$1B Lumina Foundation Backs New Education Credentials Framework

Advocates of online education say it can provide learning opportunities as good as college coursework, but at a much lower cost. The broad offerings of edtech companies now range from foreign language instruction to history lessons to computer programming. What non-traditional education providers have always needed, though, is the ability to award their students a credential that’s as well regarded by potential employers as a college sheepskin.

Online platforms have already sprung up to display alternative credentials, such as certificates awarded by non-accredited code schools. Some efforts are now being made to evaluate and rank all those new types of credits—and even compare them to college course units.

Among the advocates pushing for this parallel system of skills verification is an Indianapolis non-profit with an endowment of more than a billion dollars—the Lumina Foundation. Lumina, which focuses solely on education, is devoting substantial time and resources to the drive toward an alternative credentials infrastructure.

In June, Lumina announced it was initiating a national dialog on credentials among business groups and others concerned about education. In October, Lumina held a one-day conference on the subject in Washington, DC, inviting employers, workforce development agencies, industry association representatives, education leaders, philanthropic organizations, think tanks, and students.

Lumina sees a need for affordable learning and training opportunities after high school for millions of Americans, both to sustain the country’s 21st Century economy and to boost the incomes of people who might otherwise languish in low-paid jobs.

“New credentials have value in the marketplace,” says Jamie Merisotis, Lumina’s president and CEO.

In June, Lumina re-upped its funding for a George Washington University research group that’s developing a registry of credentials of all types—from college to code schools—-along with details on the way various outside bodies accredit or validate them.

The Indianapolis foundation recently made its first direct investment in a private company, New York-based Credly, which serves not only issuers of alternative credentials, but also universities that grant degrees. Credly helps its clients design electronic badges that represent specific gains in learning, which students can display on their LinkedIn profiles, on Facebook, and other sites where employers can see them.

Lumina has also invested in venture capital firms that back education companies, including New York-based University Ventures and Fulton, MD-based New Markets Venture Partners. Those two firms led the recent $2.5 million seed financing round for Credly.

The foundation’s work on credentials stems from a policy shift at the organization in early 2008, when it brought in Merisotis as its new CEO.

Lumina, founded in mid-2000, started life as a grant-making organization that supported college and university efforts to increase access to traditional higher education. For example, in early 2004 the non-profit awarded more than $866,000 to nine regional campuses operated by Indiana University, Purdue University, and the University of Southern Indiana. The money fostered programs that helped undergraduate students overcome obstacles and stay in school. An important aim was to increase degree completion rates for students at risk, including first-generation college students, adult learners, minority members, and low-income students.

By 2008, Merisotis says, new learning options were “unfolding before our eyes” as an affordable resource for … Next Page »

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Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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