Competency-based education is a sometimes-controversial model that has gained ground in recent months.

Advocates say competency-based ed puts the focus on students’ capabilities rather than how many hours per week they spend in the classroom. The benefit for employers, they say, is that prospective employees can be judged more easily, based on their demonstrated competencies rather than guessing how their grades will translate to real-world work. By one estimate, at least 200 institutions have competency-based education programs.

But the U.S. Department of Education has been slow to process the applications of colleges and universities seeking approval to receive federal financial aid for their competency-based programs. In September, an audit by the department’s Office of Inspector General found that the department was not adequately addressing the risks posed by competency-based programs, increasing the likelihood that schools would create programs that didn’t meet criteria to receive Title IV federal financial aid.

One risk, according to the auditor, was that colleges and universities would create programs that were just correspondence courses, without any meaningful interaction between students and faculty. Another risk was that students might receive Title IV federal funding for their life experience, without using the school’s learning resources.

As the Education Department sorts out its process and criteria for approving more competency-based programs, here are seven institutions with programs that bear watching:

The University of Michigan

The University of Michigan announced late in October that its accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools, had approved the school’s first competency-based degree program: a master's of health professions. The distance learning program is aimed at working professionals in medicine, nursing, dentistry, pharmacy, and social work. Michigan started offering the degree last year, and it is seeking U.S. Department of Education approval to be eligible to receive federal financial aid.

The program doesn’t have traditional campus-based classes — its students interact with mentors by phone, email, video chat, or, for students and mentors near each other, in person. Upon enrollment, a competency assessment panel assigns the students credit for their existing competencies, and the students have to earn a total of 32 to 39 credit equivalencies (i.e., competencies) to earn the degree. They also have to pass a “summative assessment” based on their learning portfolio.

The University of Wisconsin System

The Flexible Option program at University of Wisconsin System offers five competency-based online certificates and degrees, targeting adult students with college credits but no degrees. The university system is also developing new competency-based degrees in professional studies, which is a bachelor’s degree, and geographic information systems — a master’s degree. Wisconsin won approval from the Education Department and an accreditor for its self-paced, direct assessment arts and sciences associate’s degree. The university system is also seeking Department of Education approval for federal financial aid for other online credentials programs that don’t follow the credit-hour education model.

Purdue University

Purdue University held a competition to encourage the creation of competency-based programs, awarding $500,000 to its Polytechnic Institute in September for developing a bachelor’s degree program where students receive credit based on learned and demonstrated competencies. The program is “transdisciplinary” — open to students in any discipline — with a theme-based organization and learning driven by problem-solving instead of how much time is spent in the classroom. The program started with 36 students this fall.

Western Governors University

A low-priced online school with competency-based degree programs and more than 50,000 students, Western Governors University has state-based versions of its program in Indiana, Texas, Washington, Missouri, and Tennessee. Western charges a flat-rate tuition for every six months of enrollment, and students’ advancement is based on what they can prove they know. Because students are paying for the time it takes to prove their competence, the university says the model provides an incentive to work faster to complete their degree and save money.

Southern New Hampshire University

Southern New Hampshire University’s competency-based, self-paced adult learning branch is called College for America. The 2-year-old program has partnered with 55 employers to create programs for job-specific skills. College for America claims to be the only program of its kind to be approved by a regional accrediting agency and by the Department of Education for Title IV federal financial aid, although the Education Department says there is one other.

Capella University

An online, competency-based school accredited by the Higher Learning Commission and seven professional accreditors, Capella University has more than 500 alliance agreements with other colleges and universities. Among them: 250 community colleges, as well as professional groups and businesses, including 19 Fortune 100 companies. The university allows students to receive credit for knowledge already gained through their experience with a “prior learning assessment.” As of Jan. 23, Capella and Southern New Hampshire had the only two programs approved by the Department of Education to receive Title IV financial aid, according to the department.

Northern Arizona University

Northern Arizona University offers a competency-based online learning program, called Personalized Learning, that allows students to use their previous experience to pass pretests and opt out of certain lessons. The program offers bachelor’s degrees in computer information technology, liberal arts, and small business administration, and it is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools.