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Feature Story

A Careful Look at Time

Tick tock.

A careful eye is kept upon the clock.  Many managers are—without desire, yet by circumstance required—on the lookout for those certain employees who like to keep an eye upon the clock; those always ready to bound for the door as soon as the clock’s hands get in right alignment.  But, of course, in the world of financial aid, there is another key aspect of clock watching that is critical to a successfully run financial aid operation. That comes in the sphere of clock-to-credit hour conversions.  This concept has been around for years, being one of several other pivotal aspects of the now famous October 29, 2010 Program Integrity regulations.  But, it has gained a new place of prominence as if the very idea of clock-to-credit hour conversions was to be on display like the legendary Big Ben.  While it is true that the majority of such schools affected by this are in the private, proprietary sector of higher education, it can also be of potential impact to other segments of postsecondary education, e.g., a nursing program offered at a public institution when the State licensing board or school’s accrediting agency requires tracking of the educational progress in clock hours, or a technology program at a community college.  Appropriate knowledge of the details of clock-to-credit hour conversions is critical to hundreds, if not thousands, of postsecondary schools across the country.  While this topic has been around for years, there appears to be confusion about the process that remains.  Let us note some of the key aspects of this required conversion process as we watch the clock.


The clock hour has been a major item of discussion and legal battle for more than two decades.  Final regulations published November 29, 1994 were the subject of ongoing legal proceedings when the 1995-1996 Federal Student Aid Handbook was published.  More recently, provisions of the October 29, 2010 regulations set out to provide a definition of a credit hour.  Such a definition required a look at how programs offered in clock hours could be considered credit hour equivalent.  The result was a new formula for performing a clock-to-credit hour conversion.  Currently, the issue of a definition of a credit hour and the resulting clock-to-credit hour conversion is undergoing the negotiated rulemaking process (Neg Reg) whereby new final regulations eventually will be promulgated.  The financial aid community is hoping for more clarity and efficient functionality in the necessary conversion process as the end result of the Neg Reg process.

Modern Time

Prior to July 1, 2011, the clock-to-credit hour conversion process for determining the number of financial aid credits was illustrated by 30 clock hours of instruction being equivalent to one semester or trimester credit hour.  Similarly, 20 clock hours of instruction represented one quarter credit hour.  Now, however, with the advent of the Program Integrity regulations that became effective on July 1, 2011, the new conversion rates are prescribed to be 37.5 clock hours for each semester or trimester credit and 25 clock hours for each quarter credit hour.  This seems fairly basic on the surface.  But, the regulatory change did allow for schools to determine whether to do a straight conversion.  For example, a school could choose to calculate credit hours from 900 clock hours by dividing by 37.5 to equal credit hours for financial aid purposes.  (To illustrate, if one were to take 900 clock hours and divide by 37.5, the result equals 24 semester credit hours for financial aid purposes.  This 24 semester credits is the required amount to be considered an academic year of semester credits.)  However, in shorter programs, performing a straight conversion would likely have a negative effect upon the length of an otherwise Title IV-eligible program for financial aid purposes.  Thus, as an alternative, schools were authorized in the regulation to do a conversion from clock hours to credit hours that considered “allowable” outside of class work.

Stretching Time

A reality for many schools is that they have found that the provision of the regulation that allows the use of classroom or instructional hours at an amount equal to the older rate (pre-Program Integrity regulations), plus the additional amount of allowable outside of class work enables the schools’ courses and programs to meet the requirements of Title IV eligibility in regard to the credit hour definition.  (Note that the ability to utilize a lower number of classroom/instructional hours is a possibility unless the school’s accrediting agency or recognized State agency has found deficiencies in the method that the school uses in assigning credit hours for programs or courses.)  The use of the outside of classroom hours helps extend the program length in many cases so that the program will be, or remain, Title IV eligible without adding additional in class hours to meet the 37.5 clock hours per semester/trimester hour or 25 clock hours per quarter hour.  Yet, confusion has continued regarding the issue.

