1.5 Million Credentials, 69% Worthless: Brookings Maps the Nondegree Credential Market

What Brookings's Research Found

The Brookings research, conducted by Escobari and senior research analyst Ian Seyal, analyzed the wage outcomes associated with nondegree credentials across different worker populations, credential types, and labor market contexts. The findings were not uniformly negative, which is important context for the 69 percent figure. Brookings found that for workers without a bachelor's degree, earning a first job-relevant nondegree credential produced an average wage premium of approximately 6.8 percent. That is a meaningful return for workers in the lower part of the wage distribution, where the same 6.8 percent can represent a significant improvement in financial stability.

The complexity enters when you look beyond the first credential. Seyal's analysis found that for workers without bachelor's degrees, the wage return to stacking additional nondegree credentials dropped sharply after the first one. The market, it appears, rewards workers who have demonstrated the ability to complete a credential program and apply it to a job-relevant domain. After that initial demonstration, additional credentials in the same or adjacent areas produced diminishing returns, suggesting that employers are using credentials as a minimum qualification signal rather than as a continuous measure of increasing capability.

"We have a skilling market that's not very accountable. A credential means nothing unless it signals to an employer that you have the skills they need. Most credentials do not pass that test. When so few of them work, employers have trouble interpreting them. And when employers have trouble interpreting credentials, workers who spent real money and real time earning them are the ones left holding the risk."

Marcela Escobari, Senior Fellow, Brookings Institution

The research also found a troubling equity inversion in how credentials are distributed. College-educated workers are earning nondegree credentials at higher rates than workers without bachelor's degrees, despite the fact that the wage premium for nondegree credentials is concentrated among workers who lack degree credentials. Workers who are most positioned to benefit from high-quality nondegree programs are least likely to be accessing them, and workers who are least likely to benefit from additional credentials beyond their degree are the most active users of the credential market. That inversion reflects barriers of information, time, and resources that make it harder for lower-income workers to find and complete programs that would produce real labor market returns.

The Burning Glass Analysis: What 69 Percent Minimal Value Means

The Burning Glass Institute, led by president Matt Sigelman, analyzed the nondegree credential market from the employer demand side: which credentials appear in job postings, which credentials appear in the profiles of workers who are actually hired, and which credentials produce measurable hiring advantages when present versus absent. The methodology produces a market-facing measure of credential value that is different from wage analysis: it shows which credentials employers are actually using as hiring signals versus which credentials employers ignore.

The 69 percent minimal value finding reflects how few credentials appear with any regularity or significance in employer hiring behavior. The credentials that do appear reliably are concentrated in a relatively small number of sectors and occupational categories: technology certifications from major vendors, healthcare credentials with regulatory or licensing significance, financial services designations with professional recognition, and trade credentials with union or employer verification requirements. These credentials work because they carry information that employers trust, either because the credential body controls quality through proctored assessment or because regulatory requirements have created accountability that the voluntary credential market lacks.

"The problem with the credential proliferation is not that credentials can't work. The ones that are built around proctored exams, that require demonstrated performance rather than course completion, those add real value. The problem is that for every credential that works, there are dozens that look similar from the outside but don't have any of the quality controls that make the good ones worth something to employers."

Ian Seyal, Senior Research Analyst, Brookings Institution

Sigelman's research also found that the signal-to-noise problem in the credential market is creating a second-order problem for workers who hold genuinely valuable credentials. When an employer receives applications from workers holding 15 different credentials in a related area, only a few of which are actually meaningful, the employer's ability to use credentials as hiring signals degrades. Hiring managers who cannot quickly distinguish between a rigorous, proctored, employer-recognized certification and a badge earned through a 4-hour self-paced online course increasingly discount the entire credential category rather than invest the time to learn the quality differences. The proliferation of low-quality credentials is reducing the market value of high-quality credentials by contaminating the signal.

AI Credentials: The Fastest-Growing and Most Uneven Category

Inside the broader credential market, AI-related credentials are growing approximately twice as fast as non-AI credentials, a rate that reflects genuine employer demand for AI-capable workers and equally genuine confusion about what AI credentials mean. The AI credential landscape is, in many respects, a concentrated version of the broader credential quality problem: enormous variety, limited quality accountability, and sharp differences between the credentials that employers are actually using as hiring signals and the credentials that have proliferated to meet the demand narrative.

