Common Findings Corner: Clock-to-Credit Conversion Update

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Vintage clock hanging on a chain on the background of old books. Old watch as a symbol of passing time. Concept on the theme of history, nostalgia, old age. Retro style.When it comes to clock-to-credit hour conversions, those who has been in the Title IV world for a while are probably having a bit of déjà vu right now. Several years back, the Department of Education changed the clock-to-credit hour conversion formula to include “work outside of class,” also known as out-of-class work. This meant that the formula of 20 clock hours per quarter credit or 30 clock hours per semester/trimester were effectively changed to take into account out-of-class hours, resulting in a new clock-to-credit conversions of 25 clock hours to quarter credit or 37.5 clock hours per semester/trimester credit. This additional 5 hours/7.5 hours per credit could be in the form of out-of-class work. 

Most institutions were able to use the out-of-class guidance to effectively keep their packaging the same as it was in the past. However, to make this happen, institutions had to add out-of-class work to fill the gap clock hour these new requirements created, update their catalogs and enrollment agreements, adjust their Eligibility and Certification Approval Report (ECAR) and make any other necessary changes within their materials to account for the new out-of-class requirements. The end result meant not many actual changes to programs but was a headache for institutions to update accordingly.

The recent update

As of July 1, 2021 (or perhaps earlier for those of you who decided to early implement), the Department is no longer considering out-of-class hours for the purposes of the clock-to-credit conversion. This means that the formulas are going back to the way they were before these changes were made, reverting back to 20 clock hours per quarter credit and 30 clock hours per semester/trimester credit.

As in the past, only certain programs are impacted by these changes. If a program is a clock hour program, a degree-granting program or is fully transferrable to a degree-granting program, the Department’s minimum clock-to-credit hour conversion doesn’t impact you. However, for any certificate or diploma programs that are not fully transferrable to a degree program, the aforementioned updates will impact these programs. 

Institutions’ options

There are a few options for making this transition, as not all programs will have a clean cut-off on July 1, 2021. Institutions have the following choices:

  • For student’s currently enrolled in an impacted program, an institution can chose to teach the program in accordance with the existing conversion formula in place. This will help make things a little bit more clean and tidy, as conversions aren’t changing mid-program.
  • For new students, students will be enrolled under the new conversion formulas.
  • Lastly, for any students that are enrolled in a program that crosses over July 1, 2021, an institution may choose to switch conversion formulas at the end of the payment period the students are currently enrolled in.

If you are unaware of these changes or have not implemented them yet, there is no time like the present to get the ball rolling. Guidance for these changes can be found in 34 CFR 668.8(k) and (l) and also at the Federal Student Aid Knowledge Center. If you use a third-party servicer, chances are they most likely have reached out to you to address any required updates. If you haven’t heard anything and feel your programs may be impacted, be sure to reach out and go over these changes. You can contact our team using the following form.  

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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