Transfer Students: Postsecondary Institutions Could Promote More 
Consistent Consideration of Coursework by Not Basing		 
Determinations on Accreditation (18-OCT-05, GAO-06-22). 	 
                                                                 
Each year thousands of students transfer from one postsecondary  
institution to another. The credit transfer process, to the	 
extent that it delays students' progress, can affect the	 
affordability of postsecondary education and the time it takes	 
students to graduate. Seeking information on the processes and	 
requirements that postsecondary institutions have in place to	 
assess requests to transfer academic credits, Congress asked GAO 
to examine (1) how postsecondary education institutions decide	 
which credits to accept for transfer, (2) how states and	 
accrediting agencies facilitate the credit transfer process, and 
(3) the implications for students and the federal government of  
students' inability to transfer credits.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-22						        
    ACCNO:   A39699						        
  TITLE:     Transfer Students: Postsecondary Institutions Could      
Promote More Consistent Consideration of Coursework by Not Basing
Determinations on Accreditation 				 
     DATE:   10/18/2005 
  SUBJECT:   Certification and accreditation			 
	     College students					 
	     Colleges and universities				 
	     Education or training costs			 
	     Educational standards				 
	     Federal legislation				 
	     Higher education					 
	     Institution accreditation				 
	     Standards evaluation				 
	     Student financial aid				 
	     College credits					 
	     Transfer students					 
	     Dept. of Education Title IV Program		 

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GAO-06-22

United States Government Accountability Office

GAO

                       Report to Congressional Requesters

October 2005

                                    TRANSFER
                                    STUDENTS

Postsecondary Institutions Could Promote More Consistent Consideration of
Coursework by Not Basing Determinations on Accreditation

GAO-06-22

[IMG]

October 2005

TRANSFER STUDENTS

  Postsecondary Institutions Could Promote More Consistent Consideration of
  Coursework by Not Basing Determinations on Accreditation

                                 What GAO Found

When deciding which credits to accept from transfer students, receiving
institutions consider the sending institution's type of accreditation,
whether academic transfer agreements with the institution exist, and the
comparability of coursework. However, institutions vary in how they
evaluate and apply a student's transferable credits. Many officials from
postsecondary institutions with regional accreditation told GAO that they
would not accept credits earned from nationally accredited institutions.
To streamline the transfer process, most institutions have transfer
agreements with other institutions that generally provide for the
acceptance of credits from the other institution without further
evaluation. In some instances, institutions review student credits-not
rejected for other reasons, such as accreditation-to determine
comparability to their academic offerings.

State legislation, statewide initiatives, and the accreditation standards
that accrediting agencies set help facilitate the transfer of academic
credits from one postsecondary institution to another. Among other things,
states support the establishment of statewide transfer agreements, common
core curricula, and common course numbering systems. Accrediting agencies
facilitate the transfer process through the standards they set. The
accrediting agencies that GAO reviewed generally adhere to the principle
that institutions should not accept or deny transfer credit exclusively on
the basis of a sending institution's type of accreditation.

Potential Outcomes for Students Seeking Transfer of Academic Credits

Source: GAO analysis and Art Explosion.

A student's inability to transfer credit may result in longer enrollment,
more tuition payments, and additional federal financial aid, but current
data do not allow GAO to quantify its effects on the students or the
federal government. Data are not available on the number of credits that
do not transfer, making it difficult to assess the actual costs associated
with nontransferable credits.

                 United States Government Accountability Office

  Contents

Letter

Results in Brief

Background

Institutions Consider Accreditation, Transfer Agreements, and Coursework
Equivalency when Making Credit Transfer Decisions, but Policies Vary

Some States and Accrediting Agencies Facilitate the Credit Transfer
Process

Students' Inability to Transfer Credits May Have Cost Implications, but
Financial Effects on Students and the Federal Government Are Unknown

Conclusions

                                       1

                                      3 4

                                       8

                                       15

                                     21 22

Appendix I Scope and Methodology

Appendix IIState Legislation Related to Transfer of Academic Credit

Appendix III Comments from the Department of Education

Appendix IV GAO Contacts and Staff Acknowledgments

Tables

Table 1: Information from Regional Accrediting Agencies on the Role of
Accreditation in Credit Transfer Decisions 20 Table 2 : Source and
Response Rate of GAO's Sampling of Education's IPEDS Database 25

Figures

Figure 1: Types of First-Time Transfers between 1995 and 2001 5

Figure 2: Percentage of Enrolled Postsecondary Students Enrolled in
Public, Private Nonprofit, and Private For-Profit Institutions
Participating in Title IV 7

