Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Apr 30, 2013

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Imagine a bachelor’s degree program that is only focused on understanding, rather than time spent in a classroom.

Competency-based educational programs evaluate a student’s knowledge, rather than using the standard idea of credit hours as a model for learning. Although similar models have been around for years, an important move was recently taken to open competency-based education to the greater public.

In March 2013, the U.S. Department of Education (DOE) endorsed competency-based education. One month later, on April 18, the first program was approved. The DOE announced that one institution, Southern New Hampshire University’s (SNHU) College for America, received approval for a “direct assessment” and non-credit hour learning program.

The importance of the move: the college, which was initially established in 2012, will now be eligible for Title IV, Higher Education ACT (HEA) funding.

The College for America is the first competency-based model in the United States to receive DOE approval for direct assessment provisions which focus on learning models, rather than time models. Federal financial funds, including federal student loans, will account for measurable learning instead of the most common three-credit hour programs present at most learning institutions.

Paul LeBlanc, president of SNHU, told that title IV funding is important and beneficial for a student’s ability to learn.

“Federal funds will go towards what you’ve actually learned versus what you’ve sat through,” he said.

Since the SNHU program is designed for working adults, it is offered to interested students through their employer. The cost per year is about $2,500. Instead of high overhead costs like regular colleges, the classes are online — no traditional instructors are present, only a coach and a “Peer Accountability Partner.”

Since SNHU has title IV approval, students that do not receive full funding from their employers, are able to take out federal student loans to pay for the schooling.

“Access to federal support will be big,” LeBlanc said.

LeBlanc said the initial program, which has 275 students, is only offered via an approved employer, but he plans to extend the program in the future where any student can join the program.

The College for America is currently working with employees of ConAgra Foods, Anthem Blue Cross Blue Shield and Globe Manufacturing, among 18 others. Another 120 interested companies are “in the pipeline” LeBlanc said.  

Students are not expected to show up to classes, since they do not exist, but rather to demonstrate evidence that they mastered the lessons. Students must finish tasks, which are graded by trained reviewers.

Shifting Educational Trends

Nick Gidwani, founder and CEO of, said he was surprised by the speed at which the DOE approved Title IV approval for the College of America.

He said the approval speed is ahead of where people expected competency-based programs to be, but it is a sign of where educational trends are headed.

Although brick-and-mortar college hour programs only surmise about 20 percent of higher education, its ideals dominate discussions about education in the country.

In order to change the model, large changes would have to occur.

Since competency-based educations are focused less on lectures, and more on projects and assessments, the vast amount of professors is unneeded. This could create large-scale layoffs for University’s looking towards adapting a competency-based program.

Not only are professors themselves in a potentially changing environment, but so are employer’s ability to ensure a new hire is ready for the job. One question that needs to be answered is how employers will evaluate the programs. Since they are still relatively new, the employer does not know how to compare a college graduate’s skills from the newer program.

If confusion is present, discrimination could occur.

“Will employers look at a bachelor’s degree in the same way they view a competency-based bachelor’s degree?” Gidwani questioned.

Slipping Standards

All types of educational models offer something for students. One positive of typical brick-and-mortar universities is a sense of teamwork and collaboration, Gidwani said. When an employer hires an employee with a degree of this kind, they know the graduate worked in teams and with other students.

But collaboration skills are not always enough.

LeBlanc said a frequent complaint by companies he works with is that higher education does not align well with employer’s needs. When making a presentation to employers, LeBlanc asks them if they ever hired a graduate with a bachelor’s degree that did not write or present well.

“It’s like touching a raw nerve,” he said. “Employers are really frustrated with slipping standards.”

LeBlanc said 30 years ago a bachelor’s degree meant something about a student’s cognitive abilities. That assumption is no longer definitive.

If a certain student passed an accounting class with a B-, what does that say about their ability in the course? What skills are they actually able to perform? A degree does not show either of these things.

“The transcript is a black box,” LeBlanc said.

Gidwana also agrees.

Although some programs continue to produce exemplary graduates, other programs have more opportunity for students to slack, such as business and administration degrees.

“Students are graduating with less skills and less rigorous academics,” he said.

Gidwana attributes this problem primarily to school administrations trying to maintain good public relations. Schools want to maximize their revenue and increase their brand as a distinguished school. In order to do this, schools allow students to graduate that might otherwise be unprepared for an academic career in their chosen field.

Gidwana said it is because University Presidents are concerned with their school’s endowment. Improving graduation statistics for their school improves the school brand, which eventually leads to wealthy alumni donating more money. The endowment grows and the President remains happy.

But the student’s best interest is left out.

Not Fighting Alone

The College of America is not alone.

Several other universities including Capella University, Northern Arizona University, Brandman University, and Bellevue University might join the competency-based program, by receiving federal funding.

The DOE’s passage of the College of America funding support, and potentially others, is a huge sign for higher education. Student loan debt is not reducing, and the problems that stem out of the rising debt are only multiplying.

“I can’t remember a time when higher education was on the front page so much,” LeBlanc said.

More solutions need to occur, and one could be a lower-cost educational system. Maybe the real solution is approaching higher education with an open perspective, rather than black and white.

LeBlanc said there is an “either or” mentality with higher education, and everything is treated monolithically. He said this tends to cloud the discussion about how to solve problems in the educational system.

If more universities open themselves to this option, LeBlanc said it would have an enormous impact.

“It’s really about getting the skills they need to have meaningful and stable work,” he said.