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Keeping it a stack: stackable credentials aren’t all that

Yesterday, I wrote about persistent declines in community college enrollment and the difficulties of competing with four-year universities. Four year universities are already swiping students from community colleges via the Common App, eliminating SAT scores as an application requirement, and developing full-tuition (or near full-tuition) grants for students from low-income households. Stackable credentials, the community colleges’ answer to this pressure, aren’t working.

If you’re not familiar with so-called stackable credentials, they’re short-duration training courses that range from a few hours to a few weeks. They usually result in a certificate of some sort. The idea is that the student can “stack” or link complementary short-duration courses to create a perfectly tailored credential.

So, the problem with stackable credentials is that they don’t work as advertised, and they might not work at all. Researchers at Columbia University looked at the market value of stackable credentials and concluded that neither students nor employers could discern the economic value of stackable credentials.

Few people stack credentials; in fact, fewer than 2% of working people took this approach to assembling a credential. However, stacking is not simply just earning a bunch of certificates. It is the deliberate completion and ordering of credentials to compound the value of the entire stack. The idea is that each credential will boost an employee’s worth and increase his or her earnings. Each credential in the stack has discrete economic value.

It’s also important to note that a stack could combine a certificate with an associate’s or bachelor’s degree. A stack might also include some form of licensure, even though a license (by itself) does not involve any post-secondary credits.

Stackable credentials don’t show economic benefits

Stacking credentials isn’t easy. For example, some people may complete a certificate, and then go on to complete an associate’s degree. That may or may not count as a stack. If the person went back to school and earned an associate’s degree because the certificate alone did not have meaningful impact on the earner’s salary, that fails the “stack test.” Each element of the stack has to have a discrete economic benefit.

Currently, certificates in healthcare fields generate the best overall return. However, the value of a certificate falls over time. This could be the result of licensure changes, or replacement credentials. A replacement credential replaces (rather than augments) the value of a certificate in the stack. (A replacement credential could render the stack moot.)
The Columbia researchers examined study subjects who were between 12 and 16 in 1996. By looking at their 2013 earnings, they concluded that the only credential that had any positive impact on earnings was a bachelor’s degree.


Stacked credentials don’t age well

Associate’s degrees, certificates and other sub-degree credentials had no meaningful economic effect that persisted 7-8 years after being granted. Only a bachelor’s degree retained it value.

That says a lot about why students are abandoning community colleges in droves. The community college’s reliance on the speed of entry into the workforce doesn’t provide long-term benefits to the earner. Over time, if a sub-bachelor’s degree credit “dissolves,” there is little to no reason to spend time at a community college.

Further, if the benefits of a certificate or degree programs are so economically defective that they require the holder to earn a higher-level degree to unlock economic benefits, it’s simply more cost- and time-effective to earn a bachelor’s degree.

The Columbia analysis showed that for male students, the combination of a certificate and associate’s degree was economically disastrous. The average annual earning gap for this deadly duo was nearly $30,000 per year. For female students, the most economically painful outcomes were a single certificate, and two certificates combined. Both of these results produced negative net earnings.

Low-income students can’t afford to gamble on the outcome of an investment of time and money in education. And with negative net earnings a real potential outcome, it’s not hard to understand why community college enrollment is dropping.

It’s also not hard to see why universities will use this to improve their enrollment numbers in the coming years.

Photo Credit: Dustpuppy , via Flickr