For more than a decade, the conversation about alternative credentials has often been framed as a contest: will short-term credentials replace the college degree, or won’t they? Every few months another employer announces it is dropping degree requirements, another platform launches a professional certificate, and another headline declares the bachelor’s degree obsolete. Evidence from the last two years suggests that the better question is more specific: which credentials actually change who gets hired, and how do they connect to degrees rather than compete with them?
A microcredential, for readers less familiar with the term, is a short, focused credential that verifies a specific skill or set of skills. It includes digital badges, industry certifications, and certificate programs that take weeks or months rather than years. A “stackable” credential is one designed to count toward something larger, such as a certificate whose credits apply to an associate or bachelor’s degree. That distinction is more important than ever before, for reasons I’ll explain below.
A Crowded Marketplace
The first thing to understand about microcredentials is that there are an enormous number of them. Credential Engine’s most recent count found 1,850,034 credentials offered by 134,491 providers, up from 1,076,358 in 2022. Those providers range from colleges and universities to online course platforms, industry associations, and state governments. Badges alone account for more than a million of those credentials. Certificates (486,352) and degrees (264,099) are the next two largest categories.
Growth of that magnitude is a sign of demand, but it also creates a problem. A working adult trying to decide which credential will improve her job prospects has almost no way to compare nearly two million options on cost, quality, or outcomes. More choice does not help learners unless it comes with better information. When I led APUS, an online university, the most common question from prospective adult students was a simple one: will this help me get a better job? For most of the credentials in that count, nobody can answer it with verifiable data.
The Hiring Data Tells a Different Story
The strongest argument for microcredentials has always been that employers are moving toward skills-based hiring. Job postings certainly suggest they are. The hiring data, however, tells a more sobering story.
In 2024, the Burning Glass Institute and Harvard Business School published the most rigorous study of the question I have seen. The researchers examined 11,300 roles at large firms. Their findings can be summarized in three points:
- Among roles where companies dropped degree requirements, the share of workers hired without a bachelor’s degree increased by about 3.5 percentage points.
- Only 3.6% of roles actually dropped a requirement during the period studied, so the net change in hiring of workers without degrees was just 0.14 percentage points.
- That translated to roughly 97,000 new opportunities out of 77 million annual hires, or fewer than one in every 700 hires in 2023.
The progress was also concentrated. Nearly all of the change in hiring occurred at 37% of the companies that removed degree requirements. For the others, the degree requirement disappeared from the job posting but not from the hiring manager’s thinking.
Does that mean skills-based hiring has failed? No. It means that removing a line from a job description is the easy part. The companies that actually changed their hiring built assessments, training programs, and internal career pathways that allowed them to evaluate candidates without relying on a diploma as a proxy. Most employers have not made that investment yet.
The Degree Is Not Off the Hook
None of this means the four-year degree is secure. The pressure on the degree comes from a different direction, which is whether graduates find jobs that actually use their education.
A 2024 report from the Strada Institute for the Future of Work and the Burning Glass Institute found that 52 percent of recent four-year graduates were underemployed a year after graduation, and 45 percent still did not hold a job requiring a bachelor’s degree ten years later. The report’s most important finding, in my view, is how “sticky” that first job is. Graduates who start in a college-level job rarely fall into underemployment, but 73 percent of those who begin underemployed are still underemployed a decade later. The financial consequences are significant. A graduate in a college-level job typically earned about 88 percent more than a high school graduate, compared with only about 25 percent more for an underemployed graduate.
That is where I believe microcredentials make their strongest case. The value is not in replacing the degree. It is in helping a graduate with a degree in history, psychology, or communications add a credential in data analysis, project management, or cybersecurity that gets them onto the first rung of a career ladder. I wrote about the disappearing first rung in a recent article, and I think it is the most urgent problem facing undergraduate education today.
Washington Weighs In
The most significant development of the past year is federal. The Workforce Pell Grant Program, often called “short-term Pell,” makes federal financial aid available for job training programs of eight to 15 weeks. Congress created the program as part of the One Big Beautiful Bill Act in July 2025. The Department of Education finalized regulations in May 2026 with an effective date of July 20, 2026, while allowing institutions to begin implementation as early as July 1.
This is a substantial change. Since their creation in 1965, Pell Grants have been restricted to longer programs, which meant that low-income adults who needed a short path back into the workforce had to pay out of pocket or find other funding.
What I find most encouraging is that Congress attached real accountability to the money. A program must have been operating for 12 months before approval and must show a 70% completion rate and a 70% job placement rate, and programs that miss those thresholds in two of three consecutive years lose eligibility. There is also an earnings test. A program’s published tuition and fees cannot exceed the “value-added earnings” of its completers, meaning their median earnings minus 150 percent of the federal poverty line.
Just as important for the future of degrees, programs must either lead to a stackable credential recognized by multiple employers, or prepare students for occupations that recognize only one credential. Students must also receive academic credit that counts toward a certificate or degree program. In other words, federal policy now explicitly rewards the model I have long advocated: short, job-relevant credentials with proven outcomes that stack toward degrees.
The early rollout will be modest. At this writing, only 21 programs have been approved nationally. Most observers expect only a few programs to qualify at launch, with more added as states and institutions build the data systems needed to prove outcomes. Governors, working with their state workforce boards, will decide which occupations are high-skill, high-wage, or in-demand, and therefore which programs are eligible. The approach will likely look quite different from state to state.
What Comes Next
The most likely forecast is not the collapse of the degree, nor the triumph of the badge. It is a gradual merging of the two. I expect community colleges and regional public universities to move fastest, since they already offer short-term workforce programs and serve the adult learners Workforce Pell is designed for. Institutions that already track job placement and earnings for their noncredit students will have a significant head start. Those that do not will find the 70/70 standard difficult to meet.
For employers, the lesson of the Burning Glass research is that announcing skills-based hiring is not the same as practicing it. The companies that succeed will be the ones that pair credentials with real assessments and internal training pathways.
For learners, the advice is simple. Before enrolling in any short-term program, ask how many students finish it, how many find jobs in the field, and whether the credits count toward anything else if you decide to keep going. A program that cannot answer those questions deserves skepticism, no matter how quick or inexpensive it is.
Final Thoughts
In short, microcredentials will not replace the degree, but they are changing what a degree looks like. The traditional model assumed a student would enroll at 18, attend continuously for four years, and graduate ready for a career. That model has not described most learners for a long time. What is emerging instead is a system in which a person can earn a short credential, go to work, return for another, and eventually assemble a degree along the way.
Workforce Pell, better credential data, and a small group of employers who actually follow through on skills-based hiring all point in that direction. The harder question is whether institutions can organize themselves around learners who come and go rather than learners who enroll once and stay. And that question could be the basis for a future article.
