Despite increased attention to competency-based education (CBE), research from a state policy perspective remains limited. This is problematic considering state policy can serve as either an incentive or barrier to implementing high-quality CBE. Using a practitioner-based case study design, this study analyzes the South Dakota Board of Technical Education\u27s (SDBOTE) development of three system-wide CBE policies: credit hour equivalency, academic calendar and term structure, and tuition and fee model. For each policy, the authors outline the options considered and describe the decision made. Two of the three authors served as the primary project managers for the SDBOTE\u27s CBE policy development, which provides first-hand knowledge into the considerations and decision-making processes. Across the three policies examined, a consistent tension between supