Many in higher education say the traditional credit-hour model has been seen as restrictive.

Making federal student aid available to students enrolled in competency-based courses is more than an acknowledgement of legitimacy for nontraditional education, experts said, but rather a policy decision that could lead to a spike in competency-based classes, many of them online.

The U.S. Department of Education (ED), after months of anticipation from colleges that have long provided nontraditional education offerings, said March 16 that competency-based learning programs – not just those based on traditional credit hours, or “seat hours” – may be eligible for Title IV student aid, including Pell grants and federal student loans.

Before ED’s official announcement, government aid had not been available for those taking competency-based classes in which students can earn credit toward a degree based on prior learning.

The department’s guidance on federal aid for students in competency-based programs comes seven years after Congress first approved alternative educational systems that would award financial aid in lieu of credit hours or clock hours as the measure of student learning. Programs that “utilize direct assessment of student learning” could be eligible for student aid – the best example being Western Governors University (WGU).

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ED, in its letter to colleges and universities, “acknowledges that direct assessment has potential, limitations, and unknowns,” said Amy Laitinen, deputy director for higher education at New America Foundation, a Washington, D.C.-based think tank. “Rather than shy away from the unknowns, however, the department seems willing to sit with them. The department’s willingness to work beyond its own borders and to grapple with uncertainty are welcome signs from a federal agency, indeed.”

The best news for proponents of financial aid for competency-based programs, Laitinen said, was ED’s willingness to work closely with accreditors and universities in creating an agreed-upon alternative to the credit-hour model, which has been criticized as outdated and inflexible for nontraditional students working toward a degree while holding down a fulltime job and raising a family.


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