It is well established that students who begin post-secondary education at a community college are less likely to earn a bachelor's degree than otherwise similar undergraduates who begin at a 4-year school, but there is less consensus over the mechanisms generating this disparity. We explore these using national longitudinal transcript data and propensity-score methods. Inferior academic preparation does not seem to be the main culprit: We find few differences between students' academic progress at each type of institution during the first 2 years of college and (contrary to some earlier scholarship) students who do transfer have BA graduation rates equal to similar students who begin at 4-year colleges. However, after 2 years, credit accumulation diverges in the two kinds of institutions, due in part to community college students' greater involvement in employment, and a higher likelihood of stopping out of college, after controlling for their academic performance. Contrary to some earlier claims, we find that a vocational emphasis in community college is not a major factor behind the disparity. One important mechanism is the widespread loss of credits that occurs after undergraduates transfer from a community college to a 4-year institution; the greater the loss, the lower the chances of completing a BA. However, earlier claims that community college students receive lower aid levels after transfer and that transfers disproportionately fail to survive through the senior year are not supported by our analyses.