Figure 3: Institutions Receiving Title IV Federal Financial Aid, by

Type 7 Figure 4: The Evaluation Process for Transfer Credits 14

Abbreviations

AACC American Association of Community Colleges AACRAO American
Association of Collegiate Registrars and

Admissions Officers BPS Beginning Postsecondary Students CCA Career
College Association CHEA Council for Higher Education Accreditation CSU
California State University FACT Florida Academic Counseling and Tracking
for Students HEA Higher Education Act IPEDS Integrated Postsecondary
Education Data System IHEP Institute for Higher Education Policy NATN
National Articulation and Transfer Network NCES National Center for
Education Statistics NELS National Educational Longitudinal Study SUNY
State University of New York UC University of California

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.

United States Government Accountability Office Washington, DC 20548

October 18, 2005

The Honorable Michael B. Enzi
Chairman
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable John A. Boehner
Chairman
Committee on Education and the Workforce
House of Representatives

The Honorable Howard P. "Buck" McKeon
Chairman
Subcommittee on 21st Century Competitiveness
Committee on Education and the Workforce
House of Representatives

Because thousands of students transfer each year from one postsecondary
institution to another, the credit transfer process, to the extent that it
delays students' progress, can affect the affordability of postsecondary
education and the time it takes students to graduate. As of 2001, 40
percent of students entering college in the 1995-1996 academic year
attended at least two institutions during the next 6 school years.
Annually,
the federal government invests billions of dollars-$21 billion in 2004-in
student financial aid under the Higher Education Act of 1965, as amended
(HEA). Because of the federal government's large investment in student
financial aid, it is in the best interest of taxpayers that transfer
students do
not unnecessarily repeat coursework, since such repetition could result in
additional financial aid awards.

Postsecondary institutions, state governments, and accrediting agencies
all play critical roles in the transfer process. As part of the transfer
process, receiving institutions must decide whether the credits of
incoming students are equivalent to those of their own course offerings.
States can influence the transfer process through legislation and
regulation, and accrediting agencies provide general guidelines regarding
the transfer of credit. Congress requires postsecondary institutions to be
accredited by an accrediting agency recognized by the Department of
Education (Education) before its students can become eligible for federal
financial aid.

In recent years, the ability of students to transfer credits has taken on
added importance because of increasing numbers of transfer students and
the changing nature of the types of institutions they attend. In general,
Education recognizes two main types of accrediting agencies-regional and
national. Regional accrediting agencies review institutions in a region of
the United States that includes at least three states that are reasonably
close to one another. National accrediting agencies review programs or
specialized institutions, such as acupuncture schools or private business
schools, on a national basis. In recent years, some nationally accredited
institutions have broadened their curricula to bring their course
offerings into line with those of traditional 4-year academic
institutions. Yet students from these types of institutions have
complained that they have been denied transfer credits on the basis of
accreditation.

As Congress considers the reauthorization of HEA, it has requested
information on the processes and requirements that postsecondary
institutions have in place to assess requests to transfer academic
credits. You asked us to provide information on the credit transfer
process, including how and when decisions are made to accept or reject
credits for transfer. Specifically in this report, we examined (1) how
postsecondary education institutions decide which credits to accept for
transfer, (2) how states and accrediting agencies facilitate the credit
transfer process, and (3) the implications for students and the federal
government of students' inability to transfer credits.

To answer these questions, we reviewed transfer of credit policies from a
nationally representative random sample of 2-year public and 4-year public
and private institutions. In addition, we conducted site visits in
California, Florida, Missouri, New Jersey, and New York, where we
interviewed officials from public, private nonprofit, and private
for-profit postsecondary institutions that were nationally and regionally
accredited. In order to get a broad perspective on the challenges that
students face when transferring credit, we selected states with large
transfer student populations and varying levels of involvement in the
credit transfer process. We also interviewed officials from state
education agencies regarding institutional transfer policies and state
initiatives to facilitate credit transfer. We also interviewed officials
from accrediting agencies and national experts on credit transfer.
Further, we reviewed state legislation and accrediting agencies' standards
concerning transfer of credits. Finally, we examined Education's databases
on postsecondary institutions. We reviewed documentation about the various
methodologies used to collect the data in the databases and conducted
interviews to establish the reliability of the data. We conducted our work
from January 2005 through

    Results in Brief

September 2005 in accordance with generally accepted government auditing
standards. For a more detailed explanation of our methodology, see
appendix I.

