I keep a close eye on what’s going on in the non-degree credentials market. Particularly, as I have an increasing number of conversations with clients about “finding alternative revenue streams.” The American Enterprise Institute’s new study on credential accountability delivers a wake-up call for higher education institutions rushing into the booming alternative credentials market. With over 1.1 million credentials now flooding the marketplace, the research findings present a concerning reality: only 12 percent deliver significant wage gains, and just 18 percent of credential earners see wage increases their peers don’t enjoy.
This finding threatens the sector’s credibility, particularly against the backdrop of continued market growth. The global alternative credentials market is projected to grow from $18.83 billion in 2024 to $69.87 billion by 2032, according to Deloitte’s 2025 Higher Education Trends Report. This, I’ll call it “impact gap,” risks creating a significant disconnect between market supply and actual learner outcomes.
The AEI research reports dramatic value disparities. Top-decile credentials yield annual wage gains of nearly $5,000 and increase career switching success sixfold, while bottom-tier credentials provide virtually no benefit. According to the report, even the “impact” results of prestigious brands show wide variation. Stanford’s Data Science Foundations program generates $4,200 in wage gains while its project management certification fails to boost earnings. This is as 81% of employers now use skills-based hiring (up from 56% in 2022), and two-thirds use skills-based practices for entry-level hires. Employer appetite exists, but quality assurance mechanisms may not be keeping pace.
To me, this suggests a potential coming market correction, likely mirroring for-profit colleges, rapid expansion followed by scrutiny and consolidation around quality providers. While skills-based hiring adoption increased from 40% in 2020 to 60% in 2024, and 52% of employers relaxed educational requirements to focus on skills, many institutions risk chasing market opportunity without adequate attention to outcomes.
Higher education institutions should reimagine their approach to the credential market around evidence-based outcomes, not just enrollment-driven revenue models. Institutions need to track actual wage gains, career mobility, and employer satisfaction—not just completion rates. They must develop transparent quality frameworks, helping learners differentiate between programs. Most importantly, I hope institutional leaders will view this challenge as an opportunity to differentiate through excellence rather than proliferation. Institutions establishing rigorous “impact standards” now will emerge as trusted providers when inevitable market consolidation occurs, building sustainable advantages in a fundamentally restructured marketplace.