States are focusing on high value nondegree credentials that lead to future employment or further education. Demand for transferable nondegree credentials that offer industry-wide recognition has grown in recent decades and accelerated in the wake of the COVID-19 pandemic.
Nondegree credentials cover a wide range of programs and certificates, but are generally:
- Designed to demonstrate competencies related to professional and workforce skills.
- Targeted to a specific job-relevant skill that can be tailored to meet labor market demand.
- Far shorter and significantly cheaper than a traditional degree program.
- Expanding to include a variety of career and workforce fields. Technology companies such as Google have begun using credentials to fill expertise in computer programming and IT professions. Nondegree credentials are also on the rise in industries such as health care, energy and advanced manufacturing.
- Offered by a variety of providers including colleges, universities and technical schools, but also industry groups and the military.
Types of Credentials
Numerous types of credentials exist, and programs often vary greatly. However, a few common types and features of credentials have emerged in recent years.
Certificates are generally issued in subject area fields after a shorter course of study. They can be awarded as credit-bearing or non-credit-bearing depending on the program and higher education institution. Certificates are generally used in career and technical education (CTE) and professional education programs. Community colleges issue the most certificates. The number of certificates issued by community colleges has increased by more than 150% since 2000.
Examples include nursing certificate, metal working certificate, allied health and professional health sciences certificate, culinary arts certificate.
Industry certifications are distinct from certificates and are generally awarded by an industry group, association, or a government agency. Certifications are often issued after an examination based on industry standards.
Examples include driver's licenses certification, project management certification, human resource certifications, software certifications .
Microcredentials and Badges
Microcredentials are similar to certificates but offer highly specific courses to develop distinct skills. They are generally offered online, often by Massive Open Online Course providers and are available on demand. They are often targeted to help workers in an existing profession build on their skills or learn a new program as part of continuing education and professional development. Nearly all are competency-based and involve mastery-based testing. One common area of use for microcredentialing is for educator professional development. Illinois SB 0578 (2013) allows teachers to use microcredentials as part of professional development.
Examples include IT and cybersecurity trainings, accounting and taxation microcredentials.
Occupational and Professional Licenses
Occupational licenses are credentials that provide proof of qualifications to work in a specific occupation. They can offer legal authority to work or practice in a specific profession. Obtaining a professional license often requires passing an exam, paying a licensing fee and completing training requirements.
Examples include real estate agent, registered nurse, veterinary technician, school bus driver .
Apprenticeship programs, in collaboration with higher education institutions and workforce partners, lead to an industry-recognized credential demonstrating program completion and proficiency. Registered Apprenticeships, through the U.S. Department of Labor have increased more than 64% in the past decade.
Examples include electricians, carpenters, plumber, construction industry
A transparent credential includes making information related to the skills and competencies of the credential publicly available and accessible. Transparency allows prospective learners to make comparisons between credential options and understand what career outcomes they can expect upon earning the credential. Transparency is also critical for employers and workforce partners, who are seeking employees with targeted skills and demonstrated competencies.
A stackable credential is generally recognized as a credential that can be used toward a higher-level certificate or degree such as an associate degree. These credentials build upon each other, and allow students to use prior knowledge and continue education over time. In 2018, nine states included specific references to stackable credentials in enacted legislation or appropriation bills. The National Skills Coalition has detailed additional benefits of stackable credentials in this report.
As more learners enroll in nondegree programs, stakeholders continue to examine the value of these programs. Data from the Strada Education Network and Lumina Foundation found that learners who obtain a nondegree credential have higher employment rates and earn $15,000 more in annual median income than learners without a nondegree credential. However, research from Third Way also found that only 48% of certificate programs provide return on investment that covers the net cost of earning the certificate.
While nondegree programs tend to be significantly cheaper than traditional degree programs, cost remains a challenge for many learners. Depending on the nondegree credential, students may face fees such as examinations or training experiences. Additionally, many nondegree credential programs may not qualify for traditional federal financial aid benefits. Learners in these programs, who are often adult students, may also navigate costs beyond tuition and program expenses, such as childcare, housing, transportation, and food.
