This commentary was originally featured in Forbes on March 27, 2018. 

College students and their parents find it increasingly difficult to cope with tuition hyperinflation and historically high student-loan debt. Over the last 30 years, the average tuition for a U.S. bachelor’s degree at a traditional four-year college increased more than 15 times faster than the average household income in the United States. Students who borrow graduate with an average of $27,000 in student loans. Student loan defaults slow economic growth by limiting access to credit, stifling entrepreneurship, and reducing long-term buying power.

In an effort to address this crisis, we at the Texas Public Policy Foundation commissioned Goldman Insights (Joseph Goldman, Phoebe Long, and Lillian Leone) to study of the possibilities of an alternative to traditional higher education—competency-based education (CBE). Under CBE, students earn their degrees by demonstrating their skills and knowledge in required subjects through a series of assessments. As with traditional education, they take tests and write papers; unlike traditional education, CBE degrees do not focus on “seat time” or credit hours. Rather, CBE degrees aim to certify that all its graduates are competent in their fields at or beyond a specific standard. Competency-based bachelor’s degree programs offer an alternative for nontraditional students who may not have the time or resources to complete a four-year program yet still desire a rigorous, meaningful education.

In order to develop a robust understanding of different fields within CBE, we analyzed graduates of three different competency-based programs in teaching, nursing, and organizational leadership.

What we found bodes well for students, especially those from lower-income backgrounds.

The first paper published from the Competency-Based Education: Graduate Outcomes Study (CBE GO, I) is titled, “Career and Financial Outcomes of Graduates of Competency-based Higher Education Programs.” In it, we surveyed graduates from two leading competency-based courses of study, the Associate Degree in Nursing (ADN) from an anonymous university (Institution X) and the Bachelor of Arts degree from the Teachers College at Western Governors University (WGU). We measured the career and financial outcomes of these graduates with those from other comparable traditional nursing and teaching programs. In addition, we interviewed graduates of South Texas College’s (STC) CBE degree in Organizational Leadership to gauge their experiences and career outcomes.

The findings of the first part of our CBE study suggest that CBE degree programs such as the Associate Degree of Nursing at Institution X and the BA degree at WGU’s Teachers College may be financially more attainable for students from a lower socio-economic background, thus opening the door for more Americans to pursue registered nurse (RN) and teaching credentials.

With regard to the CBE program in nursing (Associate Degree of Nursing), Institution X graduates were assessed using a modified version of the Work Readiness Scale, developed by Arlene Walker of Deakin University. They were also asked grit-related questions developed by Dr. Angela Duckworth as a part of her Short Grit Scale. Institution X graduates scored significantly higher in all areas, including social intelligence, organizational acumen, work competence, personal management, grit, and work readiness overall. Non-Institution X graduates surveyed who borrowed money accumulated 2.3 times more debt during their nursing education than Institution X graduates.

Interestingly, although fewer graduates from Institution X received financial assistance toward their tuition, more graduated debt-free than non-Institution X graduates.

With regard to the CBE program in teaching, WGU graduates scored significantly higher on work readiness overall as well as grit, organizational acumen, and personal management. Twenty-five percent more WGU graduates took loans to pay for their degrees. However, of participants who took out loans while pursuing their teaching degree, non-WGU students graduated with 49 percent ($10,000) more student debt. The annual income of surveyed WGU graduates is 21 percent higher than that of non-WGU graduates, and WGU graduates reported higher average salaries across all workplaces.

With regard to the CBE degree in Organizational Leadership, the majority of participants in the South Texas College (STC) program said they would not have received a recent promotion without their STC degree. At the same time, a common concern among respondents was high instructor turnover and a high dropout rate among students. Given the relative youth of the program, many participants noted progress in these areas and expected continued improvement over time.

The Learning Policy Institute projects that the demand for well-trained teachers will rise to an additional 300,000 per year by 2020, and teacher shortages could reach 112,000 by 2018. By offering a flexible and accessible teacher preparation program, WGU may help increase the supply of educated teachers and provide some relief from forecasted teacher shortages.

In critical industries with chronic labor shortages like education and health care, bolstering the labor supply is necessary to ensuring that essential services are accessible and affordable. The large shortfall of qualified nurses and teachers in the U.S. is a symptom of an education system and labor market that have failed to work in tandem to meet the growing needs of American society.

As more Americans gain access to reliable internet connections and labor demand continues to shift away from manufacturing into service industries, flexible, online learning opportunities can help increase access for a growing segment of people looking for a career change. Enrollment in online, competency-based programs has grown rapidly in the last decade, producing a large increase in CBE graduates in the workforce. While numerous research organizations, educational institutions, and state legislatures have speculated about the competence of CBE program alumni, relatively little research has been done to explore the outcomes of CBE graduates.

Our survey-based, quantitative study of CBE graduates finds no evidence that CBE graduates in the programs studied had less favorable outcomes than the non-CBE graduates. In fact, incomes of both WGU and Institution X graduates were significantly higher than those of graduates of traditional programs.

The qualitative portion of the study focusing on the CBE Organizational Leadership degree program at South Texas College found that many respondents noted that this program was one of few education alternatives to the University of Texas-Rio Grande Valley—and was much more affordable. The ability to reach communities of low socioeconomic status is extremely important in order to alleviate shortages in well-paying, critical fields and in improving social mobility.

Clearly, three programs cannot provide a fully representative sample of all CBE higher education, so additional research is necessary to confirm the outcomes of CBE program alumni in nursing, teaching, and other fields.

Nevertheless, we are confident that the claim that CBE program graduates are not prepared for the workforce or do not have at least comparable outcomes to traditional programs cannot be supported.