A woman studies on the Stanford University campus. Students at Southern New Hampshire University can now receive federal financial aid for a "self-paced online program" with no traditional courses or professors.

What if you could get a degree from a college with no classes, no instructors and no grades? It sounds like an ad on late-night TV. But this week, the online College for America got a big boost from the federal government. Its students will be able to receive federal student aid.

“What that really means, is that for the first time federal financial aid dollars will support actual learning as opposed to how long somebody sat at a desk,” says Paul LeBlanc, president of Southern New Hampshire University, the nonprofit school that created College for America.

Instead of racking up a certain number of credit hours for an associate degree, students at College for America have to master 120 “competencies,” from quantitative reasoning to writing and communication.

If you’re good at math, you might fly through that assessment, LeBlanc says. If not, you could take one of the many free online courses offered by other schools. The program costs $2,500 a year.

“It’s conceivable that someone could earn their Associate's degree in under six months and for $1,250,” LeBlanc says.

Right now the online program is only available to people who work at certain companies. One of them is Globe Manufacturing, in Pittsfield, N.H. It makes firefighter suits.

Competency-based degrees will not only help his workers get ahead, says owner Rob Freese. They’ll also help him assess their skills.

“It’s like getting merit badges that sort of prove competency in various subject areas,” Freese says.

Though it’s the first to gain eligibility for federal aid without using the traditional credit hour, College for America isn’t the only program experimenting with competency-based learning. It took inspiration from Western Governors University, which was founded in 1997. The University of Wisconsin plans to launch self-paced, competency-based degree programs this fall.

“Given what college costs right now, finding ways to shorten the amount of time that it takes to earn a degree is a priority,” says Sara Goldrick-Rab, associate professor of educational policy studies at UW-Madison. “However, I will say this: I think the higher priority ought to be on lowering what college costs, so that you don’t have to rush through it.”

The skills you pick up in the process of learning, she says, are important to employers, too.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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