Policy Questions to Consider
- Does the state have a goal or target for credential attainment? Maryland SB 317 (2017) directed the State Board of Education, Maryland Higher Education Commission, and the Governor’s Workforce Development Board to develop statewide attainment goals for industry recognized credentials.
- What incentives and mandates does the state offer for credential programs? California AB 19 (2017) includes increasing credentials and certificates as part of the goal of the California College Promise Program. Louisiana SB 102 (2017) includes credential attainment as part of the funding model for workforce training and education programs.
- Is there a protocol in place to collect data and information about credentials? California SB 1348 (2018) requires each community college program that offers a certificate for health professionals to report information and licensing data to the state.
- How are states identifying what is a high value credential? Louisiana’s Workforce Investment Council reviews credential every two years to evaluate labor market demand and participation data to determine if the credential is still valuable.
Recent State Legislation
Credential Designation, Governance and Quality
- Colorado SB 119 (2021) modifies the Career Development Success Program to include requiring the Department of Education to identify and recognize the top 10 industry-recognized credentials. Credentials must be associated with in-demand industries and include a guaranteed credit transfer pathways in higher education.
- Connecticut SB 1202 (2021) requires the Office of Workforce Strategy, in consultation with other state entities, to establish standards to designate certain credentials as "credentials of value." Also requires the creation of a database of the credentials offered in the state, by July 1, 2024. Requires specified institutions and training providers to submit information about the credentials they offer to be included in the database, creates an advisory council to advise on the database's implementation, and establishes council membership.
- Indiana SB 198 (2017) includes attainment of an industry recognized certification or credentials as part of the state’s definition of a workforce-related program.
- Virginia HB 1592 (2017) Requires community colleges to develop policies and procedures for awarding academic credit for successful completion of a state-approved credential.
Workforce and Institutional Programs
- Hawaii HB 1561 (2022) establishes a workforce readiness program within the Department of Education to provide opportunities for students to earn associate degrees, workforce development diplomas, pre-apprenticeship certificates, and industry-recognized certificates. Requires the department to designate schools to participate in the program.
- Illinois SB 1693 (2022) builds on the Illinois Industrial Biotechnology Public-Private Partnership to create a workforce development grant. Grants are awarded for the biotechnology career pathways and pre-apprenticeship program developments as well as industry-aligned credential expansion programs to increase the number of workers with in-demand skills.
- Virginia SB 84 (2022) permits New College Institute, a post-secondary institution, to provide specialized noncredit workforce training if local community colleges are unable to meet identified industry needs.
Stackable Credential Programs
- Colorado SB 192 (2022) requires the development of stackable credential pathways and provides funding for the adult education and literacy grant program in the Colorado Department of Education and nondegree credential programs at community colleges, technical colleges and local district colleges.
- Utah SB 131 (2018) requires the development and analysis of credential programs including stackable credentials.
- Michigan SB 268 (2020) The Michigan Reconnect Grant Act, creating the Michigan Reconnect Grant which provides financial aid for residents seeking associate degrees or industry-recognized credentials from certain educational jobs and training programs. Defines a credential as: a certificate or credential that is portable and is sought or accepted by multiple employers within an industry for purposes of recruitment, hiring, or promotion.
- Minnesota SF 2415 (2019) includes requirements that the commissioner of the Office of Higher Education must administer a credential completion program for adult learners as part of the Minnesota Reconnect Program.
- North Carolina SB 105 (2021) includes appropriation for the expansion of five pilot program initiatives at community colleges to target adult learners returning to higher education working towards are degree or credential.
- Delaware SB 12 (2022) incorporates adult students and workforce development programs under the State Student Excellence Equals Degree (SEED) Act. The expansion of the SEED grant program will encourage adult learners to return to school to enhance their knowledge and skills and increase their job opportunities following significant impacts by COVID-19-related job loss.
- Mississippi HB 1517 (2022) appropriates funds to community colleges, institutions of higher learning, local school districts and industry partners for short-term training programs to increase their capacity.
- North Carolina HB 103 (2021) appropriates funds to expand the RISE UP Training and Credentialing Program for the 2021-2023 fiscal biennium. The program is geared towards students attending community colleges and cooperative high schools for career success in the retail industry, customer service and sales.