Will Competency-based Education Replace Degrees?

Get a degree or get a certificate? That’s the perennial question today as prospective students look at the tumultuous job market and level the costs between a traditional degree and a competency-based education.

For many, the speed and affordability of competency-based education (CBE) programs are irresistible. The rise of the coding boot camp illuminates this trend perfectly. At an average cost of $13,584 for a full-time boot camp, tuition equates to just a semester of university costs. Additionally, courses within the technical training program can be self-paced; and in about four to six months, the programs can get students into a six-figure career.

No matter the industry type, the benefits of CBE programs are undeniable. They’ve compelled employers, educators, and students to re-examine the value of traditional credentials found in academic degrees and explore a purely functional, skill-based education. Yet, the big question in this disruption isn’t the worth of such CBE programs, but what their growth will be like and if it will eclipse a traditional degree.

The Case for Competency

Ultimately, the market and employers will decide whether traditional degrees remain the norm or not. While a credentialed education has many virtues, generating an immediate income has always been the biggest draw.

Top-tier employers in the tech industry like Apple, Google, Microsoft, Facebook, and others have already weighed in by hiring applicants with CBE certifications and creating their own CBE programs. 

In 2020, Google announced three CBE programs for Google Project Manager, Data Analyst, and UX Designer certificates. Each of the programs can be completed in six months and have projected annual earnings that far exceed the U.S. Census Bureau’s estimated annual income for individuals at $36,000. Google’s average salary ranges for certificate types include $66,000 for a data analyst, $75,000 for a UX designer, and $93,000 for a project manager. 

Equally of note is that these salary figures are competitive with the U.S. Bureau of Labor Statistics projected annual earnings for bachelor’s degrees, at about $65,000; master’s degrees, at $78,000; and doctorate degrees at roughly $98,000.

In a company blog post, Google’s Senior Vice President of Global Affairs Kent Walker said that in today’s economy, college degrees were too exclusionary and simply unable to provide enough skilled tech workers for the U.S. labor market. Underscoring this message, he pointed to research from the Brookings Institution that reported “nearly two-thirds of all new jobs created since 2010 require either high-level or medium-level digital skills.”

“College degrees are out of reach for many Americans, and you shouldn’t need a college diploma to have economic security,” Walker said. “We need new, accessible job-training solutions—from enhanced vocational programs to online education—to help America recover and rebuild.”

In a Twitter post, Walker added that when hiring, Google would now “treat these new career certificates as the equivalent of a four-year degree.”

The Mountain View company is joined by Microsoft, which has launched similar certificate programs and supported by technology leaders like Elon Musk, who has said hiring managers should look at ability and track records instead of degrees. To this day, Musk maintains this belief that was reflected back in a 2014 interview with the German automotive magazine Auto Bild. 

“There’s no need even to have a college degree at all, or even high school,” Musk said when speaking of Tesla’s hiring process. “If somebody graduated from a great university, that may be an indication that they will be capable of great things, but it’s not necessarily the case. If you look at, say, people like Bill Gates or Larry Ellison, Steve Jobs, these guys didn’t graduate from college, but if you had a chance to hire them, of course, that would be a good idea.”

The shift by employers and a new demand by prospective students has spurred academia to respond. In a recent survey of 602 higher-education institutions, the American Institutes for Research (AIR) reported that 85 percent — or a total of 511 institutions — expressed an interest in developing CBE courses or had already adopted such programs. 

The survey also showed the institutions had 588 active CBE programs, with 427 for undergraduates and 85 for graduates. Computer science and nursing programs represented the lion’s share of these courses.

Uncertain Growth

Despite a firm market hold and endorsements from major companies, the growth outlook for CBE programs may be gradual or rapid — depending on the data you review.

Within AIR’s research, Co-authors Jessica Mason and Kelle Parsons observed only small increases in available CBE programs since the two first surveyed academic institutions in 2018. The researchers said the core barriers to growth lay in federal financial aid availability, faculty costs, regulations from accreditors, and restructuring difficulties.

“CBE adoption efforts span all institution types, and we see indications of growth in the number of programs; however, much adoption activity remains piecemeal, with many institutions adopting some but not all elements of CBE,” Mason and Parson wrote. “Most institutions consider CBE as a tool for advancing specific institutional goals, rather than the primary mode of operation for the institution.”

However, the time for academia to adapt may be limited. The private sector may take matter into its own hands long before universities can acclimate. 

AIR’s research did not survey companies like Google and Microsoft that have created their own academic currency with CBE programs. Nor did AIR’s research analyze the hundreds of coding boot camps and thousands of online CBE courses from companies like Coursera, edX and Udemy. Research isolated itself to the U.S. Department of Education’s Integrated Postsecondary Education Data System (IPEDS), a database of accredited schools that does include this new cottage industry.

Today, online programs have decentralized education. Education can be automated via videos, classrooms created anywhere, educators coming from all walks of life and expertise. While traditional degrees for highly educated occupations like physicians and lawyers may never go away, most of the world aren’t doctors and lawyers. The hard truth for traditional institutions is that universities and government accreditors no longer have absolute authority to determine value.

Speaking from a purely financial and career perspective, the market is — and has always been — the decider of educational value and demand. The concept is underscored by universities’ current financial woes and the explosive growth of online education. 

A survey of universities shows more than 72 percent of university presidents plan to lay off employees, with 55 percent planning budgets cuts across departments. The credit rating agency Moody also estimates more than 30 percent of colleges are burdened by deficits and 15 percent of public universities only had less than 90 days of funding on hand. In contrast, the growth of the online education industry is roaring. Globally, analysts project that by 2025 the industry will be worth $350 billion — an exponential leap from its $19 billion valuation in 2019.

From the Emory Academic Innovation Blog.