The 5 ways colleges can help students with stranded credits

Howard University professor says the practice of holds needs to undergo a ‘cost-benefit analysis.’
Sosanya Jones

Are the stiff penalties for student balances that result in stranded credits worth the fight for colleges and universities?

That may be difficult to quantify, says Sosanya Jones, associate professor of educational leadership and policy studies at Howard University, given the dearth of evidence and the fact that holds haven’t prevented $15 billion from being owed to institutions.

“There isn’t a lot of empirical data that points to this being worth the revenue [institutions] are generating,” she says. “Someone needs to sit down, even if it’s on a case-by-case basis at different colleges, to see how much revenue it brings in vs. the amount that they’d be bringing in if they produced alumni who had positive experiences with the college. There needs to be some cost-benefit analysis.”

Nearly every institution in the country—95% from an Ithaka S+R study in 2020—employs placing holds on registrations and transcripts for those who are indebted. The process of collections, a tactic to generate revenue on some campuses that is not unfounded, nonetheless might be hurting institutions longer-term. Though they may not have heard of the term “stranded credits,” students have been expressing their frustrations over the phenomenon, especially since the start of the COVID-19 pandemic.

“In digging into social media, we found hundreds of tweets and Reddit posts about this issue,” Jones says of a second qualitative study done for Ithaka S+R released in mid-August that she and fellow Howard doctoral student Melody Andrews conducted with students. “People were saying, ‘Can someone help me? I don’t know what to do. I can’t go back to school. I can’t transfer. I can’t get a scholarship. I can’t interview for a job because I owe. And they’re withholding my transcript and withholding my degree.’ Several students said the participating institutions didn’t even want to sit down to work out a payment plan. There’s not a lot of flexibility or even openness from institutions.”

Some holds are the result of significant balances owed, but they are also for sums as little as $25, or the cost of a parking fine. Of the more than 6 million individuals who’ve been caught up in the battle over balances, many are students of color, first-generation students or those who have hardships. Colleges and universities wedded to those holds without offering help have put former students in precarious predicaments … and could be stunting their own retention and completion percentages.

“[Stranded credits] can mean the difference between students stopping out for a semester and totally dropping out and giving up on higher ed, depending on how much debt they have,” Jones says. “If there’s a death in the family or divorce or pregnancy, for some students it may rattle them and maybe they sit a semester out. But we found that for students who were suffering with stranded credits, it exacerbated their financial instability to the point where they were forced to withdraw completely from school and look at other options. Once they had one roadblock, it just created 10 more.”

What do students think?

For their study, Jones and Andrews conducted interviews with 13 individuals who described their experiences facing hurdles to overcome stranded credit situations (which leaves students with no official proof of courses taken or credentials earned, and only one any path to return). The Howard researchers also pored over conversations across social media platforms among other students.

They found that among the monies owed, some students were surprised when gifts they had received turned into payments.

“Students were accruing debt, even on things that they didn’t necessarily have a loan for,” Jones says. “Students had library fines and parking fines. And even though they had Pell Grants, because of the way the institution distributed them, if they withdrew from a class, the Pell Grant suddenly became a loan. They felt isolated. They didn’t know where to turn.”

Credit some institutions for stepping in and helping. For example, the City University of New York and Southern New Hampshire University have absorbed some of those balances, worked on payment plans with students or allowed them access to transcripts, even if they have been behind on payments. Some of the most understanding institutions during the crisis have been those that can least afford to lose revenue but feel an obligation to help.

“We have around 28 HBCUs that have forgiven all this debt,” Jones says of Historically Black Colleges and Universities’ penchant to give back to students during the pandemic. “There are a growing amount of institutions that are recognizing, maybe because of some of the press exposure, that it’s just a moral issue. You’re disproportionally holding students who don’t have the means and have already earned the credit  to not even allow them to transfer?”

The holds and lack of flexibility were highlighted throughout the report, as students sounded off on the stranded credit process.

“The students left with a very negative impression of what his college was about,” Jones says. “Students want to pay this debt. They don’t want a free ride. They feel like they are responsible partly for the debt, but they want more flexibility and they want more empathy. You wonder how that affects the likelihood of a re-enrolling even if they did get the debt settled … and how [students] are communicating this with other people in their community.”

That negative publicity could be a linchpin for change. No matter how valid the charges, their worth may need to be scrutinized more closely by colleges and universities.

“You have a conflict here,” Jones says. “Institutions are going to have to do some soul searching about what to do,” Jones says. “Is the aim to generate revenue, or do they want to actually help students matriculate?”

In their study, Jones and Andrews suggest five potential options for colleges and universities to smartly address student balances:

  1. Working with students on payment plans or debt relief. “Even if institutions can meet them halfway and be more proactive about being preventative, that will make a world of difference,” Jones says. “Most of the students I talked with credited debt relief programs for getting them back into school after years of being shut out. [Colleges] either forgave the debt or they created a payment plan that was manageable for them.”
  2. Providing more robust education at orientation and in other on-campus initiatives to give students a better understanding of financial aid and institutional debt.
  3. Increasing professional development for advisors on the importance of helping students understand the implications of debt.
  4. Gathering stakeholders across campus to pinpoint students that need assistance, while promoting programs and resources that can help.
  5. Fostering positive dialogue with students who owe and working out manageable solutions that work for both parties.
Chris Burt
Chris Burt
Chris is a reporter and associate editor for University Business and District Administration magazines, covering the entirety of higher education and K-12 schools. Prior to coming to LRP, Chris had a distinguished career as a multifaceted editor, designer and reporter for some of the top newspapers and media outlets in the country, including the Palm Beach Post, Sun-Sentinel, Albany Times-Union and The Boston Globe. He is a graduate of Northeastern University.

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