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An estimated 6.6 million Americans have so-called stranded credits, which often prevents them from finishing a degree.

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The Ohio College Comeback Compact, a program designed to help students who did not complete college pay off debts owed to the institutions they attended, is showing promise. In the process, it is removing one of the most pernicious barriers to college completion, stranded credits, and helping students to re-enroll or transfer elsewhere and earn degrees.

The eight northeast Ohio institutions participating in the program forgave $135,000 in student balances during the pilot phase of the program last year. Of the students who re-enrolled, the outstanding balances of 66 percent were reduced, which allowed them to continue their education after holds placed on their accounts and academic transcripts were removed. (This sentence was corrected to clarify that the balances of the students were reduced, not fully erased.)

Programs like this are built on the simple premise that students can’t and won’t finish college if institutions freeze their accounts and transcripts, preventing them from taking classes at the institutions where they were enrolled or applying or transferring to another college. An estimated 95 percent of institutions withhold transcripts from students who owe a balance, according to research from Ithaka S+R, the higher education consulting firm that launched the program.

Efforts to address the problem are gaining in popularity as policies that allow the withholding of transcripts come under increasing scrutiny and criticism for being unnecessarily punitive and counterproductive to the values and mission of higher ed institutions.

“This population has an absolute barrier to returning to school,” said Martin Kurzweil, vice president for educational transformation at Ithaka S+R. The results of the pilot show that “this mechanism works,” he said. “It’s effectively removing this barrier of stranded credits that’s blocking these students from doing what they may otherwise do.”

The program is now entering its second year in northeast Ohio. Ithaka S+R has also received support from the Lumina, Kresge and Joyce Foundations to work on implementing and expanding it in Ohio and other states over the next two years.

The biggest problem the program’s facilitators encountered during the pilot was actually finding the people it was trying to help.

“One thing we realized during the pilot was that we really struggled to reach the eligible students,” Kurzweil said. “A lot of them had outdated contact information. Everyone was working really hard, but we didn’t have a sophisticated marketing approach to target different groups. And it was pretty burdensome for the institutions to manage all of that outreach and coaching.”

Those elusive potential students are among the approximately 6.6 million Americans with stranded credits, many of them people of color or those with limited financial means.

Stranded Credits

Not only do those institutional debts prevent students who can’t repay them from continuing their education, they also may be shutting them out of some job opportunities.

It is estimated that students with stranded credits owe $15.4 billion to their former institutions, according to research from Ithaka S+R. For an individual community college student, the average debt is about $631; at research institutions it’s an average of $4,393.

The Ohio program allows former students with stranded credits at one of the eight participating institutions to settle up to $5,000 in debt (if they meet certain criteria) and have their transcripts released on the condition that they re-enroll and complete coursework at any of the institutions in the consortium.

Cost-Sharing Model

The consortium concept is intended to fill the gaps of other programs targeting stranded credits and to share the cost of alleviating debt among the colleges.

Some states have banned transcript withholding (there’s also a federal proposal), but those don’t help address debt. Some individual institutions offer debt-forgiveness programs that allow students to re-enroll, but that can still leave many students with limited options, because the majority of students who stop out don’t end up re-enrolling at the same college they left. Experts attribute this to numerous things that can happen in the interim including moving, shifting educational goals and schedule changes.

At the same time, institutions can be reluctant to alleviate debts if former students may decide to attend another college anyway.

Having eight institutions in the Ohio program’s network gives students—and colleges—more breathing room. Students can choose to enroll at any of those colleges (not just the one they previously attended), and the institutions can share up to $750 to offset the cost for students who re-enroll at one of the other colleges.

According to Ithaka S+R, the participating colleges generated more than $200,000 in tuition dollars as a result of re-enrolling students who had stopped out—more than the $135,000 in debts they canceled. The research firm estimates that if they had attempted to collect that $135,000 instead, the colleges likely would have only recouped about $20,000.

“The collaborative nature of this is really important,” Kurzweil said. “It ends up being more than the sum of its parts when you have groups of institutions working on this.”

Lexi Anderson, development director for the Education Commission of the States, said the Ohio program shows that this model offers an effective pathway to help students complete their education.

“Individuals with stranded credits may often also hold a good deal of student debt. We know individuals with a postsecondary credential are more likely to outearn those without a credential,” Anderson said. “Programs like this are one avenue states can take to combat the college affordability barriers many students face.”

Students who re-enroll and complete a bachelor’s degree program see their annual income increase by an average of $1,121, according to an article published in the Economics of Education Review in 2022.

Outreach ‘Stymied’

Now that the program has demonstrated a financial benefit, its leaders are aiming to increase enrollment.

