This study focuses on the Competency Based Education (CBE) movement in a small Ohio school district, asking whether it represents radical change or reenforces status-quo social stratification. CBE was a product of the recent public demand for more educational accountability. It is a radical shift from traditional U.S. education insofar as it represents a move toward "sponsored mobility," the European model which uses testing as a screening device to determine which students should advance to the next educational level. Under the CBE system, regular testing determines which students need reinforcement or remediation in order to pass minimum educational standards. In Ohio, proficiency exams are taken for four different secondary diplomas. Surveys show both support and criticism for CBE by teachers and researchers. The theoretical framework of Talcott Parsons' sociological functionalism is contrasted with conflict theory. Funtionalism suggests that the system contains basically fair standards for educational advancement, and that CBE should equalize the U.S. educational system, reducing social class discrepancies. Conflict theory, by contrast, suggests that CBE would perpetuate social stratification. The document asks whether students who succeed under CBE come from higher socioeconomic backgrounds, and whether students who need remediation usually come from lower socioeconomic backgrounds. The paper offers an extensive examination of the literature, but draws no conclusions. The two theories will be discussed in an ensuing study, and nine hypotheses that will be tested for that study are listed. (TES)