Community colleges differ from four-year institutions in key ways, including how programs are distributed across credit and non-credit academic divisions. While nearly all students at four-year institutions are enrolled in for-credit programs, students at community colleges are much more likely to be enrolled in non-credit programs, which compared to for-credit programs, are shorter in duration and typically focus on skills and credentials tied to specific occupations. Although four-year institutions and, by extension, credit programs, tend to receive more attention, non-credit programs at community colleges are a critical source of training for the workforce.

Since 2020, the Federal Reserve Bank of Richmond, which covers South Carolina, North Carolina, Virginia, Maryland, most of West Virginia and Washington, D.C., has conducted in-depth outreach to community colleges across these states. Our findings, summarized in a series of reports and analyses, provide some context for the economic value of non-credit programs and their associated challenges.

These non-credit programs are offered at most community colleges, and are vital to addressing labor shortages, especially in the skilled trades. However, while non-credit programs efficiently train workers for available jobs and programs can be created and executed quickly, funding for these programs is inconsistent. What does that inconsistency mean for students preparing for careers? And what does it mean for employers seeking workers with specific training and skills?

Enrollment in non-credit programs in some states is outpacing credit enrollment

Analysis of enrollment rates, coupled with outreach to community colleges across states served by the Richmond Fed, indicates that enrollment in non-credit programs is currently growing at rates that exceed the growth in credit programs.

Across the North Carolina Community College System, for example, growth in non-credit programs has been dominating growth in credit programs. During the 2023-2024 academic year, full-time equivalent (FTE) enrollment in North Carolina’s non-credit programs grew 8.8 percent year over year compared to FTE enrollment growth of 5.8 percent in credit programs. Growth in the state’s non-credit programs was especially strong in programs such as:

Across the 58 community colleges in North Carolina, 44 saw increased FTE enrollment in workforce non-credit programs during the 2023-2024 academic year.

Percentage change in FTE enrollment in workforce non-credit programs at North Carolina community colleges between 2023-2024

Differentiating credit from non-credit college programs 

From an administrative standpoint, for-credit (or simply “credit”) and non-credit programs differ in the accreditation process and how course completion is measured. For students, the length of time to complete non-credit programs and the transferability of courses to four-year colleges differ as well.

Credit programs are comprised of courses that meet specific criteria set by institutions, community college systems, and accreditors. These programs fall under the purview of state higher education commissions such as the South Carolina Commission on Higher Education and the State Council of Higher Education for Virginia. All new credit degree programs, and any significant changes to existing programs, require state commission approval following college-level approval. In some cases, these changes or additions may also require approval from regional accreditation bodies.

Students enrolled in credit programs earn credit hours for completed courses. These hours may be transferrable toward credit degree programs at other institutions. Students enrolled in credit programs at a four-year institution aim to ultimately attain a bachelor’s degree, while students who complete credit programs at community colleges typically attain an associate degree or a credit-bearing certificate.

Non-credit programs, on the other hand, provide students with contact hours, which are not generally transferable to other institutions. Contact hours can be earned from classroom instruction; they can also include lab, workshop, and clinical hours. Non-credit programs also tend to be focused on particular workforce skills and are short term, with few lasting longer than six months. Depending on the program, students may attain a non-credit-bearing certificate, the contact hours required to take a professional licensure exam, or both.

How non-credit programs can be responsive to workforce needs  

Launching a new credit program is arduous, and in some cases, the process can take several years. Steps include vetting and approvals by the institution’s curriculum process, approvals by the state education commission and accreditation body, and administratively standing up the program to make it available for student enrollment. Schools must be very forward-thinking in order to have in-demand credit programs ready to be deployed.

Non-credit programs, on the other hand, can move from concept to enrollment quickly. The higher education commissions and accreditors do not control non-credit offerings, so an institution does not need approval beyond the state community college system to launch a new non-credit program.

As a result, community colleges can use non-credit offerings to respond quickly to changing workforce needs and local industry growth.  Programs like readySC, touted by South Carolina for economic development purposes, partner directly with community colleges and employers to provide training needed by companies moving to or expanding in the state. The programs designed by readySC are almost all non-credit, short-term programs that provide workers the exact skills needed for the job.

For students, completing a non-credit program in a specific field can facilitate a quick transition into the labor market. While credit programs generally require at least a year to complete, and in the case of associate degrees at least two years, non-credit programs can be completed much more quickly. For example, a commercial driver’s license, or CDL program, might take a student just six to eight weeks to complete.

Non-credit programs also remove a barrier encountered by many students enrolled in credit programs: general education requirements. Unlike non-credit programs, credit programs generally require students take general education courses in English and math. Passage rates for these classes at community colleges are notoriously low. At North Carolina community colleges, for instance, within their first three years of enrollment, between 41 and 80 percent of students had passed general education English, and between 24 and 63 percent had passed general education math. Enrolling in a non-credit program allows students to avoid the delays and hurdles, not to mention the additional costs that general education requirements can pose.

