The Latest Developments in State Investments in Short-term Credentials: A 2024 Update
By Stephanie Murphy, Ph.D.
On the eve of the 2024 election, there’s plenty of uncertainty around what the outcome will be. However, one thing is clear: regardless of the election results, short-term credentials are about to take center stage in our nation’s higher education policy.
This is a remarkable moment. On one side, Vice President Kamala Harris is promising to cut “unnecessary degree requirements” for federal jobs, saying, “For far too long, we’ve acted like a four-year degree is the only way to success.” On the other side, former President Donald Trump — who signed an executive order back in 2020 to prioritize skills over degrees in federal hiring — continues to champion the value of workforce training and non-degree pathways.
What makes this so powerful is that we rarely see such agreement across the political aisle. In a time of deep division, both major presidential candidates are committed to expanding access to short-term credentials and skills training. This bipartisan push reflects a growing realization that the future of work is changing, and our education system has to keep up.
The implications for higher education are profound. Short-term credentials are no longer viewed as mere alternatives to traditional degrees; they are becoming integral to the nation’s education and workforce training systems, with support from both sides of the political spectrum.
As we look ahead to the next administration, we’re seeing a rare opportunity for real change in the way we think about education and opportunity in America. And no matter who wins the election, that change is coming.
State Investments in Short-term Credentials Surge: A Growing Commitment to Skills-Based Education
At HCM Strategists, we’ve been paying close attention to this policy shift, especially as states across the country are investing heavily in short-term credential pathways. Our latest research shows just how rapidly these initiatives are expanding. We’ve identified 70 state-funded initiatives across 32 states, with total investments now reaching at least $5.6 billion. What’s particularly striking is that these investments are happening in states across the political spectrum — from the reddest to the bluest and everything in between. The surge of funding these states are appropriating shows that they are already betting big on skills-based education as the future of workforce development.
This marks a significant increase from just a year ago. In 2023, our analysis uncovered 59 state-led programs in 28 states, with funding approaching $4 billion. The growth we’ve observed underscores the rising commitment from states to invest in short-term educational pathways that equip individuals with in-demand skills more quickly, efficiently, and economically.
In our latest report, we provide a table with a comprehensive overview of the initiatives we've identified, detailing the type of program and the total amount allocated by the state to date for each. To explore the full list and see all the details, be sure to check out the full report.
In the past year, eight states have launched a total of 10 new initiatives focused on short-term credentials: Alabama, Colorado, Indiana, Michigan, Missouri, North Carolina, Ohio, and West Virginia. The most recent batch of new state-funded programs highlight the diversity of approaches being taken to support learners and workers who seek shorter-term, skills-based credentialing pathways. Below are some highlights:
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For the FY25 budget, Governor Kay Ivey recommended $1 million for a new Short-term Credential Scholarship Program, which the legislature fully appropriated in April 2024. The Short-term Credential Scholarship Program was established by Alabama Act 2023-539, which was sponsored by Senator Arthur Orr. This initiative supports Gov. Ivey’s "The Game Plan" strategy, a package of economic development bills that aim to strengthen the state’s competitiveness for job-creating projects. The scholarship is specifically focused on the state's community colleges. Since January 1, 2024, Alabama residents have been eligible to receive up to $4,500 in reimbursements for qualified expenses, including tuition, fees, books, materials, and supplies, to pursue short-term credentials that can be obtained within two semesters or less. The Alabama Community College System administers the program, which is set to expire on December 31, 2028, unless extended by the legislature. The short-term credential program must be aligned to an occupation listed on the Alabama Committee on Credentialing and Career Pathways (ACCCP) regional or statewide lists of in-demand occupations.
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In May 2024, Colorado launched a new tax credit program to support short-term credential enrollment for low- and middle-income Coloradans (HB24-1340). Beginning in Fall 2024, resident students who qualify for in-state tuition at Colorado public postsecondary institutions and who have family incomes of $90,000 or less are eligible for complete reimbursement of out-of-pocket tuition and fees for microcredential programs through a tax credit. This credit applies to recent high school graduates (within two years of high school graduation or equivalency) who enroll at least half-time (minimum six credits per semester) in their first two years of college (up to the first 65 credits), excluding concurrent enrollment, AP/IB, military credit, or credit for prior learning. Students are required to maintain a minimum GPA of 2.5 or higher to remain eligible. To claim the credit, eligible students must file state taxes, and Colorado institutions will be required to notify students of their eligibility each semester. This refundable credit ensures that even students with no federal tax liability can receive full tuition and fee reimbursements.
