For several years, federal policy makers have been battling intensely over whether colleges discriminate in their transfer of credit policies against students from institutions that are accredited not by one of the six regional accrediting agencies, but instead by what are known as "national" accreditors. National accreditors focus on specific types of institutions rather than on colleges in a region, and by and large they are newer and less established than the regional accreditors.

In that skirmishing, most of the attention focuses on for-profit colleges, both because a majority of the national accrediting agencies focus on for-profit career-related colleges and because those institutions are growing and politically muscular. But several of the national accreditors work with faith-based institutions, and they, too, complain that their students sometimes face discrimination when they try to transfer their academic work because the receiving colleges say they accept credit only from regionally accredited institutions.

Much of the discussion about potential harm done to institutions and students because of this type of discrimination is theoretical or anecdotal, because it typically affects individual students who, in the grand scheme of things, seem invisible. It is relatively rare, then, to find blatant, broad examples of discrimination on the basis of institutional accreditation.

Rare -- but not unheard of. And one is unfolding right now in Wisconsin, where state officials have (so far) decided not to let students at Northland International University receive grants designed to help Wisconsin residents afford public and private nonprofit colleges.

Northland International was, until last year, known as Northland Baptist Bible College, and it was not accredited -- and did not provide any government financial aid to its students -- until 2004. That year it sought and earned provisional accreditation from the Transnational Association of Christian Colleges and Schools, which accredits Christian universities, colleges and seminaries and is one of four accrediting agencies specializing in religious institutions that are recognized both by the U.S. Department of Education and the Council for Higher Education Accreditation (the others are the Association for Biblical Higher Education Commission on Accreditation, the Association of Advanced Rabbinical and Talmudic Schools Accreditation Commission, and the Commission on Accrediting of the Association of Theological Schools in the United States and Canada).

Being accredited by an agency that is recognized by the U.S. Department of Education is essential if a college wants its students to qualify for federal financial aid, as the government provides grants and loans only to students at such institutions. The federal government grants recognition to accreditors using a process in which a federal panel reviews their work every five years and makes recommendations to the education secretary, who rules thumbs up or down. Both types of accreditors, national and regional (and a third category, programmatic, but that's a story for another day) earn their recognition through the very same process, using the same standards.

Based on its accreditation by the Transnational association, which gave Northland International full status in 2008, the university began awarding federal aid to its students in fall 2004. Last year, Northland International sought aid for its students, too, through the state's Wisconsin Tuition Grant Program, which provides grants to Wisconsin residents attending independent nonprofit colleges in the state at least half time. As many as 80 students at the university could qualify for state grants, totaling somewhere in the neighborhood of $250,000, says Kevin Priest, Northland's registrar.

But when university administrators filled out the online application for the state Higher Educational Aids Board, which administers the program, they were rejected. When they appealed to the board's executive director, Connie Hutchison, they were told that Northland International did not qualify because it was nationally, not regionally, accredited.

Here's what perplexed Northland officials, Priest says: The state law on which the tuition grant program is based defines an "accredited" institution eligible for the grants as one "accredited by a nationally recognized accrediting agency or by the Board of Nursing...."

"Which we are," says Priest, since the Transnational Association of Christian Colleges and Schools has been recognized by the Education Department since 1991.

As university officials dug further into the situation, though, they found that the Higher Educational Aids Board appears, at some point in its history, to have adopted internal rules that interpreted the state law differently. Its Policies and Procedures Manual puts a twist on the state law, saying that to be eligible for Wisconsin student aid, a college "must be accredited through a federally accepted accrediting agency (HEAB recognizes the Higher Learning Commission of the North Central Association of Colleges and Schools)" (emphasis added).

Priest says Northland officials had been unable to ascertain when and how the state board had adopted policies that appear to conflict with the underlying statute, though he said university officials were left with the impression that "the interpretation was done innocently enough." (A 2005 report by the board on the prospect of making for-profit colleges eligible for the Tuition Grant Program -- which was strongly opposed by public and private nonprofit institutions -- made the same assertion.)

Administrators at the Higher Educational Aids Board offered no help; Sherrie Nelson, administrative policy adviser for the board, said in an e-mail message this week that the board's members had discussed the Northland situation at their meeting last week and decided to "table this issue until more information is attained."

If Wisconsin officials ask around, they're likely to find that their policy is out of step with the prevailing winds nationally. Not only have the Council for Higher Education Accreditation and most leading higher education associations endorsed the idea that colleges should not base their determinations on transfer of credit solely on accreditation status, but the accreditation council has told state leaders for several years (as in a letter sent this spring) that they should provide equitable treatment to any accreditor recognized by either the Education Department or by CHEA itself.

If the board changes its stance when it meets later this fall, it will be too late for Northland's students this year, since the state already knows that more students qualify for grants than Wisconsin has money to meet the need. But "it sure would help some of our students," says Priest, "making it possible for some who are having to sit out and work perhaps to be able to come, or those who are going into debt not have to do so as much."