The U.S. postsecondary credentialing system does not serve the majority of Americans well. Four key factors are driving the effort to redesign system: (1) its dated, degree-centric nature<, (2) credential expansion, (3) the need to improve equity in education, and (4) rapidly changing workforce needs.
The current system of higher education in the U.S. leaves behind over 40 million Americans who have acquired some college credits but no credential. About one in six adults who dropped or stopped out of college have no credential to formally recognize what they have accomplished. The system also leaves behind 81 million adults who have no postsecondary experience. This represents 52 percent of the adult population. For working adults, two- and four-year academic degrees can be difficult to achieve because of work, family, and other obligations. Meanwhile, because neither colleges nor employers consistently recognize partial degrees, people who lack a degree are treated as if they have no learning. These factors can hinder employment and further education.
Census data from 2020 shows that only 48 percent of Americans aged 25 and older have a college degree. Of those with a college degree, 71 percent are white adults.
The data on degree completion by race/ethnicity reveals major disparities, with 38 percent of Black adults and 30 percent of Latina/Latino adults having a college degree. This compares to 67 percent of Asian adults and 53 percent of White, non-Latina/Latino adults. Black adults also are the group with the highest proportion of people who have some college but no degree (18 percent) and bear the highest student debt load among all racial groups. There is a clear equity gap in credential completion, and this gap may be widened because skills and learning are not formally recognized by higher education. This can intensify equity-based challenges in education and employment.
The U.S. credential landscape has become increasingly complex due to the proliferation of education and training providers and the growing demand for alternative credentials. The demand for new credentials is fueled in part by the increasing interest in certificate programs and alternative credentials. For example, the number of available badges grew by 73 percent between 2020 and 2022. As learners and workers come to accept a growing number of new credentials, more and more employers have also become learning providers, offering their own curricula and credentials. This expansion of credentials and providers has made it difficult for learners to understand and evaluate the value of these credentials.
Findings from the latest report from Credential Engine indicate there are more than 1 million discrete credentials awarded in the U.S. They come from four types of providers: postsecondary education institutions, MOOC (massive open online course) providers, non-academic providers, and secondary schools.
Today’s labor market is markedly different from that of 40 years ago. While employers still need workers with industry-specific knowledge and skills (i.e., technical or “hard” skills), they increasingly value non-technical skills (also called “human,” “power,” “fundamental,” “essential”, “durable”, or “soft” skills) such as communication, teamwork, and emotional intelligence. Some employers struggle to find the workers they need because these non-technical skills and knowledge are often not well-documented or credentialed. Meanwhile, the current postsecondary system is challenged to meet the demands of a labor market in which lifelong learning is essential.
Incremental credentialing can strengthen the connections between working adults, higher education systems and institutions, and the labor market. An incremental credentialing system would help clarify what skills are needed, for which industry sectors, and job levels. It also would identify the entities that provide training for the available credentials. These all have important implications for workforce preparation and credentialing.