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Missouri's HB 417 established the Upskill Credential Training Fund, which offers competitive grants to reimburse small and medium-sized businesses that provide training opportunities for employees to earn short-term industry-recognized credentials. The program aims to support high-demand jobs and includes specific eligibility criteria, such as the economic impact on the employer's region and the employer's contribution toward training costs.
The fund, capped at $6 million annually, will distribute grants equally among businesses of varying sizes. Employers must sponsor employees to obtain credentials within 12 months of receiving a preliminary award, and the Missouri Department of Economic Development will manage the reimbursement process.
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Ohio's House Bill 33, passed in 2023, introduced the Work Ready and Talent Ready grants. The Work Ready Grant provides up to $3,000 to eligible students enrolled in qualified programs at community colleges, state university branch campuses, or Ohio Technical Centers (OTCs). Students can receive grants for up to six semesters or three academic years if they meet residency, FAFSA completion, and enrollment criteria.
The Talent Ready Grant supports workforce credential and certificate programs of fewer than 30 credit hours at community colleges, state community colleges, technical colleges, or university regional campuses. The Ohio Department of Higher Education (ODHE) will distribute these funds to establish and operate such programs, enhancing support for short-term certificates.
Additionally, under the bill, the Chancellor of ODHE is required to report program metrics, including demographics, success rates, and the number of credentials awarded, to the Legislature. These data will guide future policy decisions. In September 2024, the Chancellor, with support from Ohio's public postsecondary institutions, released a report to the Ohio General Assembly. This report offers recommendations on the types of data that Ohio’s community colleges, universities, and technical centers should collect and report, for both credit and noncredit programs.
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In October 2024, West Virginia became the latest state to launch a new microcredential initiative: Credential WV, a forward-looking initiative aimed at preparing students for the evolving demands of the state’s labor market. This program will offer enhanced opportunities for targeted, stackable credentials designed to build workforce-relevant skills and boost career competitiveness for high school students, traditional-age college students, adult learners, and workers seeking to upskill.
West Virginia is primed for the expansion of microcredentials, as the state faces challenges with low workforce participation and a declining college-going rate. With over 200,000 adults who have some college experience but no degree, the initiative also presents a significant opportunity to engage this population. There is strong demand for workforce credentials in the state, and Credential WV aims to meet that need by offering flexible, stackable credentials that help both West Virgnians build industry-recognized skills. Credential WV has the potential to play a key role in boosting workforce participation and supporting career advancement across the state.
Credential WV will roll out in three phases over the next three years and will eventually be expanded to all colleges and universities in the state. In Phase 1 (Year 1), institutions will identify available resources to create microcredentials aligned with workforce needs. Phase 2 (Year 2) will involve expanding these offerings and revising the funding formula to support them. Finally, Phase 3 (Year 3) will standardize the process for awarding credit for prior learning (CPL), ensuring a consistent and equitable system across institutions.
Institutional leaders recognize the importance of a regional approach to workforce development. Rather than relying on a centralized, one-size-fits-all model, Credential WV will provide institutions the autonomy to address specific workforce demands unique to their regions. This flexibility will allow each institution to tailor credentials to local industry needs. To ensure the success of this approach, a strong reporting structure will be essential for tracking progress and outcomes across the state.
The Rising Focus on Short-term Credentials Comes Amid Higher Education’s Confidence Crisis
The expansion of state investments in short-term credential programs comes at a pivotal moment as higher education totters on the public perception tightrope. A June 2024 survey conducted by the Lumina Foundation and Gallup confirms a troubling trend we’ve been watching for years: Americans are increasingly losing confidence in the higher education system. According to the survey, the public is now almost evenly divided—36% express a great deal or quite a lot of confidence in higher education, 32% have some confidence, and another 32% say they have little to no confidence at all.
To put these findings in perspective, back in 2015, a solid majority — 57% — felt confident in higher education, with only 10% expressing doubt. In less than a decade, we’ve seen a sharp erosion of trust across all demographic groups. This lack of confidence is not just a statistic; it’s a wake-up call. Higher education is at a tipping point, and the public is demanding alternatives that better align with the realities of today’s workforce.