On the Mark, Course by Course

A key to ensuring acceptance of the school’s clock-to-credit hour conversion is to make certain that a basic premise has not been overlooked.  When doing the clock-to-credit hour conversion to determine a program’s initial or continued eligibility based upon the regulations, it is imperative that the school ensures it is doing the calculations on a course by course basis.  That is, a school may not take a program’s total hours and divide by 37.5 (or 25 in a quarter hour program) to determine if the program meets the required length for Title IV program eligibility.  To establish if the program meets the required length, it must do the clock-to-credit hour conversion course by course.  Then, the results of each course’s conversion calculation are added together to ascertain the program’s length, and thus its potential for ED approving the program for Title IV eligibility.  Should the result of a school’s clock-to-credit hour conversion result in a different number of credits than what ED has already approved, the school will need to update its Electronic Should the result of a school’s clock-to-credit hour conversion result in a different number of credits than what ED has already approved, the school will need to update its Electronic Application for Approval to Participate in the Federal Student Financial Aid Programs (E-App) so that it receives an updated Eligibility and Certification Approval Report (ECAR).  (It is important to note that the requirement to perform the clock-to-credit hour conversion is only applicable to non-degree programs that do not fully transfer into a degree program at the same school.)

The process of performing the calculations for the conversion is rather systematic when one knows the steps.  So, here we will go step-by-step in doing a course’s clock hour to credit hour conversion.

From Clock Hours to Semester Credit Hours:

  1. Take each course’s instructional hours1 and divide them by 30.  (This comes from the old 30:1 conversion rate for a Semester credit hour prior to the regulation change.)
  2. Then multiply the result from the above calculation under the old conversion formula by 7.5 to determine how much outside of class work2 may actually be counted in the new conversion formula.  This is called the maximum allowable hours of outside work.

NOTE:  If you do not require the maximum allowable 7.5 hours of outside of class work, then you cannot use that maximum.  That is, if you do not require at least 7.5 hours of outside of class work for every 30 instructional hours, you must use the lower number of actual out of class hours your school requires.  See the Example #2 at the end of this list of steps in the clock-to-credit hour conversion process.

  1. Add the classroom instructional hours together with the maximum allowable hours calculated per course for outside of class work (not to exceed the maximum allowable) to determine the maximum total hours per course (instructional hours and out of class work).
  2. Divide the maximum total hours per course (instructional hours and maximum allowable hours of outside work) by the new clock-to-credit hour conversion rate of 37.5 (clock hours per Semester credit hour) to determine the course’s new equivalent Financial Aid Credits (FA Credits) by course.
  3. NOTE:  The calculated result will likely have a decimal point as a result of the calculation. The result must be rounded down to the nearest .75, .50, .25 or .0, depending upon the accrediting agency’s policy.
    1. You may retain the decimal point calculated, if allowed by the accrediting agency’s policy, or you may round down to the next lower whole credit number.
    2. In most cases it is probably to the school’s benefit to retain the calculated decimal number as it may assist in reaching the required number for an academic year discussed below.
  4. Follow the above steps for each of the courses in the program.  You will find that when you add all of the individual courses’ newly calculated FA Credits together, you will have the program’s total FA credits, which of course must be 24 Semester FA Credits to equal an academic year as defined in regulation.  And, regulation does not allow you to round the total up.  Again, the accrediting agency’s policy must be followed for rounding, e.g., round down to nearest 0.5 or 0.0, etc., per course and for the total.
  5. The amount of calculated FA Credits in a program may not exceed the number of credits approved by the State or accrediting agency.

From Clock Hours to Quarter Credit Hours:

For Quarter credit hour scenarios, simply replace the numbers in the above listed steps with those applicable to Quarter credit hour conversions.  That is, use 20 instead of 30, 5 instead of 7.5, and 25 instead of 37.5.  And, the required number of Quarter credits to equal an academic year is 36 Quarter FA Credits.

The Watched Clock

While it is true that most employers prefer to have employees who are not intently watching the clock to determine how soon they can clock out for the day, it is another story when it comes to the clock to credit hour conversions.  Every school required to perform clock to credit hour conversions will want, and strongly encourage, employees to watch the clock, so to speak, for the purposes of performing correct clock to credit hour conversions.  These simple functions required for accurate determination of a program’s Title IV eligibility have a significant impact on a school’s ability to provide necessary assistance to students.  In at least this one scenario, every employer (school) to whom these requirements apply will want employees to be precise in watching the clock.  They will need to take a careful look at time.



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