petency-based 
education’ 
means 
education 
that— 
‘‘(i) measures academic progress and 
attainment— 
‘‘(I) by direct assessment of a 
student’s level of mastery of com-
petencies; 
‘‘(II) by expressing a student’s 
level of mastery of competencies in 
terms of equivalent credit or clock 
hours; or 
‘‘(III) by a combination of the 
methods described in subclauses (I) or 
(II) and credit or clock hours; and 
‘‘(ii) provides the educational content, 
activities, and resources, including sub-
stantive instructional interaction, including 
by faculty, and regular support by the in-
stitution, necessary to enable students to 
learn or develop what is required to dem-
onstrate and attain mastery of such com-
petencies, as assessed by the accrediting 
agency or association of the institution of 
higher education. 
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‘‘(B) 
COMPETENCY-BASED
EDUCATION 
PROGRAM.—Except as otherwise provided, the 
term ‘competency-based education program’ 
means a postsecondary program offered by an 
institution of higher education that— 
‘‘(i) provides competency-based edu-
cation, which upon a student’s demonstra-
tion or mastery of a set of competencies 
identified and required by the institution, 
leads to or results in the award of a certifi-
cate, degree, or other recognized edu-
cational credential; 
‘‘(ii) ensures title IV funds may be 
used only for learning that results from in-
struction provided, or overseen, by the in-
stitution, not for the portion of the pro-
gram of which the student has dem-
onstrated mastery prior to enrollment in 
the program or tests of learning that are 
not associated with educational activities 
overseen by the institution; and 
‘‘(iii) is organized in such a manner 
that an institution can determine, based on 
the method of measurement selected by the 
institution under subparagraph (A)(i), 
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what constitutes a full-time, three-quarter 
time, half-time, and less than half-time 
workload for the purposes of awarding and 
administering assistance under title IV of 
this Act, or assistance provided under an-
other provision of Federal law to attend an 
institution of higher education. 
‘‘(C) COMPETENCY
DEFINED.—In this 
paragraph, the term ‘competency’ means the 
knowledge, skill, or ability demonstrated by a 
student in a subject area.’’. 
SEC. 4. GENERAL PROVISIONS RELATING TO STUDENT AS-
SISTANCE. 
(a) DEFINITIONS OF ACADEMIC YEAR AND ELIGIBLE 
PROGRAM.—Section 481 of the Higher Education Act of 
1965 (20 U.S.C. 1088) is amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3)(A) For the purpose of a competency-based edu-
cation program the term ‘academic year’ shall be the pub-
lished measured period established by the institution of 
higher education that is necessary for a student with a 
normal full-time workload for the course of study the stu-
dent is pursuing (as measured using the value of com-
petencies or sets of competencies required by such institu-
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tion and approved by such institution’s accrediting agency 
or association) to earn— 
‘‘(i) one-quarter of a bachelor’s degree; 
‘‘(ii) one-half of an associate’s degree; or 
‘‘(iii) with respect to a non-degree or graduate 
program, the equivalent of a period described in 
clause (i) or (ii). 
‘‘(B)(i) A competency-based education program that 
is not a term-based program may be treated as a term- 
based program for purposes of establishing payment peri-
ods for disbursement of loans and grants under this title 
if— 
‘‘(I) the institution of higher education that of-
fers such program charges a flat subscription fee for 
access to instruction during a period determined by 
the institution; and 
‘‘(II) the institution is able to determine the 
competencies a student is expected to demonstrate 
for such subscription period. 
‘‘(ii) Clause (i) shall apply even in a case in which 
instruction or other work with respect to a competency 
that is expected to be attributable to a subscription period 
begins prior to such subscription period. 
‘‘(iii) In a case in which a competency-based edu-
cation program offered by an institution of higher edu-
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cation is treated as a term-based program under clause 
(i), the institution shall review the academic progress of 
each student enrolled in such program in accordance with 
section 484(c), except that such review shall occur at the 
end of each payment period.’’; and 
(2) in subsection (b), by striking paragraph (4) 
and inserting the following: 
‘‘(4) For purposes of this title, the term ‘eligible pro-
gram’ includes a competency-based program that— 
‘‘(A) has been evaluated and approved by an ac-
crediting agency or association that— 
‘‘(i) is recognized by the Secretary under 
subpart 2 of part H; and 
‘‘(ii) has evaluation of competency-based 
education programs within the scope of its rec-
ognition 
in 
accordance 
with 
section 
496(a)(4)(C); or 
‘‘(B) as of the day before the date of enactment 
of the CBE Act of 2019, met the requirements of 
a 
direct 
assessment 
program 
under 
section 
481(b)(4) (as such section was in effect on the day 
before such date of enactment).’’. 
(b) STUDENT ELIGIBILITY.—Section 484 of the 
Higher Education Act of 1965 (20 U.S.C. 1091) is 
amended— 
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(1) in subsection (b), by adding at the end the 
following: 
‘‘(6) For purposes of competency-based education, in 
order to be eligible to receive any loan under this title for 
an award year, a student may be enrolled in coursework 
attributable only to 2 academic years within the award 
year.’’; and 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (B)— 
(I) by striking ‘‘the student has a 
cumulative’’ and inserting the fol-
lowing: ‘‘the student has—’’ 
‘‘(i) a cumulative;’’; 
(II) by striking ‘‘the second’’ and 
inserting ‘‘each’’; 
(III) by striking the period at the 
end and inserting ‘‘; or’’; and 
(IV) by adding at the end the fol-
lowing: 
‘‘(ii) for the purposes of competency-based 
programs, a non-grade equivalent demonstra-
tion of academic standing consistent with the 
requirements for graduation, as determined by 
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‘‘(C) with respect to an undergraduate program 
measured in clock hours, a period that is no longer 
than 150 percent of the published length of the edu-
cational program, as measured by the cumulative 
number of clock hours the student is required to 
complete and expressed in calendar time; and 
‘‘(D) with respect to a graduate program, a pe-
riod defined by the institution that is based on the 
length of the educational program.’’. 
(c) RECOGNITION OF ACCREDITING AGENCY OR AS-
SOCIATION.—Section 496 of the Higher Education Act of 
1965 (20 U.S.C. 1099b) is amended— 
(1) in subsection (a)(4)— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end; and 
(B) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) such agency or association demonstrates 
the ability to review, evaluate, and assess the quality 
of any instruction delivery model or method such 
agency or association has or seeks to include within 
its scope of recognition, without giving preference to 
or differentially treating a particular instruction de-
livery model or method offered by an institution of 
higher education or program except that, in a case 
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in which the instruction delivery model allows for the 
separation of the student from the instructor— 
‘‘(i) the agency or association requires the 
institution to have processes through which the 
institution establishes that the student who reg-
isters in a course or program is the same stu-
dent who participates in, including, to the ex-
tent practicable, testing or other assessment, 
and completes the program and receives the 
academic credit; and 
‘‘(ii) the agency or association requires 
that any process used by an institution to com-
ply with the requirement under clause (i) does 
not infringe upon student privacy and is imple-
mented in a manner that is minimally burden-
some to the student; and 
‘‘(C) if such an agency or association evaluates 
or assesses the quality of competency-based edu-
cation programs, the agency’s or association’s eval-
uation or assessment— 
‘‘(i) shall address effectively the quality of 
an institution’s competency-based education 
programs as set forth in paragraph (5), except 
that the agency or association is not required to 
have separate standards, procedures, or policies 
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for the evaluation of competency-based edu-
cation; 
‘‘(ii) shall establish whether an institution 
has demonstrated that its program satisfies the 
definitions in section 103(25); and 
‘‘(iii) shall establish whether an institution 
has demonstrated that it has defined an aca-
demic year for a competency-based program in 
accordance with section 481(a)(3).’’; 
(2) in subsection (c)(1), by inserting ‘‘or com-
petency-based education’’ after ‘‘distance education’’; 
(3) in subsection (n)(3), by inserting ‘‘, or com-
petency-based education programs,’’ after each oc-
currence of ‘‘distance education courses or pro-
grams’’; and 
(4) by adding at the end the following: 
‘‘(r) WAIVER.—The Secretary shall establish a proc-
ess through which an agency or association may seek to 
have a requirement of this subpart waived, if such agency 
or association— 
‘‘(1) demonstrates that such waiver is necessary 
to enable an institution of higher education or pro-
gram accredited by the agency or association to im-
plement innovative practices intended to— 
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‘‘(A) reduce administrative burdens to the 
institution or program without creating costs 
for the taxpayer; or 
‘‘(B) improve the delivery of services to 
students, improve instruction or learning out-
comes, or otherwise benefit students; and 
‘‘(2) describes the terms and conditions that 
will be placed upon the program or institution to en-
sure academic integrity and quality.’’. 
Æ 
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