Moving from a Degree-Centric Postsecondary System to an Incremental Credentialing System: What Happens to Learners’ Financing Options?

Add Your Heading Text Here

Policy in Incremental Credentialing

Playbook Sections

Additional Resources

Federal Government

Policy That Affects Incremental Credentialing

Federal Government

Tools — Congress and federal agencies have many tools to influence credentialing. They can use the bully pulpit to highlight the value of incremental credentials. They can work across the agencies that have strong connections with employers to create new opportunities for education and training. They can provide funding incentives (e.g., new grant programs) to encourage such opportunities at the secondary and postsecondary levels.

Financial Aid For Learners — Pell grants are a federal subsidy to help learners of lower income pay for college. Pell is limited to students with financial need who have not earned a bachelor’s degree or who enroll in certain post-baccalaureate programs through participating institutions. More than 5,000 institutions participate. For years, there has been debate over expanding federal financial aid to cover short-term credential programs. Advocates argue we need more flexible options that quickly prepare people for in-demand job opportunities. Critics contend that many short-term, non-degree programs don’t help workers advance beyond static jobs that pay low wages – an outcome that could harm people from low-income backgrounds.

Data Collection — The Integrated Postsecondary Education Data System (IPEDS, a U.S. Department of Education data-collection system established in 1992) annually conducts 12 surveys – in fall, winter, and spring. All institutions authorized to participate in federal financial assistance programs are required to complete these surveys. Data include institutional characteristics and prices, enrollment, financial aid, degrees and certificates conferred, and student persistence and success. IPEDS is now considering whether and when to collect non-degree data. Answers to those questions will be very important policy decisions for incremental credentialing.

Workforce-Target Incentives — In the workforce development area, policy through Career and Technical Education (CTE) and related programs under Perkins and the Workforce Innovation and Opportunity Act (WIOA) provides funding and guidance that is particularly important for community and technical colleges. High-quality CTE programs represent an effective way to provide young adults with an educational experience that prepares them for college and career success. However, not all CTE programs offer accessible pathways to high-quality educational options; too many lead to credentials that can be fairly described as dead ends. Apprenticeships— important to incremental credentialing — are guided by law such as 29 U.S.C. §50 on promotion of labor standards of apprenticeship plus regulations covered in 29 CFR 29 on labor standards for the registration of apprenticeship programs.

Career Advising and Navigation Services — In re-employment assistance programs and WIOA, federal policy can expand access to effective coaching to help workers navigate a new economic landscape. Federal policymakers could increase investments in Wagner-Peyser re-employment assistance programs and WIOA programs. This would allow states and local workforce boards to hire and train more job coaches at American Job Centers. Policymakers could also increase funding to states to create a high-quality coaching support system across all organizations that serve dislocated and at-risk workers. Many groups are calling for specific actions, including (1) hire more coaches, (2) give coaches training and tools, (3) align performance incentives among all coaching providers to emphasize long-term career success, and (4) ensure that all populations are served.

Gainful Employment — In May 2023, the Biden administration released its gainful-employment rule that requires programs to show that graduates can afford their yearly debt payments and that they are making more than an adult who did not go to college. The regulations apply to programs at for-profit institutions as well as nondegree programs in any sector. Under the proposed rule, a program would have to pass two tests: a debt-to-earnings ratio and an earnings threshold. Programs would fail the debt-to-earnings ratio if the median annual payments of graduates are more than 20% of their discretionary income or 8% of their annual income. Programs that fail either or both metrics in a single year would be required to provide warnings to students.  Those that fail the same metric in two of three consecutive years could lose access to federal student aid. The U.S. Department of Education is expected to release final regulations by Nov. 1 that will take effect July 1, 2024, following a public comment period.

Share Section

Improving Education and Employment Outcomes