Credential innovation is a hot topic in higher education, from microcredentials to digital badges, from competency-based and clickable transcripts to stackable credentials. Case in point: to facilitate dialogue, Lumina Foundation launched the Connecting Credentials initiative to help shape the vision and align the work of some 80 co-sponsoring education, labor and business organizations (including Parchment, where one of us serves as CEO).

While numerous articles have been written (by Kevin Carey, Ryan Craig and others) and conferences held on credential innovation, for many people in academe the concepts are new, with an emerging vocabulary that includes both familiar and unfamiliar terminology. Of those terms, “stackable credentials” is perhaps the most commonly and differently used. In our view, it is also the most important concept in the broader discussion. The term itself is clever, invoking the image of Lego blocks and the metaphor of assembly. But assembly of what? With what linkages?

The most common description of stackable credentials goes something like this: over a lifetime of learning, individuals can assemble, or stack, a series of traditional degree-based and/or nontraditional credentials -- certificates, certifications, licenses, badges, apprenticeships and more -- that recognize achievements and provide an accurate assessment of knowledge, skills and abilities. The more credentials learners accumulate and stack, the more they increase their currency in our knowledge economy, creating more direct pathways to better jobs and higher wages. While that narrative captures a number of key ideas, it glosses over important differences in what credentials are being stacked and why.

Stacking Credentials: Vertical, Horizontal and Value Added

Attainment of the four-year degree has increasingly become the primary focus of higher education, as evidenced by the shift of many two-year institutions toward transfer-friendly programs for learners whose final aspirations are a bachelor’s degree. At the same time, the longer history of community colleges, as well as many land-grant and technical four-year institutions, has been to provide educational programs and credentials tied to occupational fields at the certificate level, tied to a certification or, at the associate level, with a tight vocational focus. Those distinct types of educational programs and pathways have given rise to distinct forms of credential stacking.

In short, credentials can be stacked in many ways. We think the best framework is vertical, horizontal and value added, although we are not sure who actually coined these terms. (Will the master builder please step forward?) Most citations go back to Salt Lake City Community College.

Vertical Stacking. The original and more traditional version of credential stacking, vertical stacking, thinks about credentials in a hierarchy -- with one level building on another, enabling the learner to progress toward a higher degree. For example, a high school graduate earns an associate degree with a specialty, followed by a four-degree in a selected industry, like engineering, and finally an M.B.A. in preparation for a corporate upper-management position.

Vertical stacking is driven by the social forces at play in what Burning Glass Technologies calls the credentials gap: the difference between the education levels of currently employed workers and those employers are demanding for new hires. According to Burning Glass, an increasing number of jobs that nondegree holders historically filled now require degrees. For example, 65 percent of postings for executive secretaries and executive assistants now call for a bachelor’s degree, while only 19 percent of those currently employed in these roles have a B.A.

Horizontal Stacking. With horizontal stacking, the level of the credential is less important than the subject matter. Learners expand their subject matter expertise by earning credentials in related fields that, collectively, prepare each person for a specific type of job. Unlike vertical stacking, there is no explicit ordinal ranking or prerequisites, although some credentials may build on others.

For example, many highly skilled, highly sought after and highly compensated IT professionals don’t follow a traditional baccalaureate path, stacking degrees vertically. Instead, they build a series of nondegree certificates and certifications horizontally across an occupational field. A learner could earn a CompTIA certificate, Microsoft Certified Solutions Expert certificate and Cisco Certified Network Associate certificate with the goal of broadening his or her skills as a systems administrator or analyst.

Value-Added Stacking. Combining the concepts of vertical and horizontal credential stacking, value-added stacking is when a learner adds an area of expertise to an existing two- or four-year degree with shorter-term credentials to prepare for a specific type of job. In South Carolina, for instance, many of today’s health care professionals follow this path. A learner could add patient care technician and phlebotomy certificates to an associate degree or supplement a bachelor’s degree in health management with an information services certificate -- all leading to a position as a medical office administrator.

Why Stackable Credentials Are Worth Defining

Increasingly, Americans are earning many kinds of credentials to improve their position in the labor market. In 2012, the U.S. Census Bureau reported that 46.3 million adults (aged 18 and over) held a professional certification or license, and 19.1 million held an educational certificate. So while Burning Glass is right that a degree still matters, as research by the Georgetown Center for Workforce Development demonstrates, nondegree credentials can have a significant impact on earnings as well.

On average, says the Georgetown University Center on Education and the Workforce, high school graduates receive a 20 percent wage premium with a certificate. And certificate holders, especially those in high-earning fields of study, do better than many with an associate or bachelor’s degree. For example, in computer and information services, male certificate holders have higher earnings than 72 percent of men with an associate degree and 54 percent of those with a bachelor’s degree. Women certificate holders in the field earn more than 75 percent of women with associate degrees and 64 percent of those with bachelor’s degrees.

At the center of credential innovation and its related lexicon are the learners and the pathways they take. Increasingly, the best advice we can give students is not simply to get the highest degree possible. Instead, we need to think clearly about occupational goals and the different ways credentials can enable access to the fields they aspire to enter.

Most learners will never know the term stackable credentials or recognize that what they’re doing when they earn follow-on credentials is stacking. Instead, the responsibility falls on higher education institutions to have a clear conception of the term as we work to make our programs truly stackable and help our learners turn more credentials into more opportunities.