I’m Goldie Blumenstyk, a senior writer at The Chronicle covering innovation in and around academe. As the Covid-19 crisis continues, here’s what I’m thinking about this week.

What to do about the debt that leaves students with “stranded credits.”

Student debt is in the news this week. Firstly, that’s because the Institute for College Access & Success (Ticas) has just released its annual report on what college graduates owe in student debt. The latest: 62 percent of college seniors who graduated from public and private nonprofit colleges in 2019 had student-loan debt averaging $28,950, slightly lower than the previous year. Still, the rise in graduates’ student-debt burden has far outpaced inflation over the 15 years Ticas has been tracking it.

My focus, though, is on another report released this week. It examines the “particularly insidious but understudied” student debt that affects thousands of institutions and prevents millions of students — many of them now working adults — from returning to college. The report, “Solving Stranded Credits,” by the consultancy Ithaka S+R, estimates that 6.6 million former college students have earned academic credits they can’t use to complete or further their education. That’s because they have an unpaid balance at a college that is holding their transcript as collateral. That’s not good for colleges either: Over the three years studied, those balances have collectively left them about $15 billion in the hole.

Society, too, loses out.

To solve a problem it helps to have a name for it, and this report provides that and also defines the scope. Until now, both of those pieces had been missing.

This is also a bit of a personal milestone. According to Catharine (Cappy) Bond Hill, Ithaka S+R’s managing director, the report is the direct result of a discussion that began in a session I hosted at SXSW EDU in 2018 with Hadass Sheffer, an adult-student advocate. We talked about the barriers to returning to college I’d just described in my report “The Adult Student.” Hill was there and connected with Sheffer, which ultimately prompted Ithaka to tackle the issue from a policy perspective. (Yeah, things don’t always move that fast in higher-ed wonk world, but hey, I’ll count this as progress.)

The term “stranded credits” came up during that SXSW EDU session, Hill thinks, though neither of us remembers who might have said it. In any case, it’s catchier than “transcript holds.”

Resolving $25 balances and returning sunk costs.

The whole report is worth reading, but a few points especially struck me, most notably the absence of good data. To estimate the scope of the problem, Ithaka S+R used surveys from the National Association of College and University Business Officers (existing) and the American Association of Collegiate Registrars and Admissions Officers (commissioned), but the report doesn’t — couldn’t — estimate the number of stranded credits. Only 8 percent of institutions could determine the average per student.

Still, the report does illuminate the scale of the problem — total debts of $5 billion to $6 billion a year — and some potential remedies. Its finding that the average unpaid balance is around $2,300 shows the need for new policy approaches or debt-relief mechanisms, because many people (even more so now) can’t afford to pay that off all at once. The estimated average unpaid debt at community colleges is much smaller — $631 — so solutions in that sector might differ.

Colleges have long worried about the “moral hazard” of forgiving some students’ debts. Today, especially, colleges could also use the money, as many are facing lower enrollments and higher expenses because of the pandemic. That said, I was surprised to find that almost two-thirds of colleges surveyed can withhold transcripts for an unpaid bill of as little as $25. Seriously? Is it worth deterring a returning student for that?

The report doesn’t specify how many students are affected by holds for debts that small. In a follow-up report, Ithaka S+R plans to examine the costs and benefits of raising those minimums. Foundation funding — $75,000 from Lumina and $45,000 from Joyce — supports both reports.

The forthcoming recommendations (early 2021) will probably go beyond what’s already on the scene, like Wayne State University’s Warrior Way Back program, which offers debt forgiveness of up to $1,500 over three semesters to its former students who decide to re-enroll. That’s important because oftentimes returning students may be better served by a different institution. A debt-forgiveness reciprocity agreement among Wayne State, Oakland University, and Henry Ford College is a promising model.

To better serve returning students, some existing barriers to credit transfer would also have to fall. That issue has been getting more attention in recent years, and given the pandemic, recession, and the coming demographic cliff, colleges may become more flexible about accepting credits earned elsewhere. “Colleges will be looking for students,” Hill said. “Colleges should be looking for students.”

Broader solutions are likely to involve outside entities: states, systems, maybe local philanthropies or community groups. I would tap into all of those resources. After all, students aren’t the only ones who benefit if they complete their degrees. As the report notes, for public institutions: “Resolving stranded credits would help states get a better return on their sunk costs in students who drop out before earning their degree.” Similarly, cities, regions, and states stand to benefit from more college graduates in the economy.

There’s also the matter of pure fairness. Former students may have fully paid for some credits, but so long as they have a balance, they can’t get a transcript. “It’s kind of a cartel,” Hill said. But maybe not for long.

A few final thoughts.

In some states, it’s not too late to register to vote. So I’m recommending this story by my colleague Danielle McLean on how colleges can get creative in helping students to register and vote, along with the site here offering some nuts and bolts. And a reminder to college leaders: it’s not only nice to make a good-faith effort to encourage students to register, it’s the law.

Wearing face masks, however, isn’t the law of the land. But notwithstanding the news out of the White House, the basics of biology and physics still apply — and can save lives. Let’s not be fools. Wherever basic common sense suggests it, please, please mask up.

Got a tip you’d like to share or a question you’d like me to answer? Let me know at goldie@chronicle.com. If you have been forwarded this newsletter and would like to see past issues, find them here. To receive your own copy, free, register here. If you want to follow me on Twitter, @GoldieStandard is my handle.

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