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From Workforce 2024 Guide

How to Expand Short-Term Credentials

There’s new money for job training, but let’s be sure it’s going to the right places — and people.

Short-Term Credentials
Photo: iStock
by Chauncy Lennon and Kermit Kaleba

e may be on the cusp of a fundamental shift in how jobseekers can access and pay for valuable short-term workforce credentials, one that emphasizes community colleges and other speedy alternatives.

More states are seeking to establish or expand investments in short-term credentials and establish quality criteria for non-degree programs. Congress, meanwhile, is actively debating expansion of the federal Pell Grant program to include shorter credential programs. 

With that in mind, it’s time to take a close look at what’s working with these investments and to identify gaps or challenges facing policymakers, institutions, students and other stakeholders that may limit their effectiveness.

According to a recent analysis from HCM Strategists, states are investing nearly $4 billion a year in financial aid for short-term workforce credentials. For state policymakers, these investments are often viewed as a key strategy for addressing workforce gaps while also ensuring more equitable access to programs that often do not qualify for federal financial aid or traditional state aid programs. 

However, most of the programs identified by HCM have been established within the last five years, including some that were initially created with federal pandemic relief funds. As a result, we do not have a clear sense yet of whether these state programs are leading to positive education and labor market outcomes for learners, or whether there are best practices in program design that can support better outcomes. 

These state investments in short-term credentials are substantial. For perspective, the main federal workforce training program provides only $2.3 billion per year for adult learners.

Existing programs are being refortified and new collaborations are emerging, including partnerships with organized labor and community colleges. The AFL-CIO Working for America Institute and Biden-Harris administration offer best practices and examples here of what can happen.


Short Term Credentials-1

Photo: iStock


Industries are taking a serious look at how to marry their strategic goals with the aspirations of employees. PepsiCo’s Global Learning Center of Expertise (COE) offers a range of curriculum and skill development, including a debt-free education for U.S.-based employees. The company says this work extends employee retention, increases worker productivity and leads to long-term success.

And there is continued investment at the community college level that offers “stackable” credentials to students. In Ohio, they’re tracking educational and career progress. 

Lumina Foundation supports expanding access to high quality, non-degree credential programs, including through increased state investments in financial aid and other student supports. We believe that states should consider the following questions as they look to expand opportunities for students, especially students of color.

Expanding Access

States should help more students get the financial assistance and other aid they need to attain valuable non-degree credentials, perhaps by directing increased funding to those programs. This obviously benefits the students, but also provides critically needed talent for employers and leads to greater economic growth. 

While we have good information about how much states are spending on short-term credentials, we don’t always know how many students complete their training or get jobs, or whether the programs supply the workforce talent most in demand. We believe that states should invest in data collection strategies that allow for evaluation of program outcomes and continuous improvement, with a particular focus on ensuring that adult learners of color have access to high-quality credentials. 

Relatedly, while the investments are significant, many of these programs are paid for and administered outside of more traditional higher education funding streams and are cumbersome for institutions or individuals to navigate. States should consider ways to communicate the availability of tuition assistance and other supports and work with institutions to make sure students get the help they need.

State investments in short-term credentials typically include tuition assistance, but students need more help to be successful. Particularly for learners who are low-income or face barriers to education or employment, states should consider extra support services such as advising, food and other basic needs. This is especially important for part-time students with jobs, families and other challenges. 

Awareness is key. While some state programs cannot keep up with demand, others appear to be underutilized due to lack of awareness on the part of institutions and students. States should consider ways to communicate the availability of tuition assistance and other supports and work with institutions to ensure adequate distribution of resources to support learners in these programs. 

Enhancing Quality  

Short-term credentials vary widely in terms of educational and employment outcomes. States should seek to establish minimum criteria for credentials to qualify for state financial aid. National Skills Coalition has worked with 11 states to set statewide quality assurance standards for non-degree credentials, which can serve as a foundation for state policymakers.

States should also consider the potential for adult learners to continue their educational journey beyond their initial credential. While short-term credentials can be a crucial entry point to higher education for so-called “non-traditional” students, evidence shows that a significant percentage of learners do not continue on to degree pathways after obtaining their credential, and results for learners of color are mixed. To maximize future education and employment opportunities, states should encourage the pursuit of credentials that “stack,” or lead to even more valuable certifications down the line. 

Promoting Equity

Data suggests that learners of color are less likely to see economic or educational benefits from short-term credentials. Workers of color are more likely to enroll in programs that lead to less remunerative credentials and see worse employment and earnings outcomes than their white counterparts with the same credentials. States should collect disaggregated data on program participants and establish policies or processes that address disparities in access and outcomes for learners of color. 

States should also ensure that institutions leveraging financial aid to expand short-term credentials have adequate capacity to serve historically disadvantaged workers and learners. States should also create expectations that institutions and employers create meaningful opportunities for workers of color, including career pathways within companies and industries that lead to greater economic mobility.

High-quality, short-term credentials make up a growing share of the educational mix that powers our state economies. About 8% of people between the ages of 25-64 have a certificate or certification as their highest level of educational attainment. 

As we seek to grow these opportunities, it’s critical that we target investments in these credentials in a manner that is effective and equitable. We look forward to working with states and other stakeholders to grapple with these tough questions and create a higher education landscape that supports all pathways and all learners.

Chauncy Lennon is vice president for learning and work, and senior strategy adviser for Lumina Foundation. Kermit Kaleba is the foundation’s strategy director of employment-aligned credential programs.


Chauncy Lennon is vice president for learning and work, and senior strategy adviser for Lumina Foundation. Kermit Kaleba is the foundation’s strategy director of employment-aligned credential programs. 


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