According to Lumina-Gallup research, the top three concerns contributing to the erosion of trust in higher education are the perception that colleges promote political agendas, fail to teach relevant skills, and are prohibitively expensive. Growing dissatisfaction regarding the relevance of college education could lead to increased scrutiny from policymakers, with potential regulatory changes, reduced public funding, or new standards aimed at ensuring the nonpartisanship and job-relevance of educational offerings. Additionally, it may directly contribute to an increased demand for skills-based training, apprenticeships, and non-degree credential programs. This shift could pressure higher education institutions to re-evaluate their offerings and better align programs with marketable job skills.
A notable bright spot in the Gallup-Lumina findings is the significantly higher level of confidence Americans have in two-year colleges compared to four-year institutions. According to that research, nearly half of Americans (48%) say they have a great deal or quite a lot of confidence in community colleges — which are key providers of short-term credentials. And public support for non-degree credentials is robust. A March 2024 National Skills Coalition poll of 1,000 registered voters found that 91% of Democrats, 74% of Republicans, and 83% of Independents favor increased public investment in skills training. Additionally, a majority of respondents across party lines indicated they are more likely to support candidates who champion funding for skills-based education, as they perceive that these programs are playing a critical role in meeting the growing demand for more practical, skills-based education. Moreover, non-degree programs avoid the three biggest challenges degree programs face, according to the Lumina-Gallup research: their distinct focus on skills training mean they are free of any perceived political bias, they teach learners relevant skills that lead to well-paying jobs, and they cost significantly less than associate and bachelor’s degree programs.
And that’s exactly where short-term credential programs come in. They’re emerging at a time when people are craving practical, flexible, and affordable routes to success. This isn’t just an educational shift—it’s a direct response to the growing disillusionment with the traditional four-year degree.
It’s no surprise that while enrollment in traditional degree programs has been declining, we’re seeing a record number of people turning to short-term or non-degree credential programs. For many Americans, securing a good job is still a top priority, but the four-year degree often feels out of reach—whether due to cost, time, or simply because it doesn’t fit their career goals. In contrast, short-term credentials offer a faster, more affordable path to economic opportunity, and that’s reshaping the education landscape in ways we can’t ignore.
As exciting as the momentum is around short-term credentials, the path forward is not without its challenges. Policymakers and practitioners are navigating uncharted territory as they work to solidify these non-degree pathways as viable options for more Americans.
One significant hurdle is the stalled legislation to expand Pell Grants to workforce training programs. While this could open doors for millions, policymakers need to ensure that any expansion includes guardrails to prevent unintended consequences—like institutions hiking prices to capture additional aid, rather than keeping education affordable and accessible.
Another challenge is the lack of comprehensive data on short-term credential programs, particularly noncredit offerings. Often called the “hidden college” at two-year institutions, noncredit programs are typically siloed from the rest of the system, making it difficult to assess their true impact. We need a better understanding of both “outputs” and “outcomes,” with clearly defined indicators of economic mobility. States like Ohio are beginning to show us what’s possible, serving as models for how to collect and use data to track program effectiveness and student success.
Then there’s the issue of defining what success really means for these programs. Yes, earnings premiums are a common measure, but we should also consider metrics like poverty reduction, alignment with employer needs, and equity in outcomes. Short-term credentials that may not lead to immediate wage gains can still play a crucial role in state and regional economies, and we must avoid neglecting these programs in funding decisions.
Looking ahead, we also need to anticipate workforce demand beyond historical data. Emerging industries remain a mysterious blue ocean of what’s coming. States have begun stepping up by conducting roadshows to engage directly with employers and understand future needs that aren’t yet obvious.
Finally, states’ budget conditions will play a major role in the future of these programs. Some states with budget surpluses are advancing rapidly, investing heavily in short-term credentials, while others with financial constraints are starting to question the sustainability of their efforts.
So yes, while the future of short-term credentials is bright, it’s not guaranteed. But by addressing these challenges head-on, we have the opportunity to create a more inclusive, equitable, and responsive education system that meets the needs of both workers and employers in the 21st century. This is a moment for all of us — policymakers, educators, and leaders alike — to step up and ensure these pathways live up to their promise.
