Five years ago, I published a book on the future of university credentials, making some predictions about what seemed likely to come next in the market for degrees and emerging forms of alternative college credentials. In this time of uncertainty amidst a growing pandemic, it seems worth taking a minute to see how accurate those predictions were and to provide an update, considering the unexpected and unprecedented developments of the past few years.
To start off, it’s worth thinking back to 2016. Education policy leaders at the federal level and beyond were exploring the growing role of competency-based education and non-traditional providers—and calls were growing for stronger connections between universities and the world of employment. Leading university presidents and the American Council on Education were acknowledging the need to innovate and rethink educational credentials. And it was just a few years after the launch of the first MOOCs, putting the online higher ed market newly in the spotlight as it continued its steady growth. What The Chronicle of Higher Education christened a “credentials craze” was in full swing.
New types of educational credentials were often being championed as substitutes that would “disrupt” degrees, yet there was relatively little evidence of actual student demand for these upstart offerings. We were in the early innings of what I argued at that time was more of a supply-side-driven phenomenon: universities and companies were experimenting with new offerings, and the groundwork was being laid for a more digitally-oriented, shorter-form credentialing future.
Today, there is ample evidence of demand for new types of educational credentials—especially since the start of the pandemic. The growth of educational platform companies such as Coursera and 2U is being driven in part by a surge in demand for certificate programs and “alternative credential” offerings. The number of open badges awarded nearly doubled from 24 million in 2018 to 43 million in 2020. And major companies and industry groups are increasingly getting into the credentialing game, exemplified by firms such as IBM and Google. Strada Education Network’s consumer polling has shown that 40 percent of working-age adults have earned some type of non-degree credential—and that non-degree credentials are at the top of the list for adults seeking education or retraining. Among employers, awareness of and experience with new non-degree and digital credentials is also continuing to grow—and the potential value proposition of digital credentialing resonates, according to survey results that we published just last week.
Today, fewer providers are trying to brand their offerings with names like “nanodegree,” “MicroMasters” and “Credential of Readiness,” as they did a few years ago with a mix of new, often trademarked terms. Instead, “certificates” of all types seem to have the momentum in the United States as the standard-bearer for short-form educational programs. Yet, there remains plenty of confusion or ignorance in the marketplace about the basic differences between “certificates” and “certifications.”
The forces that drove interest in new forms of credentials in 2016 remain in place and have arguably strengthened: the increasing cost of traditional degrees; the demand for more-practical, skills-oriented education; the shift toward digital delivery; the desire of colleges to find new revenue streams; and the need for employers to find new pipelines for talent. And as anticipated, badging, embedding certificates into degrees and the idea of offering small credentials on the way to a larger one are emerging as key trends, and are ways that new types of credentials are augmenting and supplementing (rather than supplanting) degrees.
The Hiring Process Has Become More Technology-Driven
A key factor I’ve been studying is how employers are thinking about talent and changes in the hiring process, including shifts in their perceptions of college and university and other credentials.
Five years ago, the application of data and algorithms to the HR function—as well the use of pre-hire assessment—were in a fledgling stage. In 2018, my colleagues and I at Northeastern University had a chance to measure these shifts through a national employer survey, which found that more than half of organizations were beginning to leverage data and analysis in setting educational qualifications—and that 23 percent were engaged in “skills-based hiring” initiatives that de-emphasized degrees. Since then, attention to skills-based hiring and employers’ willingness to move beyond requiring college degrees has grown significantly, driven by the tight job market and employer concerns about diversity and equity.
Our most recent national employer survey project, released just last week with IMS Global affiliate 1EdTechFoundation, found that 34 percent of HR leaders say their organizations have skills-based hiring strategies in place today. And an even larger percentage of HR professionals are exploring or considering this approach. What’s more, our research revealed a clearer sense of employers’ motivations: they want better hiring results, to create new pathways for greater workforce diversity, and they’re pinched for talent. We also got a better sense of how skills-based hiring is being implemented: it’s often through pre-hire assessments, structured interviewing, and the use of portfolios and certifications in the hiring process.
This skills-based hiring trend has real momentum and is also evidenced in analysis of employer job postings and other data sources. The future will likely see a continued de-emphasis on merely requiring that prospective employees hold college degrees.
But that’s not the same as saying that employers no longer value college credentials, despite overhyped media reports that employers are “throwing out” degrees.
For all the change, today’s job market continues to value college degrees and to demand college graduates—in contrast to the idea that alternative credentials and disruptive market forces will simply wash away universities. That’s not at all meant to suggest that colleges’ strategies, offerings and value are perfect, however.
