As micro-credentials grow in popularity, campus leaders can look to new research and state support to expand access, reduce costs and strengthen workforce readiness. A Manhattan Institute report, “How Micro-credentials are Revolutionizing the Higher Education Business Model,” examines how states are investing in the short-term programs that now appeal to high school students and non-enrolled adults ages 18 to 30.
“Micro-credentials offer students the opportunity to enhance their career prospects by extending the shelf life of their skills to meet the evolving needs of the modern economy,” the report states.
According to the report, states have invested at least $5.59 billion in micro-credentials through student aid, institutional support and workforce-aligned programs. These investments help colleges and universities develop new credential pathways, making higher education more accessible to students and more responsive to workforce demands.
Key funding strategies for micro-credentials in higher education include:
- Reducing student costs through direct aid.
- Providing grants to institutions for program development.
- Aligning programs with workforce needs.
- Linking micro-credentials to performance-based funding.
Some states are launching targeted programs to expand access to micro-credentials, ensuring they align with evolving workforce demands and higher education initiatives.
Louisiana’s M.J. Foster Promise Program provides adult learners with up to $6,400 per year to pursue workforce training at Louisiana’s Community and Technical Colleges, Louisiana State University-Eunice and Southern University-Shreveport. The program has enrolled more than 1,200 students—with 81% women, about 50% African American and 60% from low-income households, the report states.
In Colorado, House Bill 24-1340 offers a refundable state tax credit for low-income high school graduates pursuing postsecondary education, including micro-credential programs at technical colleges, community colleges and four-year institutions. These initiatives help bridge financial gaps and expand career-focused learning opportunities.
“These advantages have made micro-credentials the fastest-growing type of credential in American higher education,” the report states.
Enrollment trends show rising demand for micro-credentials, the report states:
• Short-term program enrollment grew by 9.9% in fall 2023.
• Associate degree enrollments rose 3.6%, while bachelor’s degrees increased 0.9%.
Approximately 3.7 million students are currently enrolled in non-credit micro-credential programs, notes the report. Since 2010, these programs have accounted for at least 41% of all credentials awarded by community colleges. About 25% of the American workforce now holds a micro-credential.
How campus leaders can ensure micro-credential quality and workforce alignment
To maximize their impact, colleges must integrate micro-credentials thoughtfully into degree programs and workforce training initiatives. Key considerations include:
- Embedding micro-credentials into degree pathways.
- Developing governance frameworks for quality assurance.
- Utilizing cost-effective content and existing resources.
- Strengthening employer partnerships for workforce alignment.
- Communicating value to stakeholders, policymakers and students.
Some states have established micro-credential frameworks to assess their impact on job opportunities, employer recognition and alignment with workforce demands. For example, New Jersey, Alabama and North Carolina have created formal review processes to ensure colleges offer high-quality, job-aligned micro-credentials that provide real economic value. These frameworks require colleges to:
- Validate employer demand before launching programs.
- Track wage and employment outcomes of graduates.
- Ensure stackability within degree pathways.
With state oversight and employer input, colleges can ensure micro-credentials maintain academic quality and workforce value. The report encourages colleges to regularly review programs to keep them relevant and complementary to traditional degree programs.
