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. 

Credit Laundering Explained in 60 Seconds

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 send your eggs to any college where they’ll be placed in a basket (your teen’s college transcript).  You can send them to a second college, even a third.  That your eggs are ever placed in a new basket doesn’t change the color of the eggs!   

The color of the egg never changes – even in new baskets

This is because colleges always (always!) need to know the origin of a credit before they evaluate it.  To evaluate credit, a college will always (always!) remove your eggs from the basket, and evaluate them individually according to their policy of credit acceptance. This is why some credits are accepted at some colleges and not others.

As you can see, changing baskets is not a way to trick a college.  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 eggs (credits) are always dumped out of the basket (transcript) first.

Egg color never changes.  Except when…

The First Exception: Articulation Agreements

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 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 ANY associate degree change the color of my eggs?  No!  And that’s where some families make a big mistake, so pay close attention.  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 a 4-year college is highly unlikely to transfer well into a 4-year college – no articulation agreement.

PRO TIP: If you’re looking at a degree from the Big 3, don’t pursue the AA, instead pursue the BA. An AA from one of the Big 3 will not transfer well into other colleges.

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: Legitimate Credit Laundering

A very limited number of non-college businesses and organizations have a special arrangement with a college or university.  This arrangement handles your credits taken with the business, and places them on a transcript of the partner college as original credit.  Simply, your credit “looks like” it was earned it at the college.  This is not illegal or unethical since the college has entered into this arrangement and is perfectly comfortable with this outsourced credit arrangement. The college, of course, is hoping you’ll use that perk as a reason to enroll and complete a degree. Creative people see it as an opportunity to send that transcript to their “real” target college. The tactic here is that the college credit now appears as “regionally accredited” credit, the most transferable type.

As someone who has a lot of degree planning experience using alternative credits, this transcription loophole is so unbelievable, that I’m shocked every time I hear that it worked. Remember, this is not a case of your college simply reviewing your credits, this is a case of a middle man college painting your eggs gold for you while you have no intention of ever attending that college or using them for anything other than credit laundering. This is a pretty big deal.

As predicted, this doesn’t work 100% of the time, and if I’m being honest, I can’t even imagine the discussions behind closed doors that made these deals in the first place. I will share with you the current credit laundering pathways that exist, and to be clear, these are LEGAL to use, but this is the one area I would say to proceed with a little skepticism and caution. There is at least one example of HS4CC family that I personally helped through a crisis of their entire transcript being challenged as a result of a “regionally transcripted” attempt. They followed every rule perfectly, and we are unclear about how the company was 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 next to any company whose transcription process is in practice an example of credit laundering. In the following “Legitimate Credit Laundering” is a highly successful process that has resulted in continued successful transfer as original credit. The “Possible Credit Laundering” providers have worked… but also have not worked. There is something in the way these courses are recorded that has alerted a receiving college to their origin. If I find out what it is, I will enthusiastically share, but since I don’t know what it is, the best I can say is to use caution if you hope to transfer those credits somewhere other than the middle man parter college.

Legitimate Credit Laundering

  1. Wescott Courses/Omega Math (Credit laundering through UMassGlobal)
  2. Veritas Press / Scholars Academy (Credit laundering through Cairn University)
  3. Classical Conversations Plus (Credit laundering through Southeastern University or The College at Southeastern)
  4. IEW Christian Halls (Credit laundering through Southeastern University or Donnelly College)

Possible Credit Laundering

  1. (possible credit laundering through University of Pittsburgh)
  2. TEL Learning (possible credit laundering ONLY when using McMurry- do not choose any of the other partners on their list)

Read the entire HS4CC Advising 101 Series here


Executive Director of Homeschooling for College Credit