When deciding which credits to accept from transfer students, receiving
institutions consider the sending institution's type of accreditation,
whether academic transfer agreements with the sending institution exist,
and the comparability of coursework, but policies vary in how they
evaluate and apply a student's transferable credits. About 84 percent of
institutions consider whether the sending institution is accredited, and
many consider the type of accreditation-national or regional-when
determining which transfer credits to accept. Many institutions' transfer
policies specify that they only accept credits from a regionally
accredited institution. As a result, students from nationally accredited
institutions may have their credits denied on the basis of their previous
institution's type of accreditation. About 69 percent of the institutions
have agreements with other institutions to streamline the transfer
process. In these agreements, receiving institutions, after reviewing the
sending institution's coursework and faculty credentials, agree to accept
credits directly from the sending institution without further evaluation.
If agreements do not exist, many institutions review student coursework to
determine its equivalency and applicability toward a degree. The processes
institutions follow when evaluating the transferability of prior
coursework and accepting credits for transfer vary. Specifically,
institutions vary in how they evaluate credits, who makes the decisions to
accept credits, and when credit transfer decisions are made. For example,
some institutions evaluate transfer credits prior to student transfer,
while others make final credit transfer decisions after student
enrollment.

State legislation, statewide initiatives, and the accreditation standards
that accrediting agencies set help facilitate the transfer of academic
credits from one postsecondary institution to another. Some states
facilitate the transfer of credit among their public institutions through
a variety of statewide legislation and initiatives that, among other
things, support the establishment of statewide transfer agreements, common
core curricula, and common course numbering systems, and encourage
institutions and others to make transfer information available to the
public. Accrediting agencies facilitate the transfer process through the
standards they set. The accrediting agencies we reviewed set standards for
accreditation that require institutions to review the educational quality
of the sending institution, the comparability of credit to be transferred
to the receiving institution, and applicability of the credit in relation
to the programs being

offered at the receiving institution. In addition, the six regional
accrediting agencies that we reviewed generally encourage member
institutions not to use the sending institution's type of accreditation as
the sole factor in determining which credits to accept for transfer.

A student's inability to transfer credit may result in longer enrollment,
more tuition payments, and additional federal financial aid, but the full
extent to which these occur cannot be determined because institutions told
us that they do not collect specific data on students unable to transfer
credit. If the receiving institution decides that few or no credits earned
at the sending institution are equivalent to its course offerings, the
student may need to repeat coursework that could result in enrolling for
one or more additional terms. National data indicate that graduates who
transferred from a community college take on average 10 more credits and 3
more months than nontransfer graduates. Transfer graduates may take more
credits for reasons, such as changing majors, which are not related to
their decision to transfer. We could not determine the extent to which
transfer students differ from nontransfer students in these areas.
However, a student taking additional credits as a result of being unable
to transfer credits will likely have to pay additional tuition, ranging
from $150 per credit hour at public institutions to $520 per credit hour
at private institutions. The extent to which these costs are borne by the
student or the federal government varies depending on the student's
eligibility for financial aid.

In this report, we suggest that Congress consider amending the Higher
Education Act of 1965 to require postsecondary institutions eligible for
federal financial aid to issue a statement in their transfer of credit
policy that they will not deny the transfer of credit on the basis of a
sending institution's type of accreditation.

Background 	Patterns of enrollment in postsecondary education reflect that
students frequently enroll in more than one postsecondary institution.
Education's National Center for Educational Statistics (NCES) found that
40 percent of students who entered college in the 1995-1996 academic year
attended at least two institutions in the following six years. Many
students enroll in community colleges with a plan for eventually
transferring to a 4-year baccalaureate program. As a result, 4-year
institutions face pressure to award transfer credit for coursework taken
at another institution.

Data show that students transfer in numerous directions. Traditional
transfer is typically from a 2-year institution to a 4-year institution.

However, students also transfer from 4-year institutions to 2-year
institutions, known as reverse transfer, as well as laterally between
similar institutions (e.g., 2-year to 2-year or 4-year to 4-year). As
shown in figure 1, traditional transfer accounts for at least one-third of
first transfer activity.

Figure 1: Types of First-Time Transfers between 1995 and 2001

Public 2-year to 4-year

4%

For-profit to public or not-for-profit

4-year to public 2-year

Public 2-year to public 2-year

4-year to 4-year

All others

Source: Beginning Postsecondary Students.

When students want to transfer their earned academic credits from one
institution to another, they must submit a transcript showing their
coursework and earned grades to the receiving institution. The receiving
institution may then evaluate the transcript and assess the educational
quality of the student's learning experience, compare the level and
content of the learning experience with those of the learning experience
offered by the receiving institution, and determine the applicability of
the student's coursework to the degree or programs offered at the
receiving institution. To help streamline the evaluation process, sending
and receiving institutions enter into voluntary transfer agreements, which
contain criteria for credits to transfer.

Today, many students who begin their studies at private, for-profit
institutions transfer to public or private nonprofit 4-year institutions.
To meet this demand, many private, for-profit institutions have revamped
their curricula, transforming what had chiefly been vocational training

aimed at job placement to a core educational curriculum that prepares
students to pursue associate's, bachelor's, and even graduate degrees.

The Department of Education administers federal postsecondary education
programs, including the Title IV federal financial aid programs under the
Higher Education Act of 1965, as amended. To be eligible for federal
financial aid, a postsecondary institution must be accredited by an
accrediting agency recognized by the Secretary of Education. Accrediting
agencies are private educational associations of regional or national
scope that develop evaluation standards and conduct site visits to
evaluate postsecondary institutions. To become recognized, an accrediting
agency must submit a written application to Education that lays out its
standards for accrediting institutions as well as its procedures for
ensuring that institutions follow those standards. Education requires
accrediting agencies to set standards that instruct institutions to have
the resources and policies in place to provide a quality education.
Education applies the same requirements to both regional and national
accrediting agencies. Education has recognized eight regional accrediting
agencies that generally accredit academic degree granting institutions in
their specific region of the country, and about 50 national accrediting
agencies that accredit various kinds of specialized postsecondary
institutions, such as technological or religious institutions, and
programs such as nursing and engineering.

The most current national data on students show that in September 2003, an
estimated 15.2 million students were enrolled in postsecondary
institutions; 77 percent of these students were enrolled in public
institutions, 17 percent in private nonprofit institutions, and 6 percent
enrolled in private for-profit institutions.1 Additionally, about 6,900
degreeand non-degree-granting postsecondary education institutions had
students that were receiving federal financial aid. Figure 2 shows the
percentage of students attending public, private nonprofit, and private
forprofit institutions, and figure 3 shows the type of institutions
receiving these funds.

1 Integrated Postsecondary Education Data System, U.S. Department of
Education.

Figure 2: Percentage of Enrolled Postsecondary Students Enrolled in
Public, Private Nonprofit, and Private For-Profit Institutions
Participating in Title IV

                               Private for-profit

                            Private nonprofit Public

Source: GAO analysis of Integrated Postsecondary Education Data System

Figure 3: Institutions Receiving Title IV Federal Financial Aid, by Type

Private for-profit

Private nonprofit

                                     Public

Source: GAO anaysis of Integrated Postsecondary Education Data System.

In order to acquire federal financial aid, students are required, among
other things, to demonstrate financial need, demonstrate qualifications to
enroll in postsecondary education, be working toward an eligible degree or
certificate, be a U.S. citizen or eligible noncitizen, and maintain
satisfactory academic progress while in school. Education uses a formula
to determine the amount of a student's financial need and his or her
expected family contribution toward tuition, taking into account a number
of factors including the student's or family's resources and the costs of
attending an institution. In their financial aid packages, students may
receive federal grants or loans, with the neediest students receiving
about $4,000 per year in a Pell grant and up to $4,000 in loans under the
Perkins loan program. Additionally, all students qualify to receive
Stafford loans for which the government may subsidize or defer the loan
interest while students remain enrolled in school.

    Institutions Consider Accreditation, Transfer Agreements, and Coursework
    Equivalency when Making Credit Transfer Decisions, but Policies Vary

Prior to granting credit for courses taken at another institution,
institutions may consider a variety of criteria, such as accreditation,
transfer agreements, and course equivalency. Many institutions consider
the accreditation of the sending institution, including the type of
accreditation-national or regional-when determining which transfer credits
to accept. Institutions may also assess the equivalency of coursework
taken at other institutions, either through establishing transfer
agreements covering a number of courses or on a course-by-course basis.
Though reviewing courses can be time-consuming and maintaining transfer
agreements requires an ongoing commitment, officials said that transfer
agreements do facilitate the transfer process. Institutions also vary in
who makes the final decision on which credits to accept- administrative
official or departmental faculty-and when they inform a student of their
decision.

      Institutions Consider Accreditation when Deciding Which Transfer Credits
      to Accept and Commonly Accept Credits Earned at Regionally Accredited
      Institutions