GEN-13-10 March 19, 2013 Subject: Applying for Title IV Eligibility for Direct Assessment (Competency-Based) Programs
Summary: This letter provides guidance to institutions1 that wish to have direct assessment (competency-based) programs considered for title IV, Higher Education Act (HEA) program eligibility. The letter outlines how institutions can have competency-based programs approved under the current regulations on direct assessment programs.
Over the last several years, some institutions of higher education have developed new and creative program models in which students are provided with the means to acquire the knowledge and skills at an individual pace to demonstrate achievement of specific competencies identified as necessary to complete a program and earn a degree or other credential. A majority of these program models are offered in credit or clock hours and can be accommodated under the current title IV, student financial aid regulations as non-term programs. An increasing number, however, are not offered in credit or clock hours, and many of the institutions offering such programs want them approved for participation in the title IV, HEA programs.
Section 8020 of the Higher Education Reconciliation Act of 2005 (HERA) (Pub. L. 109-171) amended the Higher Education Act of 1965, as amended (HEA), and established the eligibility of direct assessment programs to participate in the title IV, HEA programs. Specifically, the HERA 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. The HERA also provided that the Secretary of Education must initially determine whether each program for which an institution proposes to use direct assessment is an eligible program.
The Department of Education (the Department) published an interim final rule implementing the HERA provisions on August 9, 2006, and subsequently published a final rule on November 1, 2006. Those final regulations, located in 34 CFR 668.10, define a “direct assessment program,” outline the procedures and requirements for an institution that offers such a program to apply for the program to be determined an eligible program, and specify limitations on the use of title IV,
1 The guidance in this Dear Colleague Letter generally applies to institutions that currently participate in the title IV, HEA programs and wish to add a direct assessment program. Institutions that are not currently participating should contact their school participation division for instructions on how to complete the application process.
1HEA program funds. Under current regulations, the entire program must be provided by direct assessment. Those offered partially with credit or clock hours and partially via direct assessment are not eligible programs.
Generally, 34 CFR 668.10 includes the following requirements:
• Instead of using credit hours or clock hours as a measure of student learning, instructional programs may use direct assessment of student learning, or recognize the direct assessment by others of student learning. Examples of direct measures include projects, papers, examinations, presentations, performances, and portfolios.
• An institution that wishes to award Federal Student Aid (FSA) funds in a program using direct assessment must apply for approval from the Department. The application must specify the equivalent number of credit or clock hours for a direct assessment program (including how equivalencies will be established if students are permitted to take less than the entire program based on an assessment conducted at the outset). The Secretary will use these equivalencies to determine whether the program meets the minimum requirements for an academic year and as the basis for payment period and award calculations.
• As a part of its application, the institution must explain how it determined the equivalent number of credit or clock hours for the program, i.e., its methodology for determining these equivalencies.
• An institution must demonstrate that its institutional accrediting agency has reviewed and approved its offering of the direct assessment program.
• An institution must demonstrate that its institutional accrediting agency or State licensing body has agreed with the institution’s assessment of its credit or clock hour equivalencies.
• A direct assessment program may use learning resources (e.g., courses or portions of courses) that are provided by entities other than the institution providing the direct assessment program without regard to the limitations on written arrangements between an eligible institution and an ineligible institution or organization under 34 CFR 668.5(c).
• Federal Student Assistance (FSA) funds may be awarded only for learning that results from instruction provided, or overseen, by the institution. FSA funds cannot be awarded for any portion of the program based on study or mastery obtained prior to enrollment in the program, or based on tests of learning that are not associated with educational activities overseen by the institution.
• Several types of programs and coursework that might otherwise be eligible for FSA purposes are not eligible if they involve direct assessment, including:
o Programs at foreign schools;
o Preparatory coursework required for entry into an eligible program; and
o Courses necessary for an elementary or secondary school teaching credential or certificate.
• Remedial coursework measured through direct assessment is not eligible for title IV, HEA program funds. However, remedial coursework offered in credit or clock hours in conjunction with a direct assessment program is eligible for FSA funds.
• If the institution plans to make changes to the program that would affect any of the information provided in its application to add a direct assessment program, it must obtain prior approval from the Department by reapplying.
It is imperative that faculty and academic officials work closely with their institution’s financial aid administrators throughout the process of developing a direct assessment program and completing the application for title IV, program eligibility to ensure that all applicable aspects of title IV, program eligibility are addressed and that the program can be operationalized for title IV, HEA purposes. In addition to the criteria in 34 CFR 668.10 listed above, an institution must demonstrate that the program meets the financial aid-related components in §668.10(a). In its application, an institution must explain the method for reasonably equating the direct assessment program to credit or clock hours and related parameters of the program, including minimum weeks of instructional time, payment period, how an academic activity will take place during each week, and the definition of a full-time student. An institution should also address issues such as how it plans to measure satisfactory academic progress (SAP) for students in the direct assessment program and how or whether the financial aid system will be configured to process aid for students in the program.
For more detailed information on the eligibility requirements for a direct assessment program, please refer to the regulations at 34 CFR 668.10 and to Volume 2, Chapter 2 of the FSA Handbook. In addition, the attachment to this Dear Colleague Letter contains step-by-step instructions that an institution should follow in completing the E-App to apply to have a competency-based program approved to participate in the title IV, HEA programs. While there is no prescribed, uniform competency-based education model or approach, the Department will work closely with interested institutions as they move through the approval process. We encourage institutions with competency-based program models to apply for title IV, program eligibility under the existing framework for direct assessment programs.
Competency-based approaches to education have the potential for assuring the quality and extent of learning, shortening the time to degree/certificate completion, developing stackable
credentials that ease student transitions between school and work, and reducing the overall cost of education for both career-technical and degree programs. The Department plans to collaborate with both accrediting agencies and the higher education community to encourage the use of this innovative approach when appropriate, to identify the most promising practices in this arena, and to gather information to inform future policy regarding competency-based education. Currently, the direct assessment authority in the HEA is the mechanism through which title IV, HEA funds can be provided for competency-based education, and we understand that it may not adequately accommodate this educational model. The Department intends to use what we learn from participating institutions to inform future discussions regarding the reauthorization of the HEA.
For general questions about direct assessment programs, please contact Kay Gilcher by telephone at 202-219-7011 or by e-mail at Kay.Gilcher@ed.gov.
David A. Bergeron
Acting Assistant Secretary
for Postsecondary Education