Pilot program tries a ‘win-win-win’ approach to releasing stranded credits

All of Northeast Ohio’s eight public universities and community colleges are collaborating with the education nonprofit Ithaka S+R on a sustainable, coordinated approach to resolving students’ debt so they can access their transcripts and re-enroll.

According to Ithaka S+R, around 6.6 million U.S. students have so-called “stranded credits,” in which a former institution is withholding their transcript until the student settles an unpaid balance.

Related: Stranded credits stand between millions of former students and a college degree >

An estimated 95 percent of colleges and universities have a financial hold policy. Most holds are fleeting and ultimately resolved. But those that aren’t quickly addressed can become “a stop sign rather than a yield”—especially for first-generation students, those from low-income backgrounds, and students of color, all of whom are disproportionately affected by stranded credits, writes Terri Taylor, a strategy director at Lumina Foundation.

A solution for all stakeholders

Ithaka S+R notes that students, institutions, and communities all lose when students can’t access their credits to secure employment or degrees, when institutions’ collections process produces mere pennies on the dollar, and when communities lack credentialed workers. The new pilot is structured to produce “a win-win-win” instead.

Starting this month, Cleveland State University, Cuyahoga Community College, Kent State University, Lakeland Community College, Lorain County Community College, Stark State College, The University of Akron, and Youngstown State University will enter an “inter-institutional compact” under which:

  • The institutions will settle the debts and release the transcripts of former students who re-enroll at their original institution, or any of the participating colleges. The institutions already have active transfer pipelines and experience collaborating with each other.
  • Participating organizations will reach out to notify students of their eligibility and help them create a re-enrollment plan that advances their careers. Research has shown that many students with stranded credits are unsure how to resolve their debt.
  • Participating colleges and universities will periodically compensate each other as students enroll at locations other than their original institution. Those financial transactions will be less than the amount owed but more than the expected return from collections.

With support from Lumina Foundation, The Kresge Foundation, and The Joyce Foundation, the pilot initiative will start notifying students of the opportunity in the spring, seeking to re-enroll students through the compact starting in fall 2022. Ithaka S+R estimates that Northeast Ohio is home to around 60,000 people with stranded credits. Re-enrolling even a fraction of those students would bring significant tuition revenue for institutions.

Moreover, “if the pilot is successful, there is great potential to rapidly scale this compact to other institutions in Ohio and to replicate the effort in other states,” Ithaka S+R writes.

Taylor at Lumina suggests that other regions should take a cue from Ohio, which last spring explicitly encouraged its colleges and universities to collaborate on programs that help students resolve their debt and re-enroll.

Related: Rethinking transcript holds for students with outstanding balances >

She also calls on institutions to improve communication about transcript holds, so students understand that “holds are common and usually resolved with the institution’s help.” That messaging, Taylor writes, “can go a long way to help students see the situation as a temporary, solvable problem rather than an insurmountable barrier.”

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