When a Degree Is Just the Beginning

The idea of students graduating from college with just a diploma — a single academic credential — could soon seem downright quaint.

At some institutions, it already is. Community colleges in North Carolina encourage students to complete coursework while earning certifications from industry groups like the National Institute for Metalworking Skills and the National Aviation Consortium. At Lipscomb University, students can qualify for badges, endorsed by outside experts, to prove they have mastered skills such as “Active Listening” and “Drive and Energy.” Students at Elon University get an “extended transcript” describing their nonacademic accomplishments.

Higher education is entering a new era, one in which some industry and nonacademic certifications are more valuable than degrees, transcripts are becoming credentials in their own right, and colleges are using badges to offer assurances to employers about students’ abilities in ways that a degree no longer seems to do. On top of the traditional academic and corporate players, a whole bunch of nonprofits and businesses are also jumping on — if not leading — the movement, including MOOC providers like Coursera and Udacity and so-called coding academies like General Assembly, Galvanize, and the Flatiron School.

The explosion in credentials is upending long-held notions about the value of a college degree. Many of these credentials are in digital formats that can be easily shared among students, educators, and employers in new kinds of e-portfolios or on commercial sites like LinkedIn. “The reason we’re so excited about them is that they contain claims and evidence,” says Daniel T. Hickey, an associate professor of education at Indiana University at Bloomington and an advocate of badges and other new forms of verifiable credentials. “What people don’t understand is: That is a game changer.”

It’s also a development laced with confusion. Among colleges, companies, and many other organizations, thousands of bodies now issue postsecondary credentials, in a variety of forms.

As Jamie P. Merisotis, president of the Lumina Foundation, has said, that has left a highly fragmented landscape with no system in place to assure the quality of those credentials. (That is a particular problem for the foundation; its “Goal 2025" is to increase the proportion of Americans who have earned “high-quality” degrees, certificates, and other credentials to 60 percent over the next decade, but it needs to know which ones to count.)

• View: NEXT: The Credentials Craze

  Chronicle subscribers get access to our full special report on the growing interest in alternative credentials. Not yet a subscriber? Sign up here.

As students flock to these new providers, investors, too, are taking notice. For those who might once have been captivated by the B.A.s and M.A.s awarded by for-profit colleges, “the trend is to get away from letters,” says Susan Wolford, a managing director with BMO Capital Markets. Companies involved with lifelong learning and “credentializing” are favorite targets for the mergers-and-acquisitions crowd, she says. That includes not just those trendy coding boot camps and MOOCs but also companies that offer training in sales skills or the energy field. Whether it’s a company that gives a credential or merely one that “brands the knowledge” it is offering, she says, “people are very mesmerized by the idea.”

In June, Lumina announced a campaign to make greater sense of the evolving practices and policies around the cornucopia of credentials. The campaign echoes the foundation’s Degree Qualifications Profile work, a project aimed at creating common reference points to define the intellectual skills associated with associate, bachelor’s, and master’s degrees.

The new effort includes grants to groups at universities and a nonprofit organization that are trying to create a “credential registry” for students and employers, and to develop a taxonomical framework to help categorize which credentials reflect what skills. Lumina has also called for a “national conversation” on credentials, to take place in part at a conference in Washington in October. Policy makers and academics will discuss ways to make the fragmented credential system more navigable. The foundation seems to have struck a nerve: About 80 associations, companies, and organizations have signed on as co-sponsors of its campaign.

With an education ecosystem that is increasingly featuring “lots of on- and off-ramps,” says Holly Zanville, the Lumina official heading its credentials project, “we’re going to need some better structures than we have now.”

Several forces are behind the newfound attention to credentials. One is the general interest in badges, which arose in online gaming and spread to higher education as more colleges began using digital portfolios. Another factor is higher education’s recent fascination with competency-based education, which, lacking the structure of courses, is well suited to use badges to determine how certain skills are defined and assessed.

An even more powerful force behind the credentials trend, however, is the so-called skills gap, or the apparent mismatch between the skills employers say they want in job candidates and what they see — or can’t see — in recent college graduates. Couple that with concerns about the cost of college and its return on investment, and what’s left, say observers, is a general unease about the value of a degree and what it signals to potential employers. “It’s unclear how great a signal it was before,” says Michael B. Horn, co-founder and executive director for education of the Clayton Christensen Institute for Disruptive Innovation, which studies innovation in education. Now the picture is even cloudier.

But at this stage, so is the picture for new kinds of credentials, he adds. The crucial factor that will determine the success of these new credentials, he says, is the assessment underlying them, and there, “the thinking about it still seems fluffy.”

