Transfer Tax?

Alleging waste and a “transfer tax” in higher education, Peter P. Smith argues in the most recent Education Outlook that America should establish a “National, ‘Student-Facing’ Course Database and Transfer Information System” for postsecondary transfer students, and “Automate” the “Processing and Evaluation of Transfer Credits” in order to decrease the number of students who get sidetracked from graduating.

In addition to these two reforms, Smith also suggests that higher education should “Create agreements among Colleges that Streamline the Transfer Process,” “Improve the Management and Quality of Postsecondary Data for the Administration of Credit Transfers,” and “Create an Interstate Database of Current Course Equivalencies.”

“If we are to promote the economic well-being of the nation by raising completion rates and producing a twenty-first-century labor force, we must rethink the transfer system to better reflect the needs and circumstances of students,” writes Smith.

Smith outlined how he saw the course database as potentially benefiting transfer students. “Take, for instance, a student who has completed one of the basic prerequisites to a business degree, Accounting 1, but is interested in transferring to a different school,” he writes in the May American Enterprise Institute (AEI) publication. “Using a web-based national course atlas, the student could find and compare all Accounting 2 courses, look at their outcomes, determine his readiness by comparing the outcomes of the course he took with those of the receiving college, and even select a target college to which he wants to transfer.”

Arguably, easing the process by which students can transfer between postsecondary institutions increases market competition among education providers. “Today, postsecondary-education institutions, systems, and even some states are reluctant to address how academic-credit portability could be managed via methods outside of their control,” asserts Smith. “Doing so would require a commitment to designing programs and courses aligned with the reality of what students need as they compete for jobs.”

“Colleges and universities would have to accept less revenue from transferring students because increased program efficiencies and credit portability would reduce the transfer tax,” he argues.

Smith is the senior vice president of academic strategies and development for Kaplan Higher Education. “This Outlook has been adapted from the author’s new book, Harnessing America’s Wasted Talent: A New Ecology of Learning (Jossey-Bass, 2010),” states the publication.

The author, however, exaggerates the conclusiveness of a 2005 GAO report (pdf) which he repeatedly cites. “In 2005, the Government Accountability Office (GAO) released a study on college-credit transfers that indicted most current university practices,” Smith writes. “The report reveals not only that higher-education institutions actively frustrate easy transfer and conversion of academic credit, but also that the costs of sustaining this practice saddle students and taxpayers with an extraordinary financial burden” (emphasis added).

Actually, the 2005 report takes a somewhat different tone and outlines the multiplicity of efforts the universities and colleges had made at that time in order to ease the transfer process.  For example, “To save time, some institutions had developed databases to track previously approved courses in order to remove the need to reevaluate them,” it states.

In addition, “To improve access to baccalaureate programs for certain populations of minority students, the National Articulation and Transfer Network has facilitated transfer agreements between community colleges and minority- serving institutions across the country,” it states.

As of 2005, according to the GAO report, “More than 100 institutions in Texas participate in the state’s voluntary course numbering program, which provides a shared, uniform set of course designations for students and their advisers to use in determining both course equivalency and degree applicability of transfer credits on a statewide basis.”

The researchers also write that they can’t determine how much transfer inefficiencies cost the government. “The inability to transfer credits may result in longer enrollment, more tuition payments, and additional federal financial aid awards, but the full extent to which such results occur cannot be determined because institutions told us they do not collect specific data on students that are unable to transfer credit,” they write.

The GAO researchers later add that “The national data indicate that, on average, transfer graduates take about 10 more credits and 3 more months to complete their baccalaureate degree than nontransfer graduates.”

“However, transfer students could take longer to graduate for a variety of reasons that may or may not be related to their decision to transfer,” states the report (emphasis added).

“…Nonetheless, students taking additional credits as a result of being unable to transfer credits will likely have to pay additional tuition. Based on national averages, these tuition payments could range from about $150 per credit hour for students attending public institutions to about $520 for those attending private schools.”

Bethany Stotts is a staff writer at Accuracy in Academia.

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