Transcript holds occur at many higher education institutions when a student incurs unpaid balances for unpaid tuition, room and board, parking tickets, and library fees. The unpaid balance, often referred to as student debt, can additionally incur interest, increasing the amount owed by a student over time if unresolved. Students who leave their higher education institution without graduating but owing the institution money are often unaware of the hold on their transcript. They may encounter the hold years later when they request an official transcript for a job, or the debt comes up on a credit report. Holds on transcripts may also result in lost credits for students trying to re-enroll at a different institution.  Students cannot access the credits earned at the prior institution until the debt is paid off.  Some students then start over, and their prior credits are lost. Policies on transcript holds have been found to disproportionately affect students of color and those from low socio-economic backgrounds.

The related term, "stranded credits" refers to the academic college credit that students have earned but cannot access because their former higher education institution is holding their transcript as collateral for an unpaid balance to the institution.