Credentials of Value

9/8/2022

Several people representing different professionsThere is growing recognition of the value of non-degree credentials as a tool to help promote learning and advance workforce development goals.  Credential programs that offer industry-wide recognition provide the ability for students to attain a valuable and transferable credential to use in the workforce. States are focusing on high value credentials that lead to future employment or further education. Demand for nondegree credentials 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: 

  • 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. Credentials are also on the rise in industries such as healthcare, 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 different types of credentials exist, and programs can often vary greatly. However, a few common types and features of credentials have emerged in recent years. 

Certificates 

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, and 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 & professional health sciences certificate, culinary arts certificate  

Industry Certifications

Industry certifications are distinct from certificates, they 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 (PHR), 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 (MOOC) 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 licenses often requires passing an exam. 

Examples include: Real estate agent, registered nurse, veterinary technician, school bus driver 

Apprenticeships 

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 

Credential Factors 

Transparency

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.  

Stackability

 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

Value 

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.

Affordability

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.

State Policy Approaches 

  • 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.  
  • Utah SB 131 (2018) requires the development and analysis of credential programs including stackable credentials.
  • Indiana SB 198 (2017) includes attainment of an industry recognized certification or credential 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.

Additional Resources

NCSL Resources

Other Resources

Overview 

Nondegree Credential Value 

Nondegree Credential Quality