Student Aid Can Be Awarded For ‘Competencies,’ Not Just Credit Hours, U.S. Says

It's official: Colleges can now award federal student aid based on measured "competencies," not just credit hours.

In a letter sent to colleges on Tuesday, the U.S. Education Department told them they may apply to provide federal student aid to students enrolled in "competency-based" programs and spelled out a process for doing so.

The long-awaited letter was issued as the department is poised to approve an application by Southern New Hampshire University to award aid based on the direct assessment of student learning. The college has served as a test case for the department as it has weighed how to extend aid to new models of learning while guarding against fraud.

At first glance, the letter does not seem all that remarkable; it simply confirms that colleges may apply for aid under the "direct assessment" provision of the Higher Education Act. That authority has existed since 2005, when Congress added the provision to the federal law to benefit Western Governors University.

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