go plan. Although Ms. Kuehn stopped paying her tuition partway through the first year, the university allowed her to continue, and to graduate owing more than $6,000 in tuition and fees.

Because Ms. Kuehn did not pay her bill, the university refused to give her a transcript. After she declared bankruptcy, the university still refused to give her the transcript unless she paid her tuition. A bankruptcy judge ruled that not giving a transcript was an attempt to collect a discharged debt, and a federal district court upheld that decision in 2007.

Yesterday a unanimous three-judge panel of the U.S. Court of Appeals for the Seventh Circuit affirmed the lower court’s ruling, saying that Ms. Kuehn may have a property right to the proof of her degree, which is essentially worthless without the university’s paperwork.

“The university is unable to collect Kuehn’s tuition only because it was careless,” the judges 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. Student loans are not dischargeable unless a debtor can show undue hardship.” —Eric Kelderman