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The Case for Alternative Credentials: Identifying and Avoiding Hurdles to Innovation

The EvoLLLution | The Case for Alternative Credentials: Identifying and Avoiding Hurdles to Innovation
Though higher education institutions currently have a monopoly on credentials, they need to be prepared to adapt once the bubble bursts.

For decades, the higher education credentialing system has been a monolithic edifice impervious to alternatives. Associate, baccalaureate, master’s and doctoral degrees reign supreme. Higher education institutions and other providers have developed certificates, CEUs and a smattering of other credentials, but few have any market value. Generally, these alternative credentials fall outside the domain of the accreditors and thus are not open to financial aid, leading to them simply falling short of the weight and legitimacy of the traditional degrees.

As we proceed through what seems to be a genuine paradigm shift in higher education, talk about the need for alternative credentials has reappeared, and there is reason to believe that institutions should listen. The technological innovations, especially those of the past five years, have shown that information and instruction can be and in many cases is free. The price of access is a smart phone or computer; the data is open and available to anyone who wants it. Despite what you might think about Massive Open Online Courses (MOOCs), one thing is clear: no one has to pay to take a class anymore, and building a future budget model on the basis of selling instruction is likely to be a losing proposition.

So why don’t all students take MOOCs and get their educations for free? There are several reasons. First, MOOCs don’t lead to degrees, and degrees continue to be what people want because most employers use degrees to easily segment candidates for jobs. Second, higher education has been a highly protectionist industry, guarding its processes and turf and refusing to recognize as academically legitimate anything other than what it deems worthy, and the only thing it deems worthy is what it has been doing for decades. Third, federal regulators and accreditors fiercely support and protect higher education and its current practices. Just consider the criteria for satisfactory academic progress (SAP) for federal financial aid or the role of faculty and who counts as faculty for accreditation. In brief, students can’t use MOOCs or other free information to get degrees because higher education does not allow it and regulators support higher education in that refusal.

It seems, however, that higher education’s monopoly on credentials might be in danger. The threats come on two fronts. From the traditional academic side, higher education associations are beginning to behave like quasi-accreditors, reviewing courses offered outside of the sanctioned process and giving them their own stamps of approval. Since the associations are associations for higher education institutions led by executives who have distinguished higher education pedigrees, the associations are able to develop processes to legitimize courses that otherwise would not be considered legitimate by the higher education institutions themselves. The American Council on Education (ACE) is a prime example of an association that reviews unaccredited courses, determines the ones that seem equivalent to traditional accredited courses, and supports transfer processes into and between institutions. Along the way, ACE makes a bit of money doing this.

The second and much more dangerous threat to higher education comes in the form of disruptive innovation, to borrow Clayton Christensen’s phrase. “A disruptive innovation gains traction by initially offering simpler, more affordable, and more convenient products and services to nonconsumers, people for whom the alternative is nothing at all.”[1] Badges, professional certifications, and any other credentials that are recognized by industry as legitimate shorthand for what a person knows and is able to do can be disruptive if they become widely accepted by industry, inexpensive and easily accessible. In other words, wide acceptance of alternative credentials would have an enormous impact on higher education if alternative credentials became commonly used for employment in lieu of degrees. The only things standing in the way of this happening are the employers themselves.

In a few industries, alternative credentials are already commonly accepted and in some cases even more valuable for employment than degrees. The IT industry is an obvious example, and Microsoft certifications, along with an array of programming certifications, can make quick entry into a job. Because the IT industry evolves rapidly, short, specialized credentials are much more effective at conveying current skills and abilities than general degrees. In addition, specialized credentials can be acquired very quickly in weeks or months, so they can be continually renewed and updated. In other words, in a rapidly changing world with rapid changes in what employers need, alternative, short credentials can be much more effective ways to remain employed than degrees that require years of study.

Fortunately for higher education, employers have not united around employment sectors and created an array of credentials that they will accept—and perhaps even offer—as criteria for employment. But imagine that in recognition of the above, the U.S. Department of Education brought together industry leaders and developed a process by which alternative credentials could be easily identified and standardized so that it was clear what holders of those credentials know and are able to do. Imagine, too, that Congress approved the use of title IV funds for these alternative credentials and instead of connecting learning to time spent on task and connected learning to evidence of mastery. There would be no need for higher education to have a monopoly on certifying mastery, especially if industry created rigorous standards, and providers of alternative credentials could be anyone able to help students achieve mastery.

It is true that in the imaginary scenario above recipients of the alternative credentials would not be exposed to the depth and breadth of knowledge and information to which traditional degree holders are exposed, and arguably this could have negative social impacts in the long run. However, given that only 39 percent of Americans have college degrees now, and the Obama administration, the Lumina Foundation, and others argue that the U.S. needs 60 percent of Americans to have degrees or some kind of higher education credential by 2025 or sooner to keep the U.S. globally competitive, alternative knowledge-based and skills-based credentials could significantly support the global competitiveness goals and provide much more nimble means for continued and focused learning for the workforce than traditional degrees.

For now, the protections of the regulators are keeping higher education in its safe bubble. However, many are beginning to stick pins and needles into that bubble, and given the need for more evidence of applicable knowledge, higher education would be well served to move beyond traditional credentials, lead conversations with industry about helping the workforce become more nimble, and take a much more proactive role in expanding alternative forms of educational credentialing.

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[1] Michelle Rhee Weise and Clayton Christensen, Hire Education: Mastery, Modularization, and the Workforce Revolution. Clayton Christensen Institute for Disruptive Innovation, 2014.

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