There are clear benefits for employers, too. Our outreach to employers indicates that many middle-skill jobs require some postsecondary skills, though employers often do not require these workers to have earned a degree. Having non-credit programs available in the region can allow employers to attain a skilled workforce with apt training and skills more quickly. In addition, non-credit programs provide employers with an opportunity to upskill existing employees. In fact, most community colleges across the country offer some form of non-credit programming on-site at employers via corporate training. This can range from Occupational Safety and Health Administration training to Microsoft Excel certification to certified nursing assistant (CNA) programs offered on-site at hospitals.

Where non-credit programs face challenges  

While enrollment in non-credit programs is growing and employers seem to recognize their value, there are distinct challenges associated with offering these programs.

The primary issue is related to funding, both for institutions and students. In most states, community colleges’ non-credit programs are funded differently than their credit program offerings. In some states, non-credit programs are not included at all in community college funding formulas.

This is the case for states such as South Carolina and Virginia, where non-credit programs are funded outside of the traditional appropriations system. While funding for these non-credit programs has been growing in recent years, these programs are outside of the standard FTE funding mechanisms used by states, which complicates both how such programs are funded and how to determine future funding streams.

There are exceptions to this norm. Some states, such as Maryland, now fund community college non-credit workforce programs at par with credit programs, providing the same appropriations per FTE. North Carolina is currently debating a major change in their funding model to fund programs based on demand for jobs and the wages graduates will earn. This new model, known as Propel NC, would eliminate the distinction between credit and non-credit programs in the state’s funding formula.

Another challenge facing community colleges that offer non-credit programs is the cost of standing up and operating some programs. Many of the programs are in the allied health fields (e.g., phlebotomy, CNA, medical assistant) or in the skilled trades (e.g., welding, CDL, advanced manufacturing). They require large investments in equipment, as it is expensive to purchase nursing dummies, welding bays, and tractor trailers, and these fields typically require significant lab space.

It is also expensive to hire faculty for these programs. Since professionals in these fields can make relatively high wages, it is difficult to get them to accept lower wages to work at a local community college. We have spoken to many community college presidents who reported that they’d like to expand their workforce programs but cannot afford (or even find) additional faculty members.

Non-credit students face additional funding barriers relative to students in credit programs. Currently, students enrolled in non-credit programs are not eligible to receive federal financial aid, including Pell Grants and federal student loans. And many state scholarship programs require enrollment in credit-bearing coursework.

Greater understanding of the importance of non-credit programs might lead to improvements related to student and institution funding. However, there is much we do not know about these programs and students due to the lack of data that currently exists. Unfortunately, traditional higher education data sources do not capture information on the scale of non-credit academic offerings, or the outcomes of the students enrolled, so there is much about these programs and the students they serve that remain unknown. The federal government collects data only on students enrolled in credit programs, so it is very difficult to observe the full spectrum of non-credit enrollment.

At the Richmond Fed, we have been working to improve this data gap by collecting non-credit data in the Fifth District as part of our Richmond Fed Survey of Community College Outcomes (SCCO). Last year, in an extended pilot, we collected data for 63 community colleges in our district. There were 154,340 students enrolled in non-credit programs across these schools. The shares of non-credit enrollment varied significantly: at one small rural school in Maryland, 76.2 percent of enrollment was non-credit compared to just 8.8 percent at a school in West Virginia. Although non-credit students are almost certainly undercounted due to data limitations, they make up an important part of the total number of students at community colleges across the district. In November, we will have non-credit data to share for each of the community colleges in our district. You can sign up for our updates here to stay abreast of these findings.

The role of employers and nonprofits in supporting non-credit programs 

Because of the strong demand for non-credit programs and the challenges related to funding, funders outside of state legislatures play a pivotal role in the creation and execution of non-credit programs. While employers have long supported community college students by hiring them for local jobs, we are hearing in our outreach that they are now frequently becoming more involved with community colleges in the front end of non-credit programming, including providing funds to purchase equipment or to support faculty needs.

For example, International Truck/Navistar has encouraged the donation of tractor trailers to local community and technical colleges to help them expand or create CDL programs. Cleveland Community College in North Carolina recently received a $1 million donation from the Albemarle Corporation to improve and expand non-credit workforce programs. Smaller donations can be impactful as well. For example, Carolina Handling donated a forklift to Greenville Technical College to support their non-credit programming. Community college presidents are clear that no donation is too small.

Grants also play an important role. Mountain Gateway Community College in Virginia recently received a $650,000 grant from the Industrial Revitalization Fund that will help support the creation of a new workforce development center. Wake Technical College in North Carolina received a $636,128 grant from the National Science Foundation to work toward the creation of new non-credit and credit electric vehicle (EV) programs to support the massive economic development in the EV space across the state.

If community colleges are expected to expand non-credit programming without major changes to funding mechanisms, these corporate gifts and grants will continue to be key inputs into the existence and expansion of non-credit, high-demand, high-cost programs.

What’s next

Data and outreach indicate that student demand is shifting to shorter-term credentials. In addition, employers are becoming more comfortable with accepting shorter-term credentials for many positions. Better data collection is key for non-credit programs to be optimized for employers, community colleges, and students. The Richmond Fed hopes to contribute to these efforts through the SCCO and looks forward to the 2024 data release this November.