Pioneering Perspectives: Mapping the Uncharted Terrain of State Investments in Short-term Credential Pathways
by Stephanie Murphy, Ph.D.
Short-term credentials. Microcredentials. Sub-baccalaureate credentials. Non-degree credentials.
Whatever you want to call them, the higher education landscape is changing rapidly, and the role of short-term credentials is steadily becoming an important part of the conversation. It’s no secret that the job market is ever-changing, which has led to a significant rise in the demand for short-term credentials. These valuable certificates and micro-degrees are excellent tools for enhancing individuals’ career prospects and meeting the evolving demands of the modern economy.
In response to these changes, states are paying attention. A great many have stepped up to the plate by investing in alternative credential pathways for their residents. Some states are providing tuition relief directly to students in a bid to make higher education more affordable and reduce student debt. Meanwhile, other states have opted to fund institutions to support capacity-building for program development. This ensures that institutions receive the resources they need to create and maintain a wide range of short-term credential programs that meet the needs of local economies. And other states are incorporating short-term credentials into their funding formulas, which lends further recognition and financial support to these programs.
The “wild, wild west.” That’s another phrase that frequently pops up in conversations about higher education, especially when talking about policy innovations. It is particularly prevalent in the context of the short-term credential landscape. The rapid expansion of sub-baccalaureate offerings also has led to a noticeable lack of consistency and capacity at the state level to define, evaluate, and track the quality, equity, and impact of these programs.
Until now, that is. At HCM Strategists, with support from Lumina Foundation, we undertook a comprehensive examination of short-term credential pathways across the U.S. In our deep dive, we analyzed all 50 states to create a thorough catalog of direct, sustained state investments in short-term credential pathways nationwide.1 We organized our findings using a typology that captures these state investments along several key benchmarks, including (see Figure 1):
Whether and how states clearly define short-term credentials to help establish a consistent understanding of these programs;
Whether policies are equity-centered in design and delivery, ensuring that diverse populations have equal access to these valuable learning opportunities;
Revenue sources and sustainability to understand how states allocate funds and maintain ongoing support; and
Whether states commit to an assurance of value or quality, demonstrating a dedication to providing impactful, high-quality programs to learners.
FIGURE 1: SUMMARY OF HCM’S SHORT-TERM CREDENTIAL TYPOLOGY
What did we find? Let’s dive right in! Our research identified 55 state-led initiatives across 28 states. The majority (28) of these directly fund students, while a dozen more fund institutions to increase their capacity to offer student supports and/or tuition relief.
One such student-focused initiative is Louisiana's MJ Foster Promise Program, a last-dollar promise program that covers tuition and fees up to a maximum of $6,400 per academic year. To be eligible, students must meet certain income or employment criteria; they must have a family income of 300 percent of the Federal Poverty Level or below or have been un/under-employed for at least six months prior to receiving the grant. Recipients must also commit to annual 20 hours of community service, internships, or mentorships to maintain eligibility.
The Virginia New Economy Workforce Grant Program exemplifies an initiative that funds institutions to provide student supports. Established in 2016, this pioneering program uses a pay-for-performance model for funding non-credit workforce training that leads to credentials in high-demand fields. Institutions are required to submit student-level data to the State Council of Higher Education for Virginia (SCHEV) for analysis, which in turn ensures transparency and accountability in an otherwise unregulated sector. In FY 2022, a record number of students enrolled in eligible programs, completed their training, and obtained their credentials or licenses. This growth is particularly significant given the recent decline in enrollments in for-credit academic programs at Virginia Community Colleges.
When it comes to funding sources and sustainability, most initiatives (19) are funded using the state's general funds, and 8 initiatives are included in the state's formula funding model. Eleven initiatives used federal Covid-19 relief dollars for one-time programs, raising concerns about their sustainability. Florida deserves recognition for successfully transforming its one-time Covid-funded initiative — the Rapid Credentialing Grant — into a long-term program called the Open Door Grant Program. This program funds student completion of short-term, high-demand credit and non-credit CTE programs and resulted in a 7% increase in completion of rapid credentials from 2018-2019 to 2020-2021.
Out of the 55 initiatives, 23 include an "equity component" targeting specific populations. While most focus on students with financial need, some support other groups, like Illinois' Workforce Equity Initiative that expands short-term training opportunities for minority students in at-risk communities.
Despite these efforts, our research reveals a lack of consistency and capacity at the state level to track the quality, equity, and impact of these programs. However, one shining example of a strong data collection system is Iowa's Department of Education, which has been refining its process since 1999 and now provides in-depth analysis and regular reports on noncredit program participants and outcomes.
As we move forward, we will continue to develop resources and tools from our findings that can help inform and shape the ongoing development of state investments in short-term credential pathways — ultimately benefiting students and states alike and contributing to a brighter future for higher education.
1] This blog post serves as a preview of the material to be covered in a forthcoming comprehensive report and accompanying data tool, which HCM will release soon.
