Clock Hour, Credit Hour,Clock-to-CreditWhat Are We?Presented by Jay Alexander, CPAWilke & Assoc., CPA’[email protected] 29, 2019

GENERAL OVERVIEW: Schools are not clock hour or credit hour, their programs of study are.Therefore, schools may offer both credit hour programs and clock hourprograms. Educational credits are provided by Accreditors and approved and/oraccepted by States. SFA financial aid hours (both clock and credit) are granted by the U.S.Department of Education (USDE) and will be acknowledged on the ECAR. For credit hour programs, the USDE ECAR will likely reflect both the credithours as well as the clock hours for each approved program. This does notindicate that the program must be considered clock hour. THE SFA FINANCIAL AID CREDITS REFLECTED ON THE USDE ECAR ARE NOTNECESSARILY CORRECT (will be discussed later). Schools may offer semester credit hour programs and taught in quarters,and may offer quarter credit hour programs taught in semesters. Thiscreates non-standard terms.

What is a clock hour? A period of time consisting of: 1. A 50- to 60-minute class, lecture, or recitation in a 60-minute period; 2. A 50- to 60-minute faculty-supervised laboratory, shop training, or internship in a60-minute period; or 3. Sixty minutes of preparation in a correspondence course.(See USDE Federal Student Aid Handbook, 2018-19, Volume 2 School Eligibility, page 2-38) How are clock hours counted? “A school is not permitted to count more than one clock hour per 60-minute period;in other words, a school may not schedule several hours of instruction withoutbreaks and then count clock hours in 50-minute increments. For instance, a schoolcould not consider seven consecutive hours of instruction to be 8.4 hours by dividing50 minutes into 420 minutes. Seven 60-minute periods of instruction may not countfor more than seven clock hours.”(See USDE Federal Student Aid Handbook, 2018-19, Volume 2 School Eligibility, page 2-38) Does a clock hour also include student’s studies and test preparation athome? NO, although it may be required by the school. (An exception applies to credithour programs). Can a clock hour include externship at a site not on school’s campus? Yes.

What is a credit hour? An amount of work that reasonablyapproximates not less than: 1. One hour of classroom or direct faculty instruction and a minimum of twohours of out-of-class work each week for approximately 15 weeks for onesemester hour of credit, or 10 to 12 weeks for one quarter hour of credit; or 2. At least an equivalent amount of work as required in paragraph (1) of thisdefinition for other academic activities as established by the institutionincluding laboratory work, internships, practica, studio work, and otheracademic work leading to the award of credit hours.(See USDE Federal Student Aid Handbook, 2018-19, Volume 2 School Eligibility, page 2-38) Title IV credit hours are not always accreditor or state credit hours The credits approved by states and accrediting agencies are not necessarilythe credits that will be approved if the program becomes eligible for Title IVaid. For Title IV purposes, the number of credits in the program will be thosedetermined by the clock-hour to credit-hour conversion formula (if required),but they will never be more than those approved by a state or accreditingagency. This is determined for each course within a program.

Clock-to-Credit Hour Conversion: Does not apply to a clock hour program Does not apply a credit hour program if the program is at least two academic years inlength and provides an associate degree, a bachelor’s degree, a professional degree,or an equivalent degree as determined by the Department Does not apply to credit hour program that is non-degree as long as each coursewithin the program is acceptable for full credit toward a single associate degree,bachelor’s degree, professional degree provided by that institution, or equivalentdegree as determined by the Department, provided that 1) the school’s degreerequires at least two academic years of study; and 2) the school demonstrates thatstudents enroll in, and graduate from, the degree program. A school offering a degree program with no graduates does not meet the standard. Each course of the non-degreed program must be accepted in the degreed program.Therefore, as an example, if the non-degreed program offers a single course of study such as“basic English refresher” and the degreed program has no such course of study, the standardhas not been met for the exemption of clock-to-credit. Further, although all courses need toqualify for the transfer, your Institute may limit it to a majority of the courses for each studentwhich potentially requires a student to repeat a course(s). I recommend that if you have an exempt non-degreed program that is transferable to yourdegreed program, your consumer information clearly provides for that. Although transfers to and from other schools does not exempt the non-degreed program,individual students transferring from another school who are given credit for courses at theother school will not cause the exemption of the program to be at risk.

Clock-to-credit, a brief history: In 1989 DE regulations were amended to provide that an Institute was required touse clock hours to measure a program if the State requires the program to bemeasured in clock hours. In 1993, regulations were adopted requiring certain institutions that offer anundergraduate vocational program in credit hours to use a specific clock-to-credithour formula to determine if that program meets the SFA program eligibility criteriaand to determine the total number of credit hours in that program, for SFA programpurposes. This change was made in response to past program abuses, and wasintended to prevent a school from artificially inflating a program's length byconverting from clock hours to credit hours. Undergraduate associate, bachelor's, orprofessional programs of at least two years are exempt from these requirements. Aprogram is also exempt if each course within the program is fully acceptable forcredit toward one of those degree programs at the school. The Department wassued for this change in the regulations. In 1995, the court case was ruled favorably for the Department that provided for aconversion formula for clock-to-credit program measurement for SFA funds. Theformula provided that in order to determine a semester credit hour, the number ofclock hours would need to be divided by 30 (30 clock hours 1 semester credithour). In order to determine quarter credit hours, the number of clock hours wouldbe divided by 20 (20 clock hours 1 quarter credit hour).

