The declining trend in college enrollments is primarily due to the growing acceptance of alternative credentials by employers

What's this about?

People disagree about whether other job badges caused most of the drop in college sign-ups.

These badges include work tests, short job courses, and awards that are not college degrees.

What supporters say

• Some other job badges help workers earn more money after they get jobs.
• More bosses now accept job skills and other badges instead of asking for a four-year degree.

What critics say

• The health crisis caused a large part of the drop, as many students faced school and work problems.
• College sign-ups began falling before bosses widely started accepting other job badges.
• Fewer young people in some areas means fewer possible college students.
• High costs are a key reason some students leave college before they finish.

How to read this

The number of points on each side does not show who is right; strong proof matters more than a long list.

The bottom line

Other job badges may lower college demand in some work fields, but they do not explain most of the national drop.

The health crisis, timing, fewer young people, and high costs give stronger reasons, so the claim remains unproven.

The claim that employers’ growing acceptance of alternative credentials is the main reason college enrollment has declined remains unproven. Alternative credentials may be changing demand in some fields, but the broader national trend has several stronger competing explanations.

The case for

Alternative credentials—such as industry certificates, short training programs and other non-degree qualifications—have gained real legitimacy in parts of the labor market. Some large employers have removed four-year degree requirements for selected jobs, while employer surveys point to wider use of skills-based hiring and alternative credentials as evidence that applicants are ready to work. 1

That shift could change how students judge the value of college. If a credential can lead to a job more quickly or at lower cost than a degree, it may reduce demand for some traditional programs, especially in occupations with clearly defined technical skills.

There is also evidence that some non-degree credentials deliver measurable financial benefits. Research on industry-recognized credentials connected to community-college workforce programs has found labor-market returns. One analysis found that workers without bachelor’s degrees earned a 6.8% wage premium after obtaining their first job-relevant non-degree credential. 2 These findings make substitution economically plausible in particular industries.

But this evidence shows only that alternatives can matter in some occupations. It does not establish how much of the nationwide enrollment decline they caused, or whether they replace college rather than supplement it.

The case against

The most important problem for the claim is timing. NCES data show that undergraduate enrollment fell between fall 2010 and fall 2021, while much of the evidence about employer acceptance of skills-based hiring concerns more recent changes and selected companies or jobs. 3 That makes it difficult to argue that employer acceptance caused most of an earlier, nationwide decline.

The pandemic is the strongest documented competing explanation. Enrollment losses were especially severe around COVID-19, including at public two-year colleges. The period also brought disruptions to transfers and international enrollment. Undergraduate enrollment later rose 3.5%, to 15.3 million students, but remained 2.4% below its pre-pandemic level. Transfers into community colleges also recovered from their fall 2020 level. 5 That rebound is difficult to square with a simple, continuing shift away from college toward alternative credentials.

Affordability and doubts about college’s value provide additional explanations. Gallup found that cost was the leading reason people without a postsecondary credential or degree gave for stopping out. 4 Strada has linked enrollment decisions to whether education appears likely to lead to meaningful career outcomes, while College Board reporting found that perceptions of college value declined during the pandemic and had not fully recovered in the cited analysis.

Demographic change may also have reduced the pool of potential students. Changes in the size and makeup of the high-school graduate population, along with regional differences in college-going, can lower enrollment even if employer practices remain unchanged. 6

Finally, alternative credentials are not a single, uniform category. Their quality, portability and employer recognition vary widely. Reviews identify unresolved problems in measuring outcomes and assuring quality, while CEDEFOP notes that microcredentials often supplement broader education and training rather than replace it.

The bottom line

The evidence leans against the claim that employer acceptance of alternative credentials is the primary cause of declining college enrollment, but only with low confidence. Alternative credentials have plausible—and sometimes demonstrated—effects in specific labor markets. However, the stronger evidence points to pandemic disruption, cost, demographic change, shifting views of college value and other factors.

No supplied study provides a national breakdown showing how much enrollment fell because employers accepted alternative credentials compared with these competing causes. The key uncertainty is that all of these forces changed at roughly the same time. A national answer would require linking individual enrollment decisions to specific employer practices while accounting for finances, demographics, pandemic conditions and perceptions of college value.