Research: A Typology and Policy Landscape Analysis of State Investments in Short Term Credential Pathways

Last Updated: 03/09/2024

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Many states have adopted strategies to recognize short-term credentials, however, there has been little coordinated information about these developments. HCM Strategists conducted a study (Stephanie M. Murphy, 2023) to develop a comprehensive classification system (typology) of direct and sustained state funding for short-term credential programs. The study’s scope focused on credentials granted by public and private postsecondary institutions upon the satisfactory completion of coursework and/or assessments, including both for-credit and not-for-credit programs.

The study defined “short-term credentials as educational achievements that require less than one year of full-time study, aligning with the definition commonly used in federal data systems.”

Five key research questions drove the investigation:

  1. What states are appropriating funds to support the creation, expansion, or durability of short-term credential programs and pathways?
  2. What are the various components of these existing investments?
  3. What are states funding — student aid to defray the costs of tuition and fees or institutions to build capacity to offer more and stronger programming?
  4. What funding sources are available and is there a consideration of sustainability?
  5. What are the elements of strong policy design on short-term credentials and how can existing policies be improved?

The methodology included:

  • Examination of the 50 U.S. states to collect information from legislation, state budgets, existing research, and direct communication with state higher education leaders on state investments and policies around short-term sub-baccalaureate credentials, with a particular focus on quality and equity.
  • Quantitative and qualitative research methods to provide a nuanced and evidence-based understanding of state investments and policies.
  • Identification of trends or best practices from the scan.
  • Analysis of dataset.

The classification system depicts state investments in short-term credential pathways by key benchmarks (these are specified in the report):

  • Whether and how states clearly define short-term credentials to help establish a consistent understanding of these programs.
  • Whether policies are equity-centered in design and delivery, ensuring that diverse populations have equal access to these valuable learning opportunities,
  • Revenue sources and sustainability to understand how states allocate funds and maintain ongoing support.
  • Whether states commit to an assurance of value or quality, demonstrating a dedication to providing impactful, high-quality programs to learners.


  • The research identified 59 state-led initiatives across 28 states.
  • Investments in these programs total no less than $3.81 billion.
  • There is variation in how the states define short-term credentials in state policies (the report acknowledges deviations from the study’s definition when relevant).
  • 27 of the initiatives provide financial aid directly to students to defray program costs.
  • 15 state initiatives allocate funding to institutions with the aim of providing a means to offer student supports and/or tuition relief.
  • 6 states within the dataset provide funding to institutions to promote capacity-building and foster the development of short-term credential programs that align with workforce needs.
  • 5 states integrate funding for short-term credentials into their outcomes-based funding formula.
  • Many programs (classified as “other” in the report) fund the development of a tool, framework, or further research on short-term credentials to help inform future policies.
  • 25 initiatives are funded using the state’s general funds.
  • 4 states (Florida, Tennessee, Texas, Utah) allocate state formula funding for short-term credentials through an outcomes-based funding model, which distributes money based on student performance.
  • 11 initiatives made use of federal Covid-19 emergency relief dollars to pay for one-time or pilot programs.







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Organizations (275)

Initiatives (309)

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