Competency-based education evaluates students in the context of clearly-stated course competencies.

A competency is a specific, measurable ability or skill that a student must demonstrate to show mastery of a subject, typically focused on practical application rather than simply acquiring knowledge. Competencies serve as learning outcomes that students must achieve at their own pace before advancing to the next level, and learners must achieve either an Exceeds or Proficient level on all course competencies in order to earn a passing final grade.

Learning objectives and outcomes generally describe what students should know or be able to do after completing a course or lesson, often tied to specific content or instructional activities. Competencies, in contrast, are broader, demonstrable abilities that integrate knowledge, skills, and attitudes in authentic contexts, with mastery measured through performance assessment rather than time spent learning.

While learning objectives may be satisfied by completing assignments within a traditional timeframe, competencies require students to demonstrate mastery through application regardless of how long it takes them to achieve that mastery, making competencies central to the flexible pacing and assessment model of competency-based education.