Competency-Based Education Would Halve Higher-Ed Costs, Study Finds

Published December 7, 2016

Colleges and universities could cut the cost of some of their degrees by as much as 50 percent by using competency-based education (CBE), a new study has found.

CBE is an emerging model for higher education that consists of online learning in which students move forward at their own pace, completing periodic assessments that show they know the material rather than building academic credits based on a certain number of “credit hours” of study.

CBE programs often “unbundle” faculty roles, with academic faculty members designing the courses, and others—faculty with expert knowledge plus lower-paid “academic success coaches”—working directly with students.

The report, titled “A Study of Four New Models and Their Implications for Bending the Higher Education Cost Curve,” prepared by the rpkGROUP consulting firm and funded by the Lumina Foundation, studied CBE programs at four institutions: the University of Wisconsin-Extension and Kentucky Community and Technical System (both public universities), Brandman University (a private nonprofit university), and Walden University (a private for-profit college).

“All four institutions … made efforts to ‘deconstruct’ the credit hour in some respect, moving toward new methods of student engagement and assessment of student learning,” the study said.  

After six years, the report estimates, operating costs for these schools will be half the cost of traditional academic programs, but it may take longer to recoup their investment costs. Much depends on “aggressive growth” in enrollment and implementation of additional efficiencies.

Tuition for CBE programs is typically far below standard academic tuition, so cost control is essential.

“Current CBE programs have quickly settled around a price range of $5,000 to $6,000 in annual tuition,” the report states. “This price range reflects historical pricing set by industry leader Western Governors University, combined with a desire to maximize access to CBE programs.”

Different Types of CBE

One of the four programs researchers studied is the University of Wisconsin (UW) Extension School’s “Flexible Option,” which charges students $2,250 for three months, during which time they may demonstrate success in as many competencies as they can. Alternatively, students can pay $900 for each “competency set.”

At UW-Extension, bachelor’s degrees are offered as “completion degrees.” That is, most students come in with transferred credits, although they can get an associate’s degree from UW-Extension first. The school offers CBE bachelor’s degrees in nursing, information science and technology, and biomedical sciences diagnostic imaging. It also offers shorter-term certificates. Some CBE schools offer two-year associate’s degrees or master’s degrees.

Between 200 and 600 institutions of higher education are considering adopting CBE for some courses of study, the report says.

CBE ‘Still Being Refined’

William Clements, dean of the College of Graduate and Continuing Studies at Norwich University, says CBE programs may incur higher costs than administrators expect.

“Any educational program that is thoughtfully constructed, based on pedagogical research, and properly supported will have resource demands,” Clements said. “Understanding those demands is important, and in my experience, having an online program does not necessarily result in cost reductions of half of the resources needed to deliver it in a traditional setting.

“Current approaches to CBE are still being developed and refined, so I think it is premature to conclude that the approach will result in both cost and time savings,” Clements said. “An often-undiscussed risk of CBE is that it may actually take longer to complete if the student has difficulty in mastering competencies that will allow him or her to continue.” 

Appeal to Employers

Alana Dunagan, a higher education researcher at the Christensen Institute, which focuses on disruptive educational technologies, says CBE has a bright future.

“If employers can choose between a student with a degree that has taught clear skills, they will always choose that over a ‘black box’ diploma where it’s unclear what a student has learned,” Dunagan said. “As employers build more awareness of CBE grads, we expect to see a preference develop for those types of degrees. For students, too, having assessment built into the learning process makes it a more gratifying experience than an end-of-semester pass-or-fail final exam. We all want to feel like we are building mastery.”

Jane S. Shaw ([email protected]) writes from Raleigh, North Carolina.


Donna M. Desrochers and Richard L. Staisloff, “A Study of Four New Models and Their Implications for Bending the Higher Education Cost Curve,” rpkGROUP, October 2016: