The 30 Credit Conundrum

Discusses the approaches many students are taking to fulfill the 150-hour requirement to become a CPA.

by Elisabeth Felten, CPA Sep 28, 2022, 09:12 AM

pa-cpa-journal-the-30-credit-conundrumWhat do nutrition, astronomy, and physical education have to do with becoming a CPA? These are the types of courses some accounting majors take to earn the requisite 150 credits needed to obtain a CPA license. When the 150-credit-hour rule was established, the expectation was that CPA candidates would pursue a master’s degree after completing the 120 hours required for most undergraduate degrees. Today, however, many are pursuing lower-cost, less-intensive options to complete the credit-hour requirement. 

In 1983, when Florida became the first state to implement the 150-hour requirement, most candidates chose to enroll in graduate courses to acquire the 30 additional hours.1 Studies published in the years following did show improved pass rates and a more skilled workforce. The results make sense, if the 30 hours are master-level accounting courses. Times have changed, however. Factors such as rising tuition prices and the opportunity cost of forgoing work for an additional year of schooling are viewed by some as deterrents to entering the profession. 

Many accounting firms seek to hire only those students who have completed 150 hours upon graduation. Therefore, some CPA candidates are looking to earn these credits any way they can. In Pennsylvania, Professional Standards Code Section 11.57 stipulates the 150 hours must include “at least 24 semester credits of accounting, auditing, business law, finance, or tax subjects” to sit for the exam, and “an additional 12 semester credits in accounting, auditing, and tax subjects” are required to be issued a certificate.2 To meet the requirements beyond the stated 36, students often overload their undergraduate semesters with classes in nonrelated subjects, an option that gives them extra credits with few, if any, added tuition costs. Others may opt to take less expensive, less rigorous nonbusiness courses at local community colleges while at home during school breaks. This approach technically fulfills the credit requirement, but it is a far cry from the intent of the 150-hour rule.  

According to Forbes, more than half of all college students graduate with debt, and that debt averages nearly $29,000 per borrower.3 Many students are looking at the cost and debt associated with an additional 30 credit hours and are deciding the numbers just don’t add up. The research in this area concurs. One study identified “Difficulty in paying for an additional 30 hours of education” as a demotivation for Hispanic students – who are already underrepresented in the profession – to sit for the CPA Exam.4 Another study showed that the 150-credit-hour requirement served as a barrier in general to becoming a CPA candidate without a corresponding increase in candidate quality.5 

Complicating the issue are reports that the number of students entering accounting is dropping. A 2019 report published by the AICPA found accounting enrollments since 2016 had decreased by 4% for undergraduates and 6% for graduates.6 A study completed at James Madison University saw a decline of 34% in enrollments from 2015 to 2019 and found peer institutions experiencing declines as well.7 Students at DeSales University analyzed the undergraduate accounting enrollments of about 50 colleges and universities in Pennsylvania from 2018 through 2022 and found a decrease of more than 15%. While the 150-hour rule does not account for the entire decline, studies consistently show the rule is a factor.  

So, how do we maintain professionalism while meeting the needs of future accounting students?  

Some propose dropping the additional 30 credit hours needed to attain a license, but doing so will affect interstate license mobility. All 50 states have adopted the 150-hour requirement, so if Pennsylvania were to drop the requirement then Pennsylvania-licensed CPAs will not have the privilege to practice in another state without obtaining another license in that state.8 

Options that do not affect mobility would include changes to the composition of the education requirement. South Carolina, for example, requires 36 hours of accounting-specific coursework for licensure, with 24 of those credits required to be upper-level courses (300 or above).9 While the AICPA encourages candidates to pursue graduate-level programs, it also stresses the need to develop skills such as “communication, presentation, and interpersonal relations.”10 If required, these courses could be taken cost-effectively at a local community college or as part of a traditional college curriculum.  

The intent of the 150-hour rule was sound, but the way many are executing it won’t make them better accountants. Given the changes in higher education costs, mounting college debt, and declining accounting enrollments, the 150-credit-hour requirement must evolve to serve our students and our profession.   

1 John Cumming and Larry Rankin, “150 Hours: A Look Back,” Journal of Accountancy (April 1, 1999).  
2 Commonwealth of Pennsylvania, Title 49, Code Section 11.57 Education requirements for CPA certification.  
3 Alicia Hahn and Jordan Tarver, “2022 Student Loan Debt Statistics: Average Student Loan Debt,”
Forbes Advisor (June 9, 2022).  
4 Akinloye Akindayomi, An Examination of the Demotivational Factors Inhibiting Hispanic Students Participation in the CPA Exam, NASBA.  
5 B. Meehan, E. F. Stephenson, Reducing a Barrier to Entry: The 120/150 CPA Licensing Rule, J Labor Res 41, 382–402 (2020). 
6 AICPA, 2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, page 6 (2019).  
7 Alexander L. Gabbin, James H. Irving, and Eileen M. Shifflett, “Accounting Education at a Crossroads,”
CPA Journal (September 2020).  
8 What is Mobility? NASBA. 
9 Education Guidelines, South Carolina Board of Accountancy.  
10 150 Hour Requirement for Obtaining a CPA License, AICPA. 
Elisabeth Felten, CPA, is assistant professor of business for DeSales University in Center Valley, Pa. She can be reached at 
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