This was the custom in Fairfield for years until a number of years ago when one administrator (who is no longer in Fairfield)  just decided to change it, even though it is a state statute. Consequently, many books are never returned and lots of $$ is lost.
See the following (unless it has changed)

This is from here http://www.cga.ct.gov/2011/pub/chap170.htm


      ( Sec. 10-221. Boards of education to prescribe rules, policies and procedures. (a) Boards of education shall prescribe rules for the management, studies, classification and discipline of the public schools and, subject to the control of the State Board of Education, the textbooks to be used; shall make rules for the control, within their respective jurisdictions, of school library media centers and approve the selection of books and other educational media therefor, and shall approve plans for public school buildings and superintend any high or graded school in the manner specified in this title.

      (b) Not later than July 1, 1985, each local and regional board of education shall develop, adopt and implement written policies concerning homework, attendance, promotion and retention. The Department of Education shall make available model policies and guidelines to assist local and regional boards of education in meeting the responsibilities enumerated in this subsection.

      (c) Boards of education may prescribe rules to impose sanctions against pupils who damage or fail to return textbooks, library materials or other educational materials. Said boards may charge pupils for such damaged or lost textbooks, library materials or other educational materials and may withhold grades, transcripts or report cards until the pupil pays for or returns the textbook, library book or other educational material.


> Date: Fri, 19 Jun 2015 10:13:46 -0400
> To: erin.baynes@winchesterschools.org
> From: meligio@northbranfordschools.org
> Subject: Re: [CASL-L] Holding report cards
> CC: casl-l@mylist.net
>
> Here in North Branford High School we hold diplomas on any Senior student
> who has outstanding charges on their account. Any Freshman, Sophomore, or
> Junior students who have outstanding fees will have them carried forward
> to the following year. Their report cards are not held.
>
> Michele Eligio
> Library Media Specialist
> North Branford High School
> 49 Caputo Road
> North Branford, CT 06471
> 203-484-1465
>
> “Libraries store the energy that fuels the imagination. They open up
> windows to the world and inspire us to explore and achieve, and contribute
> to improving our quality of life. Libraries change lives for the better.”
>  Sidney Sheldon
>
>
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