Clock-to-credit, a brief history (continued): As a result of the last Reauthorization of Title IV, the formula in calculatingequivalent credit hours for the 2011-12 award year changed so that thefactors became 37.5 for semester credit hours (37.5 clock hours 1 semestercredit hour) and 25 for quarter credit hours (25 clock hours 1 quarter credithour). The number of clock hours that can be considered in the above calculation was alsochanged in 2011-12 to include, within limits, “out of class student work” which will bediscussed later. This does not apply to a strictly clock hour program. Another change occurring in 2011-12 provided that although a program at an Institutemay be considered credit hour by an accreditor, for SFA purposes it must be consideredclock hour if completing certain number of clock hours is a requirement for graduates toapply for licensure or the authorization to practice the occupation that the student isintending to pursue within the State(s) that the program is offered and approved. Hidden (not intentional) in the cash management regulations that becameeffective July 1, 2016, the above requirement that a program must bemeasured by clock hours due to State licensing of graduates was eliminated.

Clock to Credit Hour current principles: If the State in which your program is located requires a specific number ofclock hours be completed in order for your graduates to be eligible to applyfor and pass a certification test for a profession, your school is no longerrequired to measure that program in clock hours if accreditor has approved itfor credit hour. However, If a State requires that a program that prepares students for arecognized occupation be composed of a minimum number of clock hours oftraining and a school offers a GE program that prepares a student for thatoccupation, the number of hours in the program cannot exceed the Stateminimum by more than 50%. For example, if Alaska requires studentspreparing for a career in air conditioning repair complete 1,000 hours oftraining, the Department will not approve Title IV participation for any GEprogram (clock hour or credit hour) in air conditioning and refrigeration repairthat is composed of more than 1,500 hours. Further, if the school’s credithour program includes “out of class hours,” those additional hours arecounted in the 150% limit. ADDED LATER BY PRESENTER: Clock-to-credit rules apply to proprietary (forprofit) schools as well as non-profit schools.

Clock to Credit Hour current principles (continued): The effect of the clock-to-credit conversion is to limit the SFA credit hours inawarding Title IV aid. The converted credit hours cannot exceed the hours grantedby the Accreditor or State. The clock-to-credit conversion is not only performed for each and every courseoffered in a program but it is also applied to each Title IV payment period. This canbe illustrated in the following example:Your school offers a two-semester, one academic year program which provides for the clockhours for each of the 6 courses ofPP1 Course 101PP1 Course 102PP1 Course 103PP2 Course 201PP2 Course 202PP2 Course 203Total150 clock hours 150 clock hours 100 clock hours 200 clock hours 150 clock hours 150 clock hours 900 clock hours4 semester credit hours (150/37.5)4 semester credit hours (150/37.5)2.5 semester credit hours (100/37.5)5 semester credit hours (200/37.5)4 semester credit hours (150/37.5)4 semester credit hours (150/37.5)It would initially be expected that the total credit hours would be 24 which would provide for amaximum full time Pell Grant. That is NOT the case. Due to required rounding, the total creditsare 23.5 with the result that payment period 1 (PP1) would provide for a ¾ time Pell andpayment period 2 (PP2) would provide for a full time Pell. Rounding - your school must have a written policy in determining how rounding willbe determined, as in the above example. As a general rule, your rounding mustfollow the policy of your accreditor or State. We have found that most accreditorsrequire that rounding be done downward to the closed whole or half number. Aswith the above, 100 clock hours yields 2.67 which when rounded down is 2.5.

Clock to Credit Hour current principles (continued): In the above example, the Department will likely reflect 24 semester credithours on the ECAR because they will not perform a per-course calculation foreach of your payment periods; this is due in part to the flexibility of studentsat many schools to schedule their classes. Therefore, the credit hours on theECAR are not always correct and the Department acknowledges this. If the credit hours granted by your accreditor for individual courses is lessthan SFA credits, the accreditor credit hours must be used for SFA awarding. The clock hours that may be counted in computing the clock-to-credit MIGHTINCLUDE “out of class student work.” This outside work includes homework,test prep, projects, etc. Other principles relating to outside work include: The school’s designated accrediting agency or recognized state agency for the approvalof public postsecondary vocational programs has not identified any deficiencies with theschool’s policies and procedures for determining the credit hours that the school awardsfor programs and courses. In other words, they have not taken exception to the hoursreported to them including the outside hours. Accrediting agencies will not approveoutside hours, they will only notify the school if they disagree with the hours. A goodexample of when this might occur is when a significant number of hours are associatedwith externship.

Clock to Credit Hour current principles (continued): The number of outside hours for purposes of the SFA clock-to-credit calculation is limited tono more than 25% of the in-school hours. As an example, if a single course has 80 clock hoursin school, and 30 hours outside classroom hours, only 20 of the outside hours can be counted(80 x 25%) for a total of 100 hours. Excess outside work in a single course cannot be carried over and counted in another course. Outside work is reported on the school’s accreditor’s reporting form which includes the inschool hours. I recommend that annually you document outside work by surveying a sample of yourstudents in related programs of study; have the students sign and date the surveys and listthe number of hours. The outside classroom work is not an “automatic” allowance. ADDED LATER BY PRESENTER: For schools offering programs that includecourses taught in modules, the determination of equivalent credits within apayment period is critical. What is a modular form of offering courses?Discuss. Note that this does not apply to a strictly clock hour program. Examples of clock hour and credit hour ECARS follow.

equivalent credit hours for the 2011-12 award year changed so that the factors became 37.5 for semester credit hours (37.5 clock hours 1 semester credit hour) and 25 for quarter credit hours (25 clock hours 1 quarter credit hour). The number of clock hours that can be considered in the above calculation was also