As states cash in on the potential of non-degree credentials to become a more significant engine for economic mobility, new frameworks are emerging to ensure these innovative programs pass muster.
There are over one million credentials offered in the U.S., 60% of which come in the form of badges, licenses, certifications and apprenticeships, according to a 2024 report from Credential Engine. However, at least a third of today’s short-term credentials fail to offer earners any significant wage increase, per Lumina Foundation.
“We now know that states are spending about five and a half billion dollars on short-term credentials and looking to spend more,” said Kermit Kaleba, strategy director for credentials of value at Lumina. “How do they know if the investments they’re making are leading to the kinds of labor market outcomes, job outcomes that they want? How do they know employers are finding the talent that they want?”
As a result, Lumina has launched the FutureReady States initiative. Twelve states will come together to evaluate which credentials offer economic value to both the individuals who earn them and the industries that employ them.
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The initial phase will help participating members assess current investments and evaluate the intended outcomes of non-degree credentials in the state. They will then develop blueprints for later funding decisions.
Alabama, a member of FutureReady States, built a credential registry in 2022 to promote transparency and consolidate all certificates, licenses, traditional degrees and non-degree credentials offered in the state. Other libraries have gained legislative approval in Indiana, Connecticut and Texas. This accreditor is also creating an assurance structure to analyze the quality of credentials offered by third-party providers.
“Alabama has prioritized building a transparent, skills-based credentialing system that puts students, workers, and employers on the same page—and on the path to shared success,” said Kay Ivey, governor of Alabama.
The Burning Glass Institute also recently unveiled a national database that has evaluated more than 23,000 non-degree credentials from over 2,000 providers.
According to the website, the Credential Value Index studies over 50 metrics about a given credential, allowing users to understand whether they can expect to gain higher wages, successfully transition to a new job and advance in their career over the long term.
