Posted in HS4CC

Advising 101: Credit Laundering

Colleges are highly predictable in how they handle incoming credit, but people are exceptionally creative, and it doesn’t take long before bright parents think they’ve found a loophole.  Let’s look at that loophole. 

The question is usually something like this “My college doesn’t accept CLEP credit, but XYZ College does.  Can I enroll at XYZ college, get CLEP credit on my transcript, and then just transfer back over with all my CLEP credit?”

or, another variation…

“My college doesn’t accept Sophia credit. How does Sophia credit appear on a transcript anyway? Will it actually say ‘Sophia’ on there?”

and still…

“I’m going to earn an associate’s degree at XYZ college cheaply and affordably using a lot of CLEP and Sophia then I’ll just transfer it to my state university.  Can I do that? 

These are all variations of the same idea:  credit laundering.  Credit laundering is a term I started using in 2008 to explain the concept of earning credit from one institution and trying to get it accepted at a different institution by having it appear on a transcript elsewhere. Think of this as using a “middleman” college to house the credit. While this may seem like a normal transfer question, the devil is in the details.  In credit laundering, the student hopes to “wash” the credit in a way that will trick their new college into accepting it.  This comes up a lot when a student finds out their dream college won’t accept some form of alternative credit.  The short answer:  you can’t do it.


Since colleges are predictable, it pays to understand the concept of how transfer credit (especially non-traditional transfer credit like credit by exam, Sophia, Studycom, CLEP, etc.) is evaluated.  I like to use an Easter egg analogy to help paint a picture.

Imagine every type of credit is an Easter egg of its own color.

  • CLEP eggs are red
  • Sophia eggs are blue
  • Dual enrollment eggs are green
  • Studycom credits are pink
  • etc.

Now, imagine your teen’s college transcript is an Easter basket. 

You can put your eggs into a basket and take them to any college.  You can take them to a second college, even a third.  That your eggs are in a new basket doesn’t change the color of the eggs!   

The color of the egg never changes – even in a new basket

This is because colleges always (always!) need to know the origin of credit before they evaluate it.  Colleges always (always!) remove your eggs from the basket, and evaluate them individually according to their policy of credit acceptance.

As you can see, changing baskets is not a way to trick colleges.  Colleges are quite used to taking eggs out of baskets and evaluating them for transfer.  That’s the job of the Registrar at every college!  They are experts in this area, and evaluate hundreds of transcripts every semester – and all are deconstructed first.

Egg color never changes.  Except when…

Since 2012, I’ve told you that there is one single exception – but as I revise this post today, I’m going to also tell you about a brand new second exception.

The longest-standing exception to credit laundering is when an articulation agreement exists between one college (usually a 2-year college) and a second college (usually a 4-year college).  It’s not uncommon for 2 and 4-year colleges to enter into formal written agreements that intentionally transfer a degree earned at a 2-year college in as a full and perfect transfer at a 4-year college.  When these written articulation agreements exist, this changes EVERYTHING.  In this case, the eggs are now all painted gold!

Articulation Agreement

An associate degree inside an articulation agreement changes the color of all the eggs.  The 4-year college now receives a basket of golden eggs, and they accept that basket as payment in full for your first 60 credits, no questions asked.  Credits inside an articulation agreement are not sorted and reevaluated- they are just accepted !

But wait! 

Will an associate degree always change the color of my eggs?  No!  And that’s where some families make a big mistake.  Even when an associate degree is earned, unless the two colleges you are using have a written articulation agreement with each other, the gold washes off and you’re back to a basket of individually colored eggs.  This is why an AA degree earned at one 4-year college is highly unlikely to transfer well into a different 4-year college – no articulation agreement.

To emphasize:  A written articulation agreement (followed perfectly and completed in full) is how you can guarantee the transfer of your credits as a full and perfect transfer. Finish your articulation agreement!

No articulation agreement: No gold eggs.

The Second Exception: “Regionally Transcripted”

A very limited number of non-college businesses and organizations have a special arrangement with a college or university.  This arrangement means your credit taken with the business will appear on a transcript of the partner college as original credit.  Simply, your credit becomes a credit that “looks like” you earned it at the college.  Since you’re not obligated to attend this college, your alternative credit is laundered into “regionally accredited” credit.

As someone who has a lot of degree planning experience using alternative credits, regional transcription is so unbelievable, that I’m shocked when I find a new program. Remember, this is not a college simply accepting your credit, rather they are painting the eggs to appear as if they taught the course. This is a pretty big deal.

As predicted, this is not working 100% of the time. There is at least one example of a business whose credits are now denied by a number of colleges despite them still advertising their credits as being “regionally transcripted” with two partner colleges. It’s unclear how they were ousted, but I’ve had to stop recommending their courses for this reason.

If you look at the HS4CC list of 30 Ways to Earn College Credit, you’ll see I’ve made a notation when a company uses “legitimate credit laundering.” Here are the current companies that result in legitimate credit laundering:

Legitimate Credit Laundering

  1. –> The University of Pittsburgh
  2. Westcott/Omega Math –> University of Massachusetts Global
  3. Veritas Press / Scholars Academy –> Cairn University
  4. Classical Conversations –> Southeastern University / The College at Southeastern
  5. IEW Christian Halls –> Southeastern University / Donnelly College
  6. TEL Learning –> no longer recommended unless you choose McMurry University as your transcribing partner.


Executive Director of Homeschooling for College Credit