While higher education has received a barrage of criticism about the value of the bachelor’s degree, non-degree credentials have been lauded for providing career-ready skills faster and cheaper. Seeing opportunity, institutions have rushed to serve this market.
But new research from Burning Glass Institute and American Enterprise Institute showed that just 12% of non-degree credentials delivered wage gains that they would not have received otherwise.
Has the luster of the non-degree credential market already started to wane? What should institutions know about this promising but unpredictable market?
Non-Degree Dominates the Credential Market
Eduventures previously reported that the non-degree boom is real for graduate programming, although the market size and interest in master’s degrees still outweighs many non-degree alternatives. Non-degree alternatives have even greater potential to disrupt the undergraduate market, as most non-degree programs take less than a year compared to the two-or four-year commitments for a degree.
Credential Engine, a non-profit focused on mapping the credential landscape, counted nearly 1.1 million total credentials in 2022 across higher education, secondary education, and non-academic providers. See this credential breakdown in Figure 1.
Figure 1.
Degrees account for nearly 240,000 credentials, which means that nearly three-quarters of the 1.1 million credentials are non-degree offerings. Noncredit credentials, which are not regulated by Title IV funds, are the most prolific. These include bootcamps, programs on MOOC providers (Coursera, edX, etc.), online course completion certificates (Udemy, LinkedIn Learning, etc.), and digital badges (Instructure, Edalex, etc.).
Ultimately, non-degree credentials (skills-focused) outnumber degree credentials three to one, and the gap has been growing. But while non-degree credentials have boomed, has prospect interest kept up?
Putting Non-Degree Interest in Context
Figure 2 shows interest levels in key non-degree credentials among undergraduate prospects (those with a high school diploma, some college- no credential, and associate degree holders) according to the Eduventures Adult Prospect Research™.
Figure 2.
Figure 2 shows that interest among adult prospects with only a high school diploma has surged between 2022 and 2024, with noncredit credential preference nearly doubling (13% to 25%). Notably, this increase did come at the expense of degree options: both associate and bachelor’s degrees have remained essentially flat during these years. This data indicates that the shift may be away from vocational and technical training (29% in 2022 to 20% in 2024).
This preference shift may result from perceptions of these credentials and the fact that noncredit alternatives are usually the quickest to complete. The National Student Clearinghouse reports that two-year public colleges have experienced annual growth in undergraduate certificate and diploma programs, also reflecting this shift.
For prospects with some college credit (and an understanding of the college experience), we see small increases in preferences for noncredit courses and certificates (8% in 2022,12% in 2024), vocational and technical training (20%, 22%), and undergraduate certificates (6%, 7%). While interest has grown for these non-degree alternatives at the expense of degrees, the associate degree is still the most preferred credential (32% in 2024).
A Non-Degree Mirage?
New research from the American Enterprise Institute (AEI) and Burning Glass Institute (BGI) addresses outcomes of non-degree credentials. Assessing over 20,000 credentials evaluated across 65 million career records, they found that just 12% of credentials lead to significant wage gains that would not have happened otherwise. The best programs yield gains of nearly $5,000, improve upward mobility, and can help move people into aligned careers. The vast majority, however, are not delivering on key economic or career outcomes.
Additionally, a new report from Georgetown University’s Center on Education and the Workforce (CEW) reveals that the U.S. could expect an annual shortage of 712,000 certificates and associate degrees aligned with “high-paying middle-skills occupations” through 2032. These shortages fall into four occupation groups: blue-collar (360,800), management and professional office (253,000), STEM (87,500), and protective services (10,600).
A key drawback of the CEW report, however, is that it only accounts for official certificates and associate degrees reported to IPEDS, which includes a minority of the total credential landscape. There is no doubt that more nimble nonacademic providers will step in to fill this gap—even more than they already have.
Taken together, these reports underscore the potential for non-degree credentials to power our economy, but they also highlight the limitations of this market. Stronger, more systematic data transparency is needed. These programs should be intentionally designed to support career paths while raising awareness and providing education for those who may not benefit from traditional college routes, ensuring equity for every learner.
The Bottom Line
Following the rush to build new non-degree credentials, the collective reality is setting in about the quality of outcomes. The non-degree credential market has matured, with many moving parts for leaders to consider:
- Workforce Pell. New legislation, which will go into effect July 2026, will expand Pell eligibility to learners and workers who want to pursue a short-term job training program. This change could drive more interest in vocational and technical training programs, but noncredit programs were not explicitly excluded.
- Financial Value Transparency/Gainful Employment Update. While agreed upon during the Biden administration, new Gainful Employment reporting for the first year was delayed until this month. New rules extend to all institutions’ non-degree offerings that are Title IV eligible, which could push some institutions to reevaluate whether they should be eligible for Title IV funds.
- State Opportunity Index. The Strada Education Foundation provides a snapshot of which states are making progress and falling short in creating outcome-driven education-to-career systems. One item in the state opportunity index is the availability of data on non-degree and noncredit programs.
As markets evolve, they typically segment to address the unique requirements of distinct audiences, and the nondegree market is no exception. For instance, a bachelor’s student may choose to enhance the curriculum with an undergraduate certificate to fulfill elective credits; a working professional may seek to stay updated and acquire new skills; and someone looking to change careers may pursue specialized credentials.
A nondegree strategy remains an important way to build better outcomes, attract a new audience, and become more skills focused. While many institutions use nondegree credentials to experiment, it’s critical to understand your audience and what they expect to achieve with your program.
