Three out of four college students today have at least one “non-traditional” characteristic. They didn’t enroll in college immediately after high school. They’re working adults and aren’t living with mom and dad. In fact, a quarter are parents themselves.

Yet our higher education systems are built for an 18-year-old attending full-time. This is especially true of our financial aid system. It assumes a linear progression—not the less predictable cadence that is more common with students juggling many competing demands on their time and resources. And it is particularly ill-suited to new models, such as direct assessment programs, that aim to measure learning rather than seat time.

Design Aid for New Models

When Capella University began designing its direct assessment bachelor’s and master’s degree programs, it was immediately clear that the university was going to have to map them onto existing, largely antiquated funding rules in order to get federal financial aid dollars to students. This presented a significant challenge—and it remains an awkward fit today. Across the field of higher education, the sheer magnitude of that process has reduced the number and type of institutions with the capacity to offer direct assessment programs.

It also creates confusion for students. Capella’s programs, for example, operate on an “all you can learn” 12-week subscription model, but financial aid is still required to be tied to the credit hour. The rate at which students progress and financial aid disbursement timing do not always align, making it hard for students to know when they’ll be receiving aid.

The U.S. Department of Education is considering recommendations—made through a negotiated rulemaking process—to change this. The proposed changes would create a framework that bases student eligibility on a form of academic progression that more accurately reflects the educational courses of part-time students. In our experience, this change would greatly reduce students’ confusion around financial aid and ensure students have access to their funds when they need them.

Allow for Hybrid Approaches

Students also need aid policies that allow them to mix-and-match their approaches to education, designing the pathways that best work for them. Currently, students must commit to a traditional credit-hour program or one offered entirely through direct assessment. Federal aid rules make it impossible for them to enroll primarily in a direct assessment program, but take select courses—perhaps in subjects in which they have struggled in the past, or at times when they need a more predictable educational workload—through a more traditional credit-hour program.

Allowing for such a hybrid model would vastly expand the pool of students for whom direct assessment would be beneficial. A growing body of evidence demonstrates that 100 percent of direct assessment programs, on average, speed up the time to complete a degree, reducing costs and borrowing, while maintaining quality. For example, students in Capella’s direct assessment bachelor’s programs earned a degree 59 percent faster than those in Capella’s equivalent bachelor’s programs tied to the credit hour. But only a handful of institutions currently offer direct assessment programs.

If we could use hybrid models to extend even a fraction of the benefit of the direct assessment approach to more students, we could see significant gains in progress to a degree across higher education.

Keep Student Protections Front and Center

No doubt, many of the existing financial aid structures were designed to ensure the responsible use of federal dollars—and more importantly, to protect students. Aid is tied to the credit hour, in large part, to ensure that students are receiving value for their money. But unfortunately, this standard measures inputs—time in class, substantive faculty interaction—rather than learning. Policymakers, researchers, and institutional leaders must continue pushing for the development of a currency outside the credit hour to measure learning, whether that is a “competency unit” or another metric.

Until that time, the credit hour should remain in place. It has a long history as the backbone of financial aid funding, and remains the best existing protection for students. But with concentrated effort to develop a viable alternative, we could ensure its days are numbered.

Ultimately, if we want to serve today’s students better, we must build a financial aid system that recognizes that they need to learn and pay for higher education in ways that don’t conform to existing structures. Learners are eager for new, more promising pathways to degrees—and ultimately rewarding careers—and we need an aid system that is able to meet them on those new paths.