Audit Faults Reviews of Competency-Based Programs’ Eligibility for Student Aid

October 03, 2014

The Education Department has fallen short in evaluating risks when it reviews applications from competency-based learning programs to receive federal student aid, the department’s Office of Inspector General charged in an audit report released this week.

Competency-based learning programs, which are also known as "direct assessment" programs, award credit based on the mastery of specific skills or sets of material rather than hours spent in the classroom.

Since the department set criteria for approving programs’ eligibility to receive federal student aid about a year and a half ago, five colleges have applied and two programs—at Southern New Hampshire University and Capella University—have been approved.

One condition a program must meet to win that approval is to be accredited by a regional accrediting agency. Another is that its students meet on a "regular and substantive basis" with a faculty member to discuss their progress in the program.

The inspector general’s questions about the Education Department’s process for approving applications include whether it follows up with the accrediting agency to determine how a program’s accreditation was approved, and whether it independently verifies information from the programs.

For example, the audit report says, the department approved an application for a program at Southern New Hampshire without conducting its own review of how students would meet with a faculty member to review their progress through the program.

In its application, the university had said that the student-faculty meetings would be conducted by a "coach"—defined as someone with experience counseling and coaching students—but did not say whether the coach would be a faculty member.

The report says the Education Department should have sought additional information to clarify the faculty role in guiding students, but instead it simply accepted the findings of the accreditor.

"Reliance on the accrediting agency is not sufficient to evaluate whether a school is in compliance" with the requirements for eligibility to receive federal student aid, the report says.

Paul LeBlanc, the university’s president, said the inspector general’s report "neglected to account for the faculty engagement around" student projects and assessments. When the department initially reviewed the program, Mr. LeBlanc said via email, staff members were "very pleased" with the student-faculty interactions.

But the inspector general’s report says that, ultimately, the department’s decision not to conduct its own review threatens the process of approving programs for federal student-aid funds.

The key concern is that the department could rubber-stamp programs that essentially amounted to correspondence programs—which are ineligible for federal student aid—if it did not conduct a thorough review of each application.

In its response to the inspector general’s report, the Education Department said that it would re-evaluate the approval process and create a "checklist" of the federal requirements for approval of federal student-aid eligibility.