In my book I might have been a bit overly optimistic about the resilience of traditional higher ed, however. College enrollment has been on the decline, dropping 7 percent between 2010 and 2018. Then came the pandemic and even steeper drops that “show no signs of recovery from 2020” as documented by the National Student Clearinghouse Research Center and other sources. Even if this decline doesn’t quite match the dire predictions of mass college closures that were popular in 2016, the recent history and near-term outlook for traditional higher ed is more negative than I imagined.
Lifelong Learning and Post-Baccalaureate Education as the Bright Spot
The need for more continuous lifelong learning at all levels is growing, and there’s more evidence the needs of the job market are changing faster than ever, meaning a greater need for upskilling. According to a new national survey of C-suite executives that we recently conducted, 70 percent said that U.S. workers should be worried about their skills becoming outdated over the next few years. Quarter after quarter, the results of a growing roster of publicly traded edtech companies—including Udemy, Coursera, 2U, and Duolingo, for example —symbolizes the market demand for lifelong learning and upskilling.
Although the need for lifelong learning doesn’t mean that everyone needs a bachelor’s or master’s degree, graduate education is a higher ed bright spot, and one I predicted in my book that is proven out by the data, despite frequent claims in the media in recent years that the graduate degree market was saturated and on the edge of decline. Sure, there are some hyper-expensive traditional graduate programs that are delivering poor value for students. But these are by far the exception. The vast majority of master’s enrollment in the U.S. has been professionally-oriented for a number of decades, and demand has been surging, especially as graduate enrollment has moved to online. Even before the pandemic, 40 percent of U.S. graduate-level students were already online or hybrid.
The share of Americans who attain a master’s degree before age 29 has risen consistently over the last 10 years, and has doubled in the last 25. The Council of Graduate Schools and the National Student Clearinghouse Research Center have documented significant growth for graduate enrollment—up 5 percent between 2019 and 2021, compared to a 5 percent decline in undergraduate enrollment. And, the salary premium for advanced degrees remains high, meaning the degrees typically pay off.
Innovations such as stackable non-degree credentials as an on-ramp and low-cost MOOC-based degrees from top universities are likely to only grow access to post-baccalaureate education. The number of MOOC-based degrees is approaching 100, up from just a handful a year after my book’s publication. In addition, our recent research with corporate HR and learning leaders also suggests a more fluid and modular future, based on the trend toward digital microlearning and the adoption of platforms that aggregate courses, learning experiences and credentials from a range of sources. Employer acceptance of credentials earned online has also grown steadily, according to our most recent research—reaching more than 70 percent in 2021, up from 61 percent in 2018 and 40 percent in 2013. This trend, too, has seen a jump forward due to the pandemic.
Innovation in the lifelong learning and professional education space has also taken the form of bootcamps – which were relatively new on the scene in 2016. Positioned by many as challengers to university degree offerings, this delivery model was predictably co-opted by brand-name universities – including Penn, UC Berkeley, Northwestern, the University of Cambridge, and countless others – by partnering with enabling firms. Online education services companies – or “OPMs” as many refer to them, have continued to play a major role in the scaling of online higher education, within, and now increasingly beyond the U.S.
One dynamic that I never dreamed of: the acquisition of struggling for-profit colleges by non-profit (and especially public) universities, such as the examples of Purdue and Kaplan University in 2017 and the University of Arizona and Ashford in 2020. At minimum, this is a signal of a higher education market that is in the process of being fundamentally reshaped.
It's Still the 'Wild West' in Some Respects
Despite these developments in credentialing innovation, there is still a major need for standards, infrastructure, thoughtful policy, innovative experiments and research to support the development of an ecosystem of quality credential offerings.
In the years since 2016, I’ve had the privilege of contributing to and learning from a number of initiatives and projects in this space – the Lumina-sponsored Connecting Credentials campaign; the launch of the Non-Degree Credentials Research Network; the development of UPCEA’s Hallmarks of Excellence in Credential Innovation, and so much more. It’s been fascinating to hear from university and government leaders and entrepreneurs from around the world who are all excited about this topic. And it’s certainly helped anchor my columns for EdSurge.
All kinds of new credentials are proliferating, but they aren’t guided by any consistent central framework, and they aren’t yet necessarily “compatible” in ways that can truly reshape job acquisition or degree attainment. In an increasingly global and digital higher education market, the challenge ahead goes well beyond any one institution, accrediting region, market segment, or even one country. UNESCO for example recently convened an effort to “move toward a common language on microcredentials. And the European Union, numerous individual countries, and various NGOs – as well as industry groups and educational leaders in the U.S. – are hard at work on standards frameworks.
Whether it is 2016, 2021, or 2030, college and university degrees are not going away anytime soon – but the role and value of educational credentials in the job market, the forms through which they are earned, and the value demanded by students is continuously evolving. The COVID-19 pandemic launched the world economy – and the postsecondary landscape – into a new era, and there is exciting work ahead to continue innovating and documenting developments in this space.
