A philanthropist, one of America’s wealthiest men, was worried about faculty pensions. The solution he successfully pushed, with the largesse of his foundation, led to the creation of the credit hour, which has become higher education’s de facto standard unit of measuring academic work.
Andrew Carnegie never intended for the time-based credit hour to be used to measure student learning, according to a new report  from the New America Foundation and Education Sector, which tracks the standard’s history. But it has become a measure and a proxy for what students are supposedly learning.
An over-reliance on the credit hour, which links the awarding of academic credit to hours of contact between professors and students, has led to many of higher education’s problems, according to the report.
“There is pretty compelling evidence that what we have right now isn’t working,” said Amy Laitinen, deputy director for higher education at the New America Foundation and the report’s author.
One obvious concern is that colleges often reject transfer credits, wasting students’ money and time, in part because they don’t trust what constitutes a credit hour at another institution, according to the report.
The credit hour can also stymie innovation. For example, it is difficult to apply the "seat-time" standard to online classes, which are typically less tied to class time but are an important and rapidly growing element of higher education, the report says. Competency-based education, in which students learn at their own pace, is also a bad fit  with the credit hour. So, too, is prior-learning assessment , where students can earn credit for learning outside of college, like training on the job or in the military.
The Carnegie Foundation for the Advancement of Teaching warned about the inadequacy of the credit hour back in 1906, shortly after the standard was established.
After all, Carnegie’s original motivation had nothing to do with college-level learning, according to the report. He wanted to create a free pension plan for underpaid professors, so they could retire at a reasonable age. In order to opt in, the foundation required colleges to sign on to a time-based standard to address another issue: college admissions requirements. More high school graduates were applying to colleges, and the new “Carnegie Unit” was an easy way to measure how much time high school students spent in each subject.
Colleges followed suit by converting their own course offerings into time-based units, and ignored the foundation’s warnings about the credit hour’s utility. The result is a standard of one credit hour for each hour of faculty-student contact time per week over a 15-week semester, with most bachelor degrees weighing in at 120 credits.
That standard falls short, according to the report, because the credit hour does not measure learning. Grades are supposed to do that, but plenty of research has identified problems with grade inflation. And even if grades did work, Laitinen said the credit hour still wouldn’t allow flexibility for students to learn at different speeds. For example, one student could master college-level calculus in a month in a self-paced class, while another might take a full semester (or longer) to become proficient.
As a result, Laitinen said, the credit hour is at the intersection of three of higher education's thorniest issues: cost, time and academic quality.
The report includes a quote from a 1938 Carnegie Foundation that remains relevant:
“The system of units and credits, which, useful as it was a third of century ago, is not good enough for American education today,” wrote Walter A. Jessup, the foundation’s then president. “Higher education appears to be well on its way to another stage of development in which promotion, at least in college, will be based upon ‘the attainments of minds thoroughly stored and competent.’”
Out of Time?
Blowing up the credit hour won’t be easy, in part because it’s so convenient. And any reforms need to be both thoughtful and deliberate, Laitinen argues in the report. That’s because just opening the floodgates to federal aid without some standard for measuring learning could encourage diploma mills and a wave of unearned credits for cash.
“Abusive interpretation of the credit hour could lead to fraud on a huge scale. But the credit hour is also archaic, a nonsensical basis for regulating online programs in which the whole notion of time in the classroom has no meaning,” according to the report. “Define the credit hour too tightly, and innovation would be stifled. Define it too loosely, and taxpayers would get taken for a ride.”
However, Laitinen, who is a former official at the U.S. Department of Education, said that balance can be achieved with policy fixes for the credit hour. And the key is for the federal government, accreditors and colleges to do a better job of talking to each other about how to get there.
The federal government, by determining whether colleges can participate in federal aid programs, has one of the biggest roles to play.
The Education Department recently attempted to set a consistent, standard definition for the credit hour. That controversial  effort, which drew 1,200 comments, resulted in a vague, confusing definition, at least according to most observers.
A Revised Definition
Colleges may award students a credit for any of the following reasons:
1) Experiencing one hour of class attendance or faculty instruction per week, for 15 weeks, in a course that requires two hours of additional work for every one hour of class attendance and/or instruction.
2) Performing the equivalent amount of work over a different period of time.
3) Demonstrating evidence of achievement, represented in intended learning outcomes, that is equal to an amount of work that is equivalent to experiencing one hour of class attendance or faculty instruction per week, for 15 weeks, etc.
It calls for one academic credit to equal one hour of classroom or direct faculty instruction time and a minimum of two hours of out-of-class work per week, over a 15-week period. A credit hour could also be the “equivalent amount of work over a different amount of time,” according to the definition, which also tosses in learning outcomes and “evidence of student achievement.”
A better approach, Laitinen writes, would be a rewritten definition that preserves the underlying meaning (See box at right). That new standard would allow colleges to “define the scope of courses in terms of evidence of achievement, learning outcomes and student work, instead of time,” the report said.
A 'Fine Line'
Several colleges have experimented with decoupling college credit from “seat time” for decades, according to the report, including Excelsior College, Charter Oak State College, the State University of New York’s Empire State College and Thomas Edison State College. More recently, Western Governors University and Southern New Hampshire University have used competency-based education to challenge the status quo.
But government policy can make or break that innovation, Laitinen writes. And while the report advocates for the Education Department to encourage new approaches, it said the federal government should not be in the business of setting its own standardized outcomes for measuring student learning. Instead, the report proposes three recommendations to move policy forward without being heavy-handed.
First, there is wiggle room within the current framework, according to the report. Western Governors’ much-ballyhooed competency-based education approach gets the job done. And the online, nonprofit college does so without -- despite widespread belief to the contrary -- relying on an exemption  that would allow the university to tie its credits to “direct assessment” of student competencies, rather than a traditional credit-hour calculation.
The Education Department also has in place a program through which colleges can serve as “experimental sites” to test learning-based financial aid policies. With this laboratory-style approach, the report said, colleges could try to award financial aid for credits earned through prior learning or through the demonstration of learning outcomes.
Finally, the report advocates for institutions and the department to give direct assessment a whirl, enabling colleges to drop the credit hour and assess student learning in programs that are eligible for federal financial aid. But the feds should set a high bar, Laitinen said.
“They just have to walk a fine line, but it can be done,” she said, adding that only the “best actors” should be allowed to participate in direct assessment.
Laitinen predicts that at least a few colleges will soon be able to drop the credit hour. One reason, she said is that both presidential candidates have expressed interest in tying credits to student learning.
“There’s a real desire to move away from seat time,” she said.
(NOTE: This article has been changed from an earlier version to correct a reference to Andrew Carnegie's faculty pension plan.)