Holding Credentials Accountable To Outcomes

Amid escalating college costs, mounting student debt, and rising college graduate underemployment, students of all backgrounds increasingly question college as a path to economic mobility. As confidence in traditional higher education declines, interest grows in alternative pathways that offer targeted training and faster routes to meaningful work. These options include high school career and technical education (CTE) programs and short-term adult training courses proposed for Pell Grant funding expansion, both seen as vehicles for rapid skill acquisition, flexibility for learners juggling work or family commitments, and promising pathways for adults seeking to reenter or advance in the workforce.

However, enthusiasm alone cannot obscure the risks. Yet while the potential is significant, so is the risk of wasting learners' time and taxpayer dollars on credentials that don't pay off. This risk grows in a system where over 1.1 million different credentials are now on offer but with minimal oversight to separate value from empty promises. The result is a marketplace where the prevalence of options far exceeds the availability of reliable information.

A Market Flooded With Credentials but Thin on Results

The analysis reveals a stark truth. Only about 12 percent of credentials deliver significant wage gains that earners wouldn't have otherwise gotten, and just 18 percent of credential earners are likely to see wage increases their peers didn't enjoy. Despite this, millions of adults invest time, money, and hope into programs that ultimately fail to improve their economic standing.

At the same time, the upside of high-quality credentials is unmistakable. The right credentials can be transformative. Compared to bottom-tier options, credentials in the top decile yield annual wage gains of nearly 5000 dollars, increase career switching success sixfold, and boost the probability of promotion in the earner's current field 17-fold. These outcomes demonstrate what effective program design can unlock for workers across age groups and backgrounds.

Such programs also help advance equity. These top credentials can serve as effective pipelines into skilled professions, leading roughly half of earners into new jobs by equipping them with in-demand skills, and have demonstrated the power to close long-standing income gaps, particularly for historically underrepresented groups. Black and Hispanic women who earn high-value credentials, for example, experience wage increases of 10 percent or more.

Why Evidence Is Necessary for Funding

To identify the programs that produce genuine economic returns, it is necessary to examine outcomes across millions of careers. To fund transformative credentialing programs effectively, it is crucial to leverage large datasets that offer the opportunity to observe empirically the economic returns of credentials across millions of careers. Such analysis enables policymakers and institutions to evaluate the outcomes that specific credentials yield across an array of metrics and to distinguish programs that advance workers from those that do not.

This question is urgent because the policy landscape is shifting. A pressing question is whether and how government funding should support alternative pathways to economic mobility. While Pell Grants have fueled the expansion of America's college-educated workforce, public trust has weakened and Gallup polling showing a 20-point drop over the past decade illustrates skepticism toward traditional degrees.

Shorter programs are gaining attention. The proposed Workforce Pell aims to support programs lasting eight to 14 weeks, expanding access to practical training. The need is real, given that 60 percent of working Americans don't have a bachelor's degree and 77 percent of recent high school graduates either don't enroll in college, don't complete their degree, or fail to land a college-level job. Yet quality definitions remain vague. The problem lies in defining what constitutes a valuable credential. In many cases, a credential is simply a provider's assurance of mastery or even, merely, completion. Standards such as those in the Perkins Act, which require credentials to be industry-recognized, offer little guidance on the level of employer demand necessary to meet this standard.

The Wild West Environment

The credential boom continues unchecked. The world of credentials has experienced a Cambrian-like explosion: Credential Engine counts 1.1 million credentials currently on offer, a 10 percent increase in the past year alone. At the same time, completion of short-term certificates grew by a third from 2013 to 2023, reflecting a significant shift toward nondegree training. This explosion raises the central problem. But how many of these offerings help their earners launch their career, move up in their field, or switch to a new occupation? Without strong data, learners face uncertainty and policymakers lack the evidence needed to allocate resources responsibly.

Understanding What Actually Works

The value of different credentials has long been opaque. Until now, the value of different credentials has been an enigma wrapped in a riddle. Program features reveal little about real outcomes, making an outcomes-oriented lens essential. Earlier research found that only 18 percent of CTE credentials were in demand by employers, highlighting why better evaluation is needed. To address this, the analysis focuses on three questions. Will the credential increase the earner's wages. Will the credential facilitate a career switch they have been considering. Will the credential help them advance in their current field.

The findings show dramatic variation. Wage gains are only one metric of a credential's value, yet they illustrate the differences clearly. The top 10 percent of credentials provide an incremental earnings boost of nearly 5000 dollars annually after just one year, while the average credential earner earns only 1200 dollars more than their peers. Career switching results vary equally widely. Successful transitions are not a given. Bottom-tier programs produce only a 3 percentage point bump, while top credentials yield a more than sixfold increase. Advancement within a field is inconsistent as well. Few credentials are effective for workers looking to move up in their field, and even the top performers offer modest boosts.

Toward Accountability and Evidence-Based Funding

The rapid growth of the credential marketplace, including 108,000 new credentials, raises concern that providers may be underinvesting in quality assurance. Without data, unproven providers can easily launch programs and advertise them to learners, creating significant risk for both individuals and public funders. This makes the final insight essential. Any new funding for nondegree credentials must be undergirded by a rigorous data-driven evaluation of efficacy. Only by examining whether credentials help earners earn more, switch careers, and move ahead, and whether employers value them, can funding support programs that deliver real economic mobility.