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Competency-based Learning Programs Eligible for Title IV Student Aid



By: Brendan

On Tuesday, March 19, the Department of Education released a “Dear Colleague” letter reminding higher education institutions that offer competency-based learning opportunities that they may be eligible to participate in the Title IV federal student aid (FSA) program of the Higher Education Act (HEA).

In recent years, programs offering students the flexibility to learn at their own pace have been growing at higher education institutions. These creative, competency-based learning programs, also known as direct assessment programs, are available for degree and non-degree programs, including many CTE programs. While a number are offered in credit or clock hours and can be accommodated under the current title IV, an increasing number of these direct assessment programs are not offered in credit or clock hours.

The letter issued by the department addresses the eligibility of those competency-based programs not offered in credit or clock hours to offer their students Title IV aid, including Pell grants and federal student loans, through a provision in the Higher Education Reconciliation Act of 2005 (HERA). The letter also lays out the application process for institutions to apply for eligibility under HERA.

The department issued regulations for direct assessment programs in November 2006 to determine eligible programs. Under those regulations, the entire program applying for title IV eligibility must be provided by direct assessment. Programs offered partially by direct assessment and partially with credit or clock hours are not eligible.  Title IV funds may also not be awarded for learning or mastery obtained prior to enrollment in a direct assessment program.

In addition, programs applying for eligibility must be able to:

  • Specify the equivalent number of credit or clock hours a direct assessment program constitutes, including the reasoning behind the equivalency.
  • Demonstrate that its institutional accrediting agency or state licensing body has agreed with the institutions assessment of its credit or clock hour equivalencies.
  • Demonstrate that its institutional accrediting agency has reviewed and approved its offering of the direct assessment program.
  • Address how it plans to measure satisfactory academic progress (SAP) for students in the direct assessment program.
  • Address how or whether the financial aid system will be configured to process aid for students in the direct assessment program.

You can find step-by-step instructions on how your competency-based learning program can apply for Title IV eligibility directly below the “Dear Colleague”letter.

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