Still, shifts in the job market have lent greater importance to credentials. “It’s the real change in the economy, which requires upskilling,” says Anthony P. Carnevale, director of the Center on Education and the Workforce at Georgetown University. But he warns that the value applies only to good credentials, which he, as an economist, defines as those that bring added earnings. And with people changing jobs more often, potential employees are recognizing that they need good credentials to get in the door and advance in their careers. Forget loyalty to your employer, says Mr. Carnevale: “You have to be loyal to your skills. You have to build a skill portfolio you can sell.”

The underlying ethos of the credentials movement — that “it’s all about the job” — may make many four-year colleges and even some community colleges uncomfortable. But that hasn’t kept several of them from experimenting with new types of credentials — in many cases aided by a burgeoning group of young companies like Pathbrite, Fidelis Education, and Parchment, which sell digital products that help students manage and communicate their skills and expertise. Gunnar Counselman, a founder of Fidelis, which also offers tools that colleges can use to build assessments that underlie their badges, says that until recently, his company’s services were a hard sell: “Five years ago, nobody believed the degree was insufficient.” Today, he says, more college officials are starting to say that degrees are necessary, but not enough.

“The whole skills gap,” says Mr. Counselman, “is the result of schools’ not understanding what employers need” and not creating the kind of curriculum modules that would translate to the workplace. Changing attitudes are fueled by frustration with the status quo. You go to school for 16 years, he points out, “and you get four freaking data points out of it": the name of the college, the name of the degree, the year it was issued, and maybe a GPA.

Lipscomb University, which is working with Fidelis, hopes to fill the information gap with badges that describe the “soft” skills its students have acquired, like communicating effectively and working in teams. Colleges tell students they’re getting training for life, but “we didn’t ever have any way of verifying that or quantifying that,” says Nina J. Morel, dean of the College of Professional Studies there. The badge program is “something more concrete,” she says.

Lipscomb, in Tennessee, has developed 41 badges based on employment-screening techniques developed by Polaris Assessment Systems. The badges will be digital elements of a competency transcript, she says, and can be added to students’ LinkedIn accounts and online portfolios.

It could be a long time before employers start demanding such evidence from graduates, acknowledges Ms. Morel, but “we want to make sure they have every opportunity and every tool in their tool box to convince an employer.”

In fact, for most employers, the college degree remains the key credential, so much so that a 2014 report by Burning Glass, a company that analyzes job ads, found that employers in many fields were requiring bachelor’s degrees for jobs that previously didn’t need them. (The exceptions were for fields, such as health care, in which there are good alternatives for identifying skill proficiency.)

But that may be changing. Recently. Burning Glass analyzed 20.6 million non-health-care job ads from a 12-month period, and it found that 20 percent of all posts requiring a bachelor’s degree also called for applicants to have a certificate or a license for a particular skill. That, says Matthew Sigelman, the company’s chief executive, suggests that employers see the college degree “as a minimum ticket to ride rather than something validating specific competencies.”

Burning Glass hasn’t seen much interest from employers in badges, at least not yet. “That doesn’t mean they don’t have value,” says Mr. Sigelman. But they’ll need to be externally validated, or carry their own brand, if they’re going to matter.

Certificates themselves are not all equal, either. Of the 20.6 million jobs analyzed, Burning Glass found 2.8 million requiring a certificate. But only certain certificates were highly sought. Of the thousands of possible certificates, the same 200 came up again and again. The Project Management Professional (PMP) and Certified Information Systems Security Professional (CISSP) credentials were among those that topped the list.

Those trends have not been lost on the North Carolina Community College system, which has been refashioning its curricula around more short-term, work-force-ready programs. Often, “industry credentials mean more to employers than the academic degree,” notes R. Scott Ralls, departing president of the system. That’s the reason, he says, that when his system’s colleges reconfigured 89 degree programs and collapsed them into 31, they took pains to build those programs so that most of them incorporated industry-certified credentials as steppingstones to the degree. When possible, the colleges prefer to use recognized, existing credentials rather than create new ones, says Mr. Ralls, who will become president of Northern Virginia Community College this month. “It’s about portability.”

But for subjects and fields that are not so easily certified, some experts predict that a proliferation of badges and expanded transcripts will occur, which means a lot more chaos before there is much cohesion.

“Badges without taxonomies, without some shared understanding, without rubrics, are meaningless,” notes Matthew Pittinsky, an assistant research professor in the school of social and family dynamics at Arizona State University and founder of Parchment, a credentials-management company.

But he argues that a system with richer credentials is ultimately a better alternative than one in which the “iron logic of the labor market starts to prescribe the makeup of the bachelor’s degree in a way that most academics would not be comfortable with.”

Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her new book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.