The AI credentials that have established the clearest employer recognition are the vendor-specific certifications from major cloud and AI platform providers: Google Cloud Professional Machine Learning Engineer, AWS Certified Machine Learning Specialty, Microsoft Azure AI Engineer Associate, and similar credentials that require demonstrated technical proficiency in specific platforms and are backed by organizations with significant institutional presence in enterprise hiring. These credentials are expensive to prepare for and test, require genuine technical knowledge to pass, and are recognizable to hiring managers at the organizations that use those platforms.

The AI credentials that are proliferating most rapidly are substantially less rigorous. Online learning platforms have launched hundreds of AI-related certificate programs over the past two years, many of them designed for completion in days or weeks and testing primarily for familiarity with AI concepts rather than demonstrated ability to build or deploy AI systems. The speed of their proliferation has outpaced any systematic assessment of their employer recognition, and Burning Glass data suggests that most of them do not yet appear with measurable frequency in actual hiring patterns.

The practical implication for workers seeking AI credentials is that the relevant question is not whether to pursue an AI credential but which specific credentials are recognized by the employers they want to work for. That question requires actual research: looking at job postings for desired roles, identifying which credentials appear as requirements or strong preferences, checking whether those credentials require proctored assessment or self-paced completion, and understanding what preparation is realistically required to pass them. Credentials chosen through that process are substantially more likely to produce labor market returns than credentials chosen because they are prominently marketed or because they seem relevant to AI at a surface level.

The Pell Grant Expansion and Its Accountability Gap

The federal policy dimension of the nondegree credential market became more consequential in 2026 with the expansion of Pell Grant eligibility to short-term nondegree credential programs under the One Big Beautiful Bill Act. The policy logic is straightforward: if nondegree credentials can produce meaningful labor market returns for workers without bachelor's degrees, then making federal grant funding available for those programs extends access to lower-income workers who cannot afford to pay for them out of pocket.

The accountability problem is equally straightforward: Pell Grants are now eligible for programs from a market in which Brookings estimates 69 percent of credentials offer minimal measurable value. Federal money will flow into credential programs across the quality spectrum, with no mechanism currently in place to concentrate funding toward the programs that produce real labor market outcomes. The gainful employment regulations that applied to for-profit higher education created a floor of accountability tied to employment and earnings outcomes. Whether similar accountability requirements will apply to the newly Pell-eligible nondegree programs is the central policy question the Brookings research raises.

Escobari's research team called specifically for outcome-linked funding mechanisms: requirements that nondegree credential programs receiving Pell funding demonstrate, through longitudinal earnings data, that their graduates are achieving wage gains attributable to the credential. The technical infrastructure for this kind of accountability exists in principle through state unemployment insurance wage records, which track employment and earnings for workers over time. Using that data to evaluate program outcomes is not a new idea. Implementing it as a condition of federal funding would be new, and the political and administrative challenges of doing so are substantial.

How to Evaluate a Credential Before Investing

For workers navigating the credential market without the benefit of Brookings research or Burning Glass analytics, the quality signals that distinguish credentials with genuine labor market value from credentials that will not move the needle are learnable, even if they are not obvious from credential marketing materials.

Proctored assessment is the single most reliable quality signal. Credentials that require candidates to pass a monitored exam under controlled conditions, whether in person or via remote proctoring software, have made a commitment that completion cannot be faked through course participation alone. The exam requirement creates accountability that raises the credential's value as a signal to employers. Credentials that issue automatically upon course completion, without any independent assessment of whether the learner can apply the material, are providing employers with no information they cannot get from a resume line saying the applicant took the course.

Employer recognition can be checked directly. Job postings for target roles are a reliable, current source of information about which credentials hiring managers are looking for. If a credential appears repeatedly in postings from employers in a target sector, that is evidence of genuine market recognition. If a credential does not appear in postings, the absence of evidence is not conclusive, but it is useful data that should prompt further investigation before investing time and money.

Credential body accountability matters. Credentials from organizations with transparent governance, published pass rates, publicly available exam blueprints, and continuing education requirements to maintain certification active are making claims that can be evaluated and held accountable. Credentials from organizations that provide no information about exam rigor, pass rates, or maintenance requirements are asking for trust without providing any basis for it.

The 1.5 million unique credentials in the American market will not shrink any time soon. But the workers who approach that market with clear criteria for what a valuable credential looks like, verified against actual employer behavior rather than marketing claims, are substantially better positioned to find the fraction of it that works and avoid the majority that does not. That is a skills-navigation skill in its own right, and in a market this noisy, it may be one of the most valuable ones available.