Feds Leaning Toward Competency-based Financial Aid


The way many colleges distribute financial aid to their students may see an overhaul in the near future. In a recent announcement, the U.S. Department of Education told schools that they can begin providing federal student aid based on “competencies,” rather than simply on the number of credit hours for which a student enrolls.

According to the Council for Education on Public Health, “Competency-based education is focused on outcomes, or competencies, that are linked to workforce needs, as defined by employers and the profession.” By linking financial aid to student competencies, the government is allowing schools to offer a more efficient — and hopefully less expensive — form of education.

Students in competency-based universities learn online at their own pace. When a student feels they have complete command of a subject, they can take a test which will allow them to test out of the subject. If they pass, they will not have to take classes in the subject again, and they will be able to graduate more quickly.

This differs from traditional classroom delivery, in which students are evaluated by the credit-hour, which was pioneered by the Carnegie Foundation when it established the credit hour in 1906 as a measure of course work.

According to the Western Association of Schools and Colleges, one of the regional governing boards of colleges and university accreditation, “a credit hour is an amount of work represented in intended learning outcomes and verified by evidence of student achievement that is an institutionally established equivalency that reasonably approximates not less than one hour of classroom or direct faculty instruction and a minimum of two hours of out-of-class student work each week for approximately fifteen weeks for one semester hour of credit.”

Most online-only or primarily-online schools, such as Southern New Hampshire University, Capella University and Western Governors University would be considered competency-based schools. WGU’s website says its competency-based approach is “based on what you know and what you can do.”

Many more traditional schools, however, are entering the realm of online, asynchronous course delivery. This approach to education means that competency-based financial aid and education may leave its current, limited purview.

Lili Vidal, director of the financial aid and scholarship department at California State University Northridge, says she doesn’t believe increased financial aid for these schools will result in less aid for traditional students.

“It’s too early to tell what the impact on aid availability might be if other institutions engage in this new program,” Vidal said.“This is in the very early stages.”

The U.S. Department of Education has outlined the process for which competency-based schools can apply for federal aid.

In the letter sent out to colleges, it states “the Higher Education Reconciliation Act of 2005 provided that instructional programs that use direct assessment of student learning, or that recognize the direct assessment by others of student learning, in lieu of measuring student learning in credit hours or clock hours, may qualify as eligible programs if the assessment is consistent with the institution’s or program’s accreditation.”

According to a comment in the CSUN student newspaper, California State University Northridge, economics professor Shirley Svorny said that competency-based financial aid might benefit certain students.

“Not everybody is the same, and not everybody learns the same way,” she said.

With competency-based education, she feels fraud is an issue with regards to taking tests, but adds that it can be an issue in larger, in-person classes, too.

“Sometimes in larger classes, I ask for I.D. when we we have tests,” she said.

Svorny also said that a student should still qualify for aid if they can complete a course in less than a semester’s time.

“Financial aid is meant to help low income students, regardless of where they go to school,” Svorny said. “It’s a win-win for them if they can complete a class in less than a month.”

David Thomas, a U.S. Department of Education spokesperson said it is ultimately up to the Secretary of Education to determine if the school is eligible to receive federal aid.

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