Sabrina Morel was three semesters into her education at CUNY Borough of Manhattan Community College in New York City, with a goal of becoming a trauma surgeon. But in the spring of 2021, her plans came to a halt.
Morel’s college transcript was requested when she applied for an apartment. That’s when she learned that it was on hold because of nearly $5,000 in outstanding fees. Morel would not be able to re-enroll or finish school until the debt was paid off.
“It’s a difficult situation having to pay thousands of dollars plus trying to support yourself,” Morel says. “Having that stop on your transcript is devastating. It puts a hold on your dreams.”
[READ: Is College Worth the Cost? Factors to Consider.]
What Is a Transcript Hold?
Many colleges maintain policies that require holds on transcripts or degrees for current and former students with outstanding institutional debt, resulting in students being unable to access their earned credits to register for classes, graduate or re-enroll, experts say. So-called “stranded credits” affect about 6.6 million students who owe U.S. colleges an estimated $15 billion in unpaid balances, according to a 2020 research report by Ithaka S+R, a research arm of a New York-based not-for-profit organization that promotes innovation in higher education.
That debt can refer not only to unpaid tuition or room and board, but also expenses unrelated to courses, such as unpaid parking tickets and library fees. And the outstanding debt often incurs interest. What started as a $50 parking ticket, for example, can increase by hundreds of dollars if left unresolved.
“To think that a higher education institution, which stands for trying to help people get degrees, would actually be limiting the number of degrees over sometimes relatively trivial costs,” says William F. L. Moses, managing director for The Kresge Foundation’s Education Program.
Often, students who leave school without graduating and owe the institution money are unaware of the hold on their transcripts until years later, such as when the individual requests an official transcript for a job or the debt shows up on a credit report, experts say.
Holds on transcripts can also result in lost credits for students looking to re-enroll at a different institution. For example, if a student accumulated a year and a half of credits at his or her initial institution but owed money, those credits cannot be accessed until the debt is paid off.
“If they can’t pay back that initial institution but want to pursue more education, they have to start over and all of those credits are lost,” says Catharine Bond Hill, managing director of Ithaka S+R. “It makes it more expensive and takes a longer time to get the degree. So (stranded credits) hurt educational attainment.”
[Read: An Ultimate Guide to Understanding College Financial Aid.]
How to Prevent a Transcript Hold
Although taking out student loans or getting financial aid can be necessary for some students, the possible consequences and risks need to be better understood, according to Sosanya Jones, associate professor of educational leadership and policy studies at Howard University in Washington, D.C.
She recommends meeting with a financial aid counselor and building relationships with academic advisers. Counseling workshops allow students to ask questions about a variety of financial decisions, like taking out educational loans and the cost of withdrawing from a class.
“Institutions aren’t necessarily always user-friendly, as some of their processes and guidelines are confusing,” Jones says. “They’re not very transparent about how they’re doing business. Especially for students that are not used to a college environment and may not have anyone there helping them, they get really lost in the system.”
Resolving Transcript Holds
For students who find themselves with a transcript hold, the first step is to contact the school registrar’s office and explain the situation. In some cases, exceptions to school policy are made.
“When we understood why (students) needed their transcripts released, we were making exceptions and releasing their transcripts,” says Kim Bogle Jubinville, senior vice president and chief academic officer at Southern New Hampshire University. “Which is what led us to reevaluate our policy. I would infer that a number of institutions of higher education would be doing the same thing.”
Another option to overcome a transcript hold is to inquire about whether the withholding institution has a debt-relief program.
For example, Wayne State University in Michigan launched the Warrior Way Back program in 2018 to provide up to $1,500 in debt forgiveness for returning students. In January 2023, the university increased the debt threshold to $4,000. To qualify, students must hold at least a 2.0 GPA and have not taken classes at WSU for at least two years. The debt owed to WSU is canceled over four semesters or upon graduation, whichever is sooner.
The program supports adult learners like Carmelita Steele, who had nearly $1,000 in institutional debt relieved. Over the span of a few decades, she paused and restarted her education several times due to family responsibilities. But Steele was finally able to walk at graduation in May 2022.
Nearly 400 students have enrolled in the Warrior Way Back program, with 125 completing their degree, according to Wayne State.
“Wayne State has a very supportive program and they are one of the first to really stretch out and pull the students back in so that you can feel that you can be successful,” Steele says.
[Read: What Expenses You Should Cover With Student Loans.]
Bans on Transcript Holds
“Stranded credits is such an insidious, widespread problem and it’s gone on so long, unnoticed, because no one’s been really talking about it,” Jones says. “It’s just been taken for granted as a part of college life, that if you owe money, you just sit out. No one really questioned it, that’s just the way business was done.”
But now, states are beginning to take notice. In 2022, eight states had laws or regulations that prohibit transcript holds in certain situations: California, Colorado, Illinois, Maine, Minnesota, New York, Ohio and Washington.
However, many experts say these bans don’t get to the root of the problem.
“Anecdotally, I know that in some places where a ban exists, what the school will do is just not let students sit for exams if they owe a balance,” says Terri Taylor, strategy director for innovation and discovery at the Lumina Foundation, an Indiana-based organization that promotes educational access. “So they are technically not holding a transcript, but they are also not letting students complete those credits.”
Bond Hill says colleges not only need to eliminate their transcript hold policies, but also find a way to clear students’ institutional debt. Some schools, like The City University of New York, are doing just that.
In 2022, CUNY officially ended its policy of withholding official transcripts from students and graduates who had unpaid tuition balances and fees. That policy had been suspended in August 2021. Additionally, under the CUNY Comeback Program, which used federal COVID pandemic stimulus funds, $100 million in unpaid institutional debt was eradicated for at least 57,000 students and recent graduates.
Morell was one of those students notified about the canceled debt. Because of that, she was able to continue her education at CUNY.
“It was a huge weight lifted off my shoulders,” Morell says. “It really felt like someone heard me.”
A pilot program for the Ohio College Comeback Compact launched in fall 2022. It forgives up to $5,000 in institutional debt and releases transcripts for qualifying students who re-enroll at any of the eight participating colleges and universities in northeastern Ohio. To be eligible, prospective students must have previously attended a participating college, owe money to the institution and not have earned a degree.
“It ends up being a win-win-win for the students because they can get their debt canceled and finish their degree at one of the eight institutions,” Bond Hill says. “It’s good for the schools because they get students back, enrollment is up and tuition is up. And it’s great for the state because the state is trying to get its educational attainment rates up to have more skilled workers for employers.”
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What to Know About Stranded Credits originally appeared on usnews.com
Update 01/30/23: This story was published at an earlier date and has been updated with new information.
