Competency-based education is increasingly popular because of the flexibility it provides for students seeking a postsecondary credential. Current federal student aid, however, is geared toward supporting students in traditional, time-based degree programs. This paper discusses why current approaches to federal student aid are not supportive of competency-based degree programs and explores how federal statute and regulations could be changed, in ways that are not reliant on time and credit hours, to disburse aid to students while minimizing fraud.