Credentials of value 101: Stacking the credentials

Our prior two blogs on credentials of value provided recommendations on how the state can ensure the new HB 8 formula that rewards credential of value completion leads students to options proven to meet employers’ requirements for entry into an occupation with good wages.

This final blog on credentials of value focuses on how the state can encourage colleges to establish educational pathways that allow students to continually build on any previous education they may have completed. This will help students keep their knowledge and skills updated and relevant to evolving job demands in the modern economy.

Credential Levels

Building on our previous blog on credential linkages, the state must adopt mechanisms allowing HB 8’s funding formulas for credential attainment to push for lifelong learning.

There should be a balance ensuring Texans go on to earn the credential delivering the best return on investment available in their career path while simultaneously equipping them with the knowledge and skills they need along the way. A strong strategy to achieve this would be to adopt varying rates of financial incentives that stairstep up accordingly with different levels of credentials in order to incentivize the creation of coherent sequences of credential milestones.

COV blog series stackable credential graphic

Several Texas community colleges are already adopting institutional policies supporting stackable credentials where credits from shorter-term credentials like skills awards count toward higher-level credentials like degrees.

This work requires reviewing the competencies taught in one credential program and determining that they satisfy the competencies required by the higher-level credential program. This allows students to pick up credentials validating their current competencies as they pursue their ultimate credential.

Credential milestones: how students benefit

There are substantive benefits for students unlocked by these pathways offering credential milestones.

First, students have multiple opportunities to obtain a credential that they can present to employers verifying that they have certain knowledge and skills. This is particularly important in Texas where there are 2.6 million individuals with some college but no credential, which makes it difficult for them to prove that they are qualified for certain jobs.

Second, these pathways allow colleges to insert additional value into credentials which may lag others in workforce value. Preliminary state analysis of higher education program categories finds that there are some programs that may not provide value as reliably as others.

For example, 96% of students with a Physical Science associate degree surpass the state’s minimum value threshold to be considered a credential of value, while only 66% of students with an Arts associate degree do the same. Credential milestones allow colleges to embed relevant credentials teaching in-demand skills into pathways that need a boost in workforce value — in the case of Arts, this could mean a digital marketing microcredential.

Credential milestones: considerations for colleges

There is a lot of potential for community colleges to adopt credential milestones policies. Texas 2036 analysis of available credentials data from community colleges revealed that 99% of the 124,675 credentials awarded in 2021 were associate degrees or level 1 or 2 certificates. HB 8 incentives for all credentials of value should help support colleges expand the availability of those other types of credentials.

However, the state should ensure that students are not funneled exclusively into only completing lower-level credential programs. While many non-degree credentials, like phlebotomist certifications and vocational nursing certificates, allow for entry into specific occupations, these graduates have opportunities to pursue even further education for higher level, and often better paying, jobs.

If colleges receive the same financial reward for providing a student with a lower-level skills award as an associate degree, the state risks disincentivizing programs aligned with jobs requiring more intensive skills. A simple solution for this would be to adopt varying financial incentive rates for different levels of credentials. This has a double benefit of providing colleges with financial rewards for incorporating credential milestones while still prioritizing the attainment of higher level credentials like associate degrees.

This concludes our deep dive into the topic of credentials of value. The community college finance blog series will continue in the coming weeks with additional blogs exploring the remaining outcomes outlined in the new funding formulas — successful transfer of students and dual credit completion.

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