In recent years, short-term credentials (also known as “microcredentials” or “postsecondary programs and certificates … which generally take one year or less to earn”) have gained traction among students wishing to gain some of the benefits of higher education without the costs of a four-year degree. With over a million microcredentials available to students across the country, it’s unsurprising that so many have turned to this seemingly cost-efficient option. But are microcredentials worth it? A recent report by the Education Trust suggests that there isn’t a clear answer.
The report considers associated costs like tuition, housing, food, and transportation to calculate the cost of attendance (COA) of almost 19,000 microcredentials across the country. These programs vary by provider (academic or workforce) as well as by type (“certificates, licenses, digital badges and apprenticeships,” etc.). The authors make several findings about the costs of short-term credential programs.
There is considerable cost-of-attendance variation among different types of short-term credentials. First, there is considerable COA variation among different types of short-term credentials. For workforce certificate programs, the median COA per month was “$2,552 during an academic year and $2,868 during a calendar year”; for academic programs, it was “$2,112 in an academic year and $2,094 in a calendar year.” Outside the median, monthly tuition and fees ranged from $0 to $26,700 for workforce programs and $0 to $17,900 for academic programs. This variation can be attributed to a number of factors, including program type, materials, and length.
Program providers also play a role in COA variation, with academic programs often having higher tuition rates than workforce programs. For example, the authors compared two programs with COAs of around $5,000 per month and found that the total tuition of the academic program was almost $2,000 more expensive: $8,171 versus the workforce program’s $6,320. One author of the report speculates that the mere possibility of students receiving federal financial aid for academic programs might explain why colleges tend to charge higher tuition for microcredentials.
Career outcomes are what really determine whether microcredentials are worthwhile. Location can also play a significant role in COA variation. The authors found that “the hourly program COA for obtaining a short-term credential often exceeds the minimum wage in most states.” In Wisconsin, for example, the per-hour cost of “every reported credential program” is higher than minimum wage. Similarly, because minimum wage varies significantly by state, location can play a significant role in program affordability. To illustrate, the minimum hourly wage is $16.66 in Washington and $7.25 in Texas, meaning that a student making minimum wage in Texas might need to work more than twice as many hours as a Washington student to enroll in a comparably priced workforce program. This finding is especially significant since many of the people seeking short-term credentials come from low-income backgrounds.
With many programs requiring such high COAs, are microcredential programs really worth it? The career outcomes after the completion of such programs are really what determine the answer. The study authors posit that “short-term credentials are worthwhile if they also lead to jobs that pay a premium above the high school diploma.” The question is, do they? Can students obtain jobs that pay well enough to support their families? Do these jobs have a “potential for wage growth” that makes up for the costs of the programs? Studies on the labor-market outcomes of short-term certificates have found mixed results, with “differing levels of [positive] returns, [though] others have found no impact … and some have even found negative returns.” But, in general, it seems as though longer academic programs tend to lead to better outcomes.
In certain fields, however, microcredentials can lead to significantly higher employment and wages. For example, a microcredential in IT can lead to wage increases up to $20,000. Needless to say, these programs can pay for themselves several times over. What’s more, increased state financial aid for certain programs has been shown to improve these programs’ completion rates and post-completion outcomes, with wage increases that make these credentials worth the investment. Currently, there is “bipartisan interest in extending Pell Grants … to higher ed programs less than 15 weeks long.” Such an increase in financial aid would allow more students to afford high-quality, short-term programs and eventually earn higher returns on their investment—at least in the short run. Of course, if the history of government dollars in four-year programs is any guide, such largesse would eventually drive up the cost of microcredentials for everyone.
The question remains, are short-term credentials worth it? The variation among program COAs means it’s hard to make definitive conclusions about the value of microcredentials as a whole. Instead, interested students must consider their individual circumstances, including program type, COA, opportunity cost, and career outcomes to determine whether a microcredential program is worth it for them. The possibility of increased financial aid and new research on microcredential outcomes means that more students will be able to make informed decisions about such programs in the future.
Sophia Damian is a student at Wake Forest University and a 2024 Martin Center intern.
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Sophia Damian