During its pilot last year, 156 of 9,109—roughly 1.7 percent—eligible former students re-enrolled at one of the colleges in the program. While that number may seem insignificant, it’s close to the national average of 2.1 adults with some college education but no degree who re-enrolled during the 2021–22 academic year, according to the National Student Clearinghouse Research Center.

“In the absence of the Compact, none of the 9,109 students would have been able to continue their education,” Ithaka S+R’s report on the pilot said. “The Compact enabled these students to enroll at close to the same rate as the general population of adults with some college and no credential.”

Last year, program advisers made 70,000 attempts using email, text message, phone calls and mailings to reach students with stranded credits who might be eligible for the program. But according to Ithaka S+R’s report, they “were often stymied by outdated contact information and limited targeting” and made contact with just 9 percent of eligible students. Of those students, 19.3 percent ended up re-enrolling.

The majority of those students who re-enrolled were students of color (62 percent) and Pell Grant recipients (78 percent), which previous research shows are demographics disproportionately affected by stranded credits compared to their peers.

“There is a huge need for this,” said Molly Burdette, assistant director of degree completion at Youngstown State University, which is one of the institutions in the consortium. “The biggest problem was contacting the students.”

Youngstown State last fall identified about 500 former students who met the criteria for the program.

“The students that we are able to get in touch with, so many of them think it’s a scam,” Burdette said. And if they did believe that they really could settle their debts and go back to school through the program, the timing was off for many of the potential students.

“We’re talking about students who have been out in the workforce, they have families—they’re not a traditional 22-year-old,” said Burdette, who didn’t get the list of potentially eligible students last year until a couple weeks before the academic year started. “That was just too quick for them to make this commitment.”

If students with stranded credits enroll and complete one semester at any of the colleges in the consortium, their former college will forgive up to $2,500 in debt. If they complete two semesters, a degree or certificate, students can get up to $5,000 forgiven. Once all the debt is settled (up to $5,000), the student’s transcript is released, freeing them up to continue pursuing their education.

‘Bumpy Start’

Four students enrolled through the program at Youngstown State last fall, and three of them completed the semester and had their debt forgiven.

“The numbers sound inconsequential,” Burdette said. But for the students who did it, “it’s a win-win-win … They are just thrilled because they’re getting out of this hole.” Burdette, who counsels and advises students interested in re-enrolling, said making sure they’re ready to commit to it is more important than recruiting as many as possible.

“If they drop out or fail, not only is their past amount due, but this current semester’s bill is due as well. It can get bad,” she said.

Once she connects with former students interested in re-enrolling, she has extensive conversations with them before they sign up for classes about how they’ll balance the financial and time commitments of going back to school with their existing responsibilities.

“If they’re not going to be successful right now, I tell them to wait until next semester. Get your ducks in a row.”

Burdette and the other advisers who helped launch the pilot were responsible for counseling potential students—and the ones who ended up re-enrolling—in addition to outreach and marketing.

“It was a bumpy start,” said Melanie Carr, manager of advising at Stark State College. “This is an add-on on top of my other job. Now, I have a caseload of students to work with, and that’s not something generally a person in my position would be doing.”

That meant the outreach was done en masse via the college’s texting platform.

“There was never going to be any individual phone calls that went out from our campus,” she said. “Community colleges are pretty lean at this point.”

Carr said last fall’s start-up was “quite difficult,” but 25 students had enrolled at Stark State through the program by the end of last school year.

The colleges in the consortium got some programmatic support from College Now Greater Cleveland, a local organization that helps students access college. But the organization didn’t have the marketing expertise to reach a high volume of students with stranded credits.

Targeted Marketing Showing Promise

That’s why Ithaka S+R has since contracted with ReUp Education, a company that solely focuses on helping higher education institutions reach the roughly 40 million Americans with some college but no degree.

“This is a really challenging audience to reach,” Scott Lomas, chief strategy officer for ReUp Education, said. “Without sophisticated marketing and data resources, it would be really challenging.”

The company has a database of around one million people who started but didn’t finish college, which allows it to gather more information about their individual obstacles—and craft a more tailored marketing strategy—before making contact.

“It’s just not as simple as reaching out with information about debt forgiveness or a new program,” Lomas said. “You’ve got to start by understanding where they are and what’s going on in their life. And help them understand that this is possible at all.”

Lomas said he couldn’t yet share exact enrollment numbers from this semester but that the early indicators have been “really strong.”

And that’s what the local advisers are also saying. Youngstown officials said 11 students have already enrolled through the program this fall. Stark State has 15 enrolled so far and 30 more “in the hopper,” said Carr.

“We’re all playing the game of how to get adult students back to college,” said Carr, who wants to see the program continue beyond this year. “This is a way to get them back.”

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