Opportunities and threats of alternative credentials

Stackable certificates, microcredentials, and MOOCs 2.0—among a plethora of alternative offerings—are evolving quickly, engaging a growing share of post-baccalaureate learners. Continuing education leaders are concerned that traditional approaches to alternative degrees are being disrupted, potentially replaced altogether. But college and university leaders are also looking to the market for revenue growth and diversification.

In fact, a recent survey of adult and grad leaders showed over 70% believe alternative credentials will help them meet their revenue goals. To maximize the market opportunity and minimize the disruption presented by alternative credentials, institutions will need to rethink both their investments in and approaches to post-baccalaureate programs. We recently held a roundtable, Demystifying Alternative Credentials and Providers: Opportunities and Threats, to discuss these issues with higher ed leaders. Explore the takeaways below or jump to the next steps.

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The alternative marketplace is intensely crowded

51% of the nondegree credential market is controlled by nontraditional providers. For higher ed to be competitive, institutions must avoid competing on price and speed and instead focus on value, quality, and career outcomes.

Learner demand differs from traditional degrees

Demand is greatest outside North America, drawing experienced learners. And while fast-growing, the alternative credential market is relatively small from a monetary perspective. To effectively serve this market, institutions must identify consumer segments that have been overlooked or priced out by traditional degrees.

Alternative credentials should not be viewed as a standalone student access initiative

Lower priced and faster alternative programs still require additional aid and resources to move the dial on student access and equity. Institutions should integrate alternative credentials into their DEIJ strategic plans and provide adequate infrastructure to the access and success dimensions.

High learner acquisition costs and expensive infrastructure costs impede an accessible and sustainable business model. For most institutions, alternative credentials are best used as a top-of-funnel recruitment strategy for degree programs where the ROI for institutions and students are the highest.

Program demand is highly concentrated in two fields

75% of the alternative credential market is concentrated in business and technology. These fields are the most saturated and competitive with high barriers to entry for new providers. Institutions looking to compete in these spaces will need to make sure their offering is unique and sufficiently differentiated.

Higher ed is best positioned to carve out a premium market niche

Cross-discipline and high-intensity applied skills in emerging fields are the best bet for most institutions. Healthcare and education are the two fields with the greatest opportunity for new alternative credential growth.