Degreed, CodeFights Ready Alternative Credentials To Rival Diplomas

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says. The company will eventually confer credentials for a wide range of different jobs and professions, he says—“from forklift driver to CEO of an organization.”

Blake says the startup’s current work with employers should give its credentials some weight with them, and help boost its credibility.

“If we become the lens by which they evaluate learning today, that puts us in a position to launch our actual certifications,” Blake says.

Employers as the primary customers, educated workers as the product

It’s interesting to look at the ways these two San Francisco startups diverge from the big Utah-based edtech company Pluralsight, which offers 5,000 courses in high-end programming skills to consumers. Pluralsight also acquired a skills-testing unit when it acquired the Boston startup Smarterer in late 2014. Users can tap into Pluralsight’s resources for $29 a month, and they can earn course completion certificates.

By contrast, the sole paying customers for both Degreed and CodeFights are business enterprises; individual learners can tap into their services for free. The two startups leave it to other companies and schools to create much of the educational content people need to master before they can qualify for skilled positions. (Although CodeFights doesn’t teach people to code, Sloyan says its tournaments and challenges offer programmers opportunities to practice their skills.)

Meanwhile, Pluralsight is seeking to serve both kinds of customers: consumers and businesses. Companies can buy licenses to train in-house teams of developers and other professionals, and to track the employees’ movement though the Pluralsight coursework.

Alternative credentials and the transformation of higher education

The business plans of Pluralsights, Degreed, and Codefights align with a movement that comprises several threads: credentialing innovations as well as “competency-based education” often oriented toward workplace skills; skill-testing services independent of university grades; and support for an increasing parity between credits earned from traditional academic institutions and unaccredited edtech providers or other sources.

For example, the Lumina Foundation, a well-funded Indianapolis non-profit, is supporting venture firms and investing in startups such as New York-based electronic badge service company Credly. Lumina’s mission is to increase the percentage of people with post-secondary education—-whether that means college study or not.

How the alternative education movement may fare under new White House leadership

The Obama administration gave a boost to this movement in August, by creating a pilot program that opens the door to federal student aid for a selected group of degree or certificate programs run jointly by traditional higher education institutions and alternative providers such as code schools and edtech companies.

That program, called EQUIP (Educational Quality through Innovation Partnerships) is one of the few pieces of the Obama legacy that may be advanced by the Trump administration, observers of the education scene have predicted.

Blake says EQUIP may dovetail with the views of Betsy DeVos, Trump’s nominee to be secretary of education. DeVos is a billionaire philanthropist who has supported charter schools as alternatives to existing public schools, and voucher programs that would help parents pay for tuition at private schools.

“DeVos has a bias toward choice at the K-12 level,” Blake says. “It may be that that translates into choice in the higher education world,” Blake says.

A key question is whether policies like EQUIP would ever open federal student aid to programs run entirely by providers who don’t seek and receive approval from the accreditation agencies that oversee quality at colleges and universities.

Meanwhile, Sloyan says the Trump administration could take steps on his own wish list by relaxing immigration controls, but he’s not holding his breath. Because CodeFights helps U.S. employers recruit engineers from all over the world, his company’s revenues would increase “100 times” if talented new international hires could get a green card overnight, he says.

“With a new administration that is very conservative about visas, that might not happen for about 10 years,” Sloyan says.

Both CodeFights and Degreed are working with about a hundred companies and organizations, according to the startups’ CEOs. CodeFights is taking in “significant revenue,” Sloyan says.

Blake says Degreed has sold two million licenses for use by its clients’ employees. Outside of its contracts with employers, anyone can use the app for free. Degreed doesn’t receive payment from the companies whose learning resources are listed in its menu. Blake says the startup doesn’t want to have a financial incentive to serve one learning opportunity over another.

Edtech, credentialing innovation, and disruption in academia

Both Degreed and CodeFights operate in an arena of post-secondary education that is … Next Page »

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