In October 2020, Ithaka S+R estimated that 6.6 million people in the US owe a debt to a college or university they previously attended, and because of that, cannot access their transcripts or credentials. This insidious and understudied form of student debt not only saddles individuals with collections, credit rating issues, and other typical consequences of debt, but also prevents them from using credits and credentials they’ve earned to continue their education or land a job that would help them pay down the debt. 

Since our initial report and with the benefit of other advocacy, the issue of stranded credits has captured the attention of the media, states, and the federal government, leading to a growing number of institutions to either ending their transcript withholding policies or using donations or federal recovery funds to pay down some students’ institutional debt.   

While these efforts are to be applauded, what has sometimes gotten lost in the rush to address the issue of stranded credits is how those affected by it–who are disproportionately students of color and from lower socioeconomic backgrounds–perceive the burden they bear and the potential solutions to it. Elevating and understanding these perspectives are necessary to truly solve stranded credits.

In a new brief for Ithaka S+R, with support from Lumina Foundation, Howard University education professor Dr. Sosanya Jones and graduate student Melody Andrews (also a former Ithaka S+R intern) use an innovative social media outreach strategy to gather and amplify the voices of dozens of individuals across the country who either have stranded credits or work with those who do. Analyzing the information shared by these individuals, they reveal new insights on the causes of institutional debt, the challenges faced by individuals with stranded credits, the ways that stranded credits exacerbate existing inequities, the value of debt relief and other strategies, as well as some of the complications of those strategies.

Some of the brief’s key findings include:

  • Stranded credits disproportionately affect students of color and those from low socioeconomic backgrounds.
  • Stranded credits impact students’ academic and career trajectories, can mean the difference between stopping out and dropping out, affect financial aid eligibility, and have a detrimental impact on students’ psychological well being.
  • Stranded credits prevent students from taking advantage of the financial and career opportunities that could help settle their institutional debt.
  • Institutional bureaucracy sometimes contributes to the accumulation of institutional debt, particularly for first generation students who are unfamiliar with how to navigate the collegiate environment.
  • Because there are restrictions on the use of federal aid and very few financing options, students usually have to settle their outstanding debt with personal funding. 
  • Payment plans to settle institutional debt are not necessarily helpful for students who are experiencing financial instability. 
  • Debt relief programs offer students an opportunity to address their institutional debt while also continuing their matriculation.

Perhaps most importantly, Jones and Andrews explain why institutions need to be flexible and compassionate to help students resolve stranded credits, and why doing so not only benefits the students, but is in the institutions’ own interest, as well. 

How are you dealing with your own or your institutions’ stranded credits? Please share your experience in the comments.