Students Pay the Price and For-Profits Prosper in the Wild West of Career Education

Thousands of organizations offer “certificates,” “badges” and other credentials to workers looking to boost their jobs skills and marketability. Are they worth it?

In today’s rapidly shifting economy, Americans now know that keeping their skills and education fresh is a lifelong imperative. The proportion of “adult learners” has exploded in recent years, and students over the age of 25 now make up more than 40% of the nation’s college students.

One increasingly popular way for workers to boost their skills is to acquire one of a burgeoning number of “certificates,” “certifications,” “badges” and other professional credentials in addition to or in lieu of an old-fashioned college degree. According to the nonprofit Workcred, more than 4,000 organizations – including colleges and universities – now offer some sort of professional credential.  And in 2012-13, says the U.S. Department of Education, institutions conferred 966,084 certificates to students, nearly double the number granted in 1998.

Many of these credentials, however, could be worthless. No one really knows.

In the larger debate about the “worth” of a college degree – whether the cost of spiraling tuition is worth the investment –  there is at least the benefit of common terminology. A “bachelor’s degree,” for example, is generally agreed to take about four years, and well-known accrediting organizations evaluate the quality of the institutions conferring such a degree. Even if the value, quality and cost of a bachelor’s degree vary dramatically from institution to institution, a bachelor’s degree from an accredited school still means that this particular credential has met some minimum acceptable standard of quality, as determined by a third party.

That’s not the case, however, in the broadening swath of career and adult education, where “alternative” post-secondary credentials are proliferating, in everything from food safety to welding, web design and financial planning.

For the most part, the rise of this type of “credentialing” has been a boon for many students, for whom the right professional credential can help them land a better job, get a promotion or a raise. In the information technology industry, for example, where skills have been standardized over the last several decades, many employers require a specific certification from a specific organization or company. This is why want ads for IT workers often ask for “Microsoft-certified” technicians or “A+” certification.

“It streamlines the process for hiring managers,” says Steven Ostrowski, a spokesman for CompTIA, the IT industry’s trade association and one of its largest providers of professional certifications, including the “A+” designation.  “It signifies that an individual has the skills they say they have.”

But in most industries, there aren’t yet common standards for what various types of credentials signify, which means confusion for both employers and workers looking for professional training. What is a “badge” versus a “certificate” versus a “license” or “certification”?  There is no commonly accepted definition of these terms.  In the field of financial planning, for example, says Steve Crawford, a research professor at George Washington University’s Institute of Public Policy, there are at least 65 different kinds of credentials available to aspiring professionals. “Some of them are serious,” Crawford says, “but others you can get after a few weeks online.”

According to a white paper by Workcred, the vast majority of organizations handing out credentials “self-declare” their market value and quality. This means that if, for example, you wanted to create a certificate program for professional dog washers, you could set up your own accrediting body and do exactly that. No one will stop you. (And in fact, you can earn a pet grooming certificate from the Penn Foster Career School in a two-month online program.) Of the thousands of credentials a student can earn, says Workcred, fewer than 10% have been accredited or evaluated by a third-party. The result, said Lumina Foundation President Jamie Merisotis at a recent event, is a post-secondary education marketplace that’s “chaotic,” “opaque” and “disconnected.”  “With all these credentials popping up, it’s extremely hard for both students and employers to know what they mean,” says Crawford.

It’s this chaos and uncertainty that bad actors have been able to exploit to their advantage, and the recent outrages perpetrated by the for-profit college industry reveal the extent to which students are vulnerable to the allure of what turn out to be dubious educational credentials at exorbitant prices.  Now that the practices of this sector have come under closer scrutiny, it’s increasingly clear that many students don’t get what they pay for and pay too much for what they get.

One recent example is ITT Educational Services, Inc. – the parent of 138 now-defunct ITT Technical Institutes nationwide. One of the country’s largest and oldest for-profit education providers, ITT filed for bankruptcy earlier this month after a series of state and federal investigations alleged deceptive marketing and recruiting practices by the company and the government shut down its access to federal financial aid.

According to a March 2016 suit filed by the Massachusetts Attorney General’s office, ITT had lied about the success of its graduates and offered atrociously poor quality education in its popular “Computer Network Systems” program, a two-year course of study that cost students $47,328 in 2010.  (By way of comparison, the training provider ONLC offers a five-week prep class for the “A+” certification mentioned above for $2,495 (including the $200 exam fee)).

Among other things, the AG’s complaint charged that ITT counted any job that involved the use of a computer as a “placement” in the “field of study,” including selling computers at big-box electronics stores and checking travelers onto planes. Students at the school’s Massachusetts campuses also complained of being stuck with “outdated technology” and told to “Google” the answers to their questions. Students said that teachers quit halfway through the semester or “just sat there and didn’t teach us.” Unemployed or trapped in low-wage or temporary jobs after graduating, students ended up saddled with thousands of dollars in loans that they couldn’t afford to pay back.

The collapse of ITT followed another high-profile bankruptcy by a for-profit operator, Corinthian Colleges, which shuttered the last of its 30 campuses last year. Corinthian, too, had been under investigation for allegedly deceiving its students about the jobs they could expect to land and the salaries they would make.

While it’s theoretically possible to prosecute the for-profit education industry out of existence, targeting for-profit colleges wouldn’t address the growing demand for adult education that’s helped create this market in the first place. Nor would it solve the problem of educational quality. ITT got into trouble not because of its sub-par curriculum but because it was allegedly dishonest about the results of its product. There are plenty of mediocre (or worse) schools – both for-profit and not – that make no promises about what its graduates can achieve.

A better approach might be to create a transparent, standardized marketplace for post-secondary credentials where workers and employers can see what credentials are available in a given field and compare them head-to-head.  That’s the goal of the “Credential Transparency Initiative,” a consortium of educators, employers and nonprofits convened with the support of the Lumina Foundation and co-directed by Crawford.

As its signature effort, the initiative is working to launch an online “credential registry” that would provide comprehensive information about the credentials students can earn, along with detailed information about the organization offering the credential, third-party accreditation (if any), requirements and even outcomes. The goal, says Crawford, is to allow “apples to apples” comparisons of the quality of various credentials so that students can become better shoppers and employers can be better evaluators of candidates’ skills. The data would also be available to third-party developers interested in helping consumers filter and rank the information.

Standardizing the data institutions provide could go a long way toward weeding out fly-by-night operators and elevating the credentials that are genuinely worth pursuing.

While the registry is still under development, the initiative is working with more than 60 credentialing organizations and has developed a pilot site. Organizers say they hope to make the site public sometime next year.  “It’s bound to increase the quality of what’s offered to the public,” says Roy Swift, executive director of Workcred.

And it may just put a dent in the ability of institutions like ITT and Corinthian to prey on the ambitions of Americans who just want a path to get ahead.