As transfer student enrollment rises, institutions must confront the economic and human toll of inefficient credit transfer—and embrace AI and policy innovation to fix it.
In the evolving landscape of higher education, one figure stands out: 13.2% of all continuing and returning undergraduates in fall 2023 were transfer students, that’s a notable 5.3% increase from the year prior, according to NSC Research. For institutions grappling with demographic cliffs and value perception gaps, this trend is both a lifeline and a warning.
The Lifeline: Transfer Students Are Enrolling
The growth is driven largely by two-to-four-year transfers and includes notable increases among Black (+8.3%) and Hispanic (+4.4%) students. These numbers should have enrollment marketers and campus leadership leaning in. Transfer students represent a motivated, diverse, and growing population already engaged in higher ed, and willing to re-engage if we make it easier.
The Warning: Lost Credits = Lost Time, Lost Trust
Yet the system remains fundamentally flawed. According to a recent Inside Higher Ed survey, over half of students who attempted to transfer lost credits, and nearly 20% had to repeat classes they had already passed. Worse still, 16% abandoned their education altogether due to the confusing and disjointed process.
A powerful student story from EdTrust puts a human face to this data: one learner lost 22 credits during their transfer, effectively downgrading their academic progress and extending their time (and cost) to degree. These delays aren’t just frustrating; they’re financially unsustainable for students and institutions alike.
The Economic Toll of “Invisible” Enrollment Barriers
Lost credits are more than academic inconveniences; they’re economic roadblocks. Delayed graduations increase debt burdens and risk exhausting Pell Grant or federal loan eligibility. For institutions, this inefficiency increases advising load, drives up per-student costs, and undermines retention and graduation rates, which are metrics that matter to accreditors, policymakers, and families.
The message is clear: credit mobility is an enrollment strategy.
How Institutions and States Are Responding
Forward-thinking states and systems are paving smoother pathways:
- Texas A&M’s TESS tool uses AI to assess transcript compatibility and streamline decision-making.
- The CSU Transfer Planner empowers California students to explore options across 23 campuses with aligned requirements.
- Wyoming’s common course numbering system minimizes articulation headaches for in-state community college students.
- The Dallas Transfer Collaborative models regional coordination between multiple universities to eliminate duplication and confusion.
These aren’t one-off fixes—they’re signs of a systemic shift toward frictionless, learner-centered credit articulation.
Can AI Solve the Transfer Puzzle?
AI holds tremendous promise in this space. As The Chronicle reports, credit articulation—the tedious work of matching course equivalencies—is “ripe for AI.” Platforms like CourseWise, grounded in UC Berkeley research, are already reducing administrative workloads and increasing credit acceptance rates. The potential? More transparency, faster evaluations, and better outcomes.
We’ve seen AI boost marketing yield, optimize admissions, and power personalized learning. Transfer pathways may be its next big frontier.
What Institutions Can Do Now
- Audit your credit articulation policies and timelines. How long does it take? How transparent is it?
- Market your transfer friendliness. Are you telling prospective students that their past work will be honored?
- Invest in or partner on AI and digital transcript tools. Platforms like TESS, CourseWise, or ASU’s Trusted Learner Network are setting the pace.
- Get loud about articulation agreements. If you have them, promote them. If you don’t, build them.
- Think beyond enrollment. Helping transfer students succeed is about affordability, completion, and trust—especially with the 36.8 million Americans who have “some college, no degree.”
Retaining Credits Retains More Value
In a competitive and skeptical market, every lost credit is a lost opportunity—for the student and the institution. But by embracing smarter tools and policies, colleges can build seamless, stackable, and student-centered pathways that boost enrollment, reduce cost, and deliver on the true promise of higher education.