Is the state of Kentucky — really any state, for that matter — violating due process by employing a state-run collection operation that can garnish wages and impose liens without a court order, a step required by regular collection agencies?
That is the question before the Kentucky Supreme Court, which is hearing arguments in a case filed by individuals against the University of Kentucky, which uses the state’s Department of Revenue to collect on unpaid debts from students, including healthcare debts and unpaid tuition. A Kentucky County judge in February ordered the university to stop sending accounts to the state, a decision which the university has appealed.
A number of other public universities in the state have filed amicus briefs in support of the University of Kentucky. During the past decade, for example, the amount of the budget for Morehead State University that is covered by tuition dollars has doubled, largely due to funding cuts. Going after unpaid debts, the universities argue, is essential to their survival.
The schools have placed $80 million in unpaid debts with the state’s Department of Revenue and received about $45 million back. The department claims a 25% commission on anything it collects.
One UK student complaint that while he was disputing a debt over unpaid tuition, he received a notification that the debt had been placed with the Department of Revenue, which threatened to garnish his wages.
“It’s really sad that a private citizen should have to hire a lawyer and defend themselves against their own state government’s opportunistic contracting out of the mechanisms it created to go after those who owe huge amounts of unpaid taxes, and for private debts that haven’t received any sort of judgment whatsoever,” he said. “How many UK students struggling to get their life started will just start out feeling the full force of a state agency doing its best to crush them?”
The County Judge ruled that universities can not place debts with the state because they are not part of the state’s executive branch of the government.
