Not All New Credentials Are Created Equal

A new report from AEI and the Burning Glass Institute offers a data-rich yet sobering diagnosis of modern credentialism. As Americans have sought faster, cheaper alternatives to traditional college degrees, policymakers have embraced short-term workforce programs, such as Career and Technical Education (CTE) initiatives, as a potential cure for student debt, underemployment, and an aimless public-education system. “Holding New Credentials Accountable for Outcomes” warns that, amid this credentials boom, the public risks spending billions on programs that promise economic uplift but deliver little more than slips of paper.

According to the researchers, just 12 percent of the 1.1 million “micro-credentials” currently on offer lead to significant wage gains, and only 18 percent give workers an advantage over similarly situated peers. While the best programs boost earnings by nearly $5,000 and meaningfully improve job mobility, most deliver negligible returns. In many cases, credential earners make only $1,200 more than non-earners, barely enough to offset program costs, let alone change one’s career trajectory.

Just 12 percent of the 1.1 million “micro-credentials” currently on offer lead to significant wage gains. The findings are as damning as they are disorienting. Programs offered by elite universities can underperform free online courses. Some “certifications” from big-name platforms yield no wage gains at all. Notably, prestigious organizations such as Stanford University and LinkedIn were found to offer programs in sought-after fields (e.g., project management and operating system security) that fail to “boost earnings meaningfully.” In real estate and nursing, by contrast, the best credentials significantly increase career-switching success, especially when those credentials are offered by nationally recognized boards.

The risk is that just-approved Workforce Pell Grants will subsidize ineffective programs with no guardrails to measure or ensure value. Despite the somewhat confusing nature of the study’s results, there are some clues that can help explain the variance between top and bottom credentials. Back in 2020, Burning Glass and ExcelinEd found that only 18 percent of CTE credentials were “in demand by employers.” This indicates that the relative quality of a credential may not be as important as the demand for a credential. In fact, the authors of the new AEI and Burning Glass study conclude that this lack of demand could be a driving factor in why some credentials go “unrecognized by potential employers.”

To put this “Wild West of Credentials” into perspective, one might look to the health-supplements industry. Walk into any drugstore in the country, and you will see bottles of pills lining the shelves, each promising energy, vitality, weight loss, muscle gain, and a whole host of other alleged benefits. Yet, unlike FDA-approved drugs, supplements face little oversight, no requirement to prove efficacy, and few consequences for misleading claims. Consumers are left to sift through branding, testimonials, and pseudoscientific jargon to decide what might work. For the average American, there is no mechanism for deciphering which “fat burners” actually induce weight loss and which ones are nothing more than deceptively marketed Tic Tacs.

The same dynamic applies to non-degree credentials. The explosion of programs, up 10 percent in the past year alone, has created a crowded, unregulated market filled with providers offering certificates that may not improve wages, job mobility, or promotions. The risk is not just that some learners will waste their time and money. It is that public funds, particularly through programs such as the just-approved Workforce Pell Grants, will subsidize ineffective programs with no guardrails to measure or ensure value. The federal government risks becoming an enabler of educational snake oil.

As traditional higher education loses public trust, new credentialing pathways promise efficiency, ingenuity, and alignment with labor-market needs, especially for those who would not be served by a traditional college education. But if these alternatives fail to deliver on those promises, they will not only squander taxpayer resources but will further disillusion a generation of Americans from the idea that every citizen has the capacity to climb the socioeconomic ladder.

To avoid that fate, policymakers must rethink how they evaluate and fund alternative credentials. The Burning Glass report makes a compelling case for outcomes-based funding. Credentials should be judged not by their marketing, length, or institutional prestige, but by whether they help learners get jobs, switch careers, or move up the wage ladder. Programs that meet this bar should receive support. Those that do not should be defunded. And policymakers must resist the temptation to treat “innovation” as inherently good without the evidence to back it up. After all, the lobotomy was once lauded as an innovation in mental-health care.

If policymakers want to build a viable alternative to college, they must be willing to do the hard work of distinguishing genuine value from faulty promises.

Sherman Criner is a junior at Duke University studying public policy, history, and political science and a 2025 Martin Center intern.