ED Discusses Title IV Eligibility, Competency-Based Education at 2016 National Conference

By David Tolman, Training & Regulatory Assistance Staff

Most academic programs consist of a series of courses a student must successfully complete. Upon passing all of those courses, and receiving the resulting credit or clock hours, the student earns a degree or certificate.

An emerging method of measuring student performance is to evaluate what a student can do, demonstrate, or know; the student progresses toward the degree or certificate by demonstrating that he or she is competent in certain areas. Once all competencies are mastered, the student completes the program.

Title IV eligibility for these programs was presented at a Department of Education session at the 2016 NASFAA Conference.

If you don’t have any competency-based education (CBE) programs at your institution, chances are it will at least come up for discussion. Here is what you need to know:

  • Title IV aid can be awarded for most CBE programs, although the approval process can differ according to the type of CBE program.
  • Three broad ways of assessing competencies are:
    • Awarding credit or clock hours for the competencies a student demonstrates, after having engaged in some educational process in order to master the subject area;
    • Directly assessing competencies by measuring the student’s skill, knowledge, or other quality after having engaged in some educational process in order to master the subject area; and
    • Directly assessing, or assigning credit for, a student’s knowledge or skill obtained through prior learning or life experience.

Title IV aid cannot be awarded for prior learning or life experience, whether the institution awards credit or by direct assessment. Title IV aid can be awarded for the educational process a school provides for the first two methods

What are the features of an educational program that awards credit for student competency?

  • The student may learn in some format other than in classes. 
  • Whatever the format of the academic activity, the level of activity must be equivalent to the definition of a credit or clock hour, as defined in 600.2 in Title IV regulation.
  • The student might be allowed to progress at his own pace. He’s not in a class with other students. Instead, he may be expected to complete reading assignments or write essays, for example. 
  • Because the student’s progress is still measured by credit or clock hours, existing regulations apply to the administration of Title IV aid.
  • Each program does not require approval from an accrediting agency in order to be Title IV eligible, although the accrediting agency must approve of the method the institution uses to assess credit or clock hour completion.

What are the features of an educational program that performs a direct assessment of a student’s competency?

  • Credit or clock hours are not awarded as the student progresses through the program.
  • Instead, the institution establishes an equivalency to a credit or clock hour for the student’s academic activity.
  • Although the student progresses toward degree or certificate completion as she demonstrates competency in a skill, subject or content area, or quality, the institution must provide “regular and substantive” interaction with instructors and educational resources to aid in the student’s preparation.
  • Title IV regulations specific to direct assessment programs are contained in 668.10. 
  • Each direct assessment program must be separately accredited before an institution can apply for Title IV eligibility for the program.
  • Foreign institutions cannot award Title IV aid for direct assessment programs.

Remember, this is just a summary. An institution that is seriously considering offering a CBE program is advised to consult the following sources before pursuing Title IV aid:

  • 668.10;
  • GEN-14-23; and
  • GEN-13-10.


Publication Date: 8/8/2016

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