A Private Equity Monopoly Is Why It Costs $9 to Get Your University Transcript
Price gouging is everywhere.
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From a reader.
Dear Matt,
I think I found a weird little PE-rolled-up corner of the market: university transcripts.
As a public school teacher, I often have to submit official transcripts to state licensure authorities or to school districts. Universities have outsourced this to “credentials management” companies, who stand between students requesting official transcripts and the institutions themselves. Unfortunately, they’re buggy nightmares, and what should be a three-minute job inevitably takes 30: in my last go-round with Parchment, I had to create a new account (see screenshot), and for some reason the software kept kicking back my date of birth as invalid, despite having entered it in the correct format. Once you’ve created an account, you request your transcript and enter your credit card information (a PDF e-mailed to you is $9). Once you press “send,” I’m not quite sure what happens on the back end: I don’t think Parchment actually has any student files. They just send your information to the university for validation, the university sends back the transcript, and then Parchment sends it on to your chosen recipient. It takes a while.
Turns out that Parchment is the result of a PE rollup in the space.
"The combination of Parchment and Credential Solutions is the latest in a series of similar acquisitions in the credentialing business. Parchment bought AVOW Systems in 2012, and Credentials Solutions bought eScrip-Safe in 2014.”Then, Brentwood Associates (the PE firm) acquired both Credentials Solutions and Parchment — and merged them.
If you want your credentials, you have to pay the troll toll to Brentwood Associates. I don’t even mind paying $9 to have a PDF e-mailed to me; I just object to the increasing crappiness of the software, which seems to make simple tasks difficult.
Bonus points if you can figure out why university registration and student management systems generally (Ellucian, PeopleSoft) are so aggravating and worthless.
Sam
Responses so far…
In a related area (record keeping about people), I think there is a emerging set of monopolistic rollups in payroll solutions for medium to large enterprises, outsourced payroll management/bureaux services. In a few years time I think there will only be 4-5 options remaining, and even some of those will wind up buying services from others in that small insiders club (i.e. certain geographies may only have 1-2 large scale suppliers remaining for payroll support, where the demand is limited).
Some of the bigger suppliers in those areas are acquiring smaller specialists in non-US geographies (who often can offer UK, US solutions alongside their local niche geographies). Worth some research.
Also, some of the mega-consultancies/system integrators are also rolling up specialist HR/Payroll implementation partners (and some of these also do business process outsourcing in the HR/Payroll domain).
One of the six "official" transcripts I requested was through Credential Solutions for $14, three through Parchment for $7.25, $5, and $10. And two through National Student Clearinghouse for $10.25, and $13. Then double most of those fees to get my unofficial copies of the transcripts. The most ridiculous fee was the $13 - it was for a pass/fail grade from a high school summer program at a University for college credit for one course.
I don't even understand why monopoly is important in this regard. It's Hobson's choice for the students - take the service your school partners with or have no transcript. The student is not the purchaser here, the school is, and they probably don't care much how much this costs the student. The schools are more than capable of fulfilling their own transcript requests without a service. So where is the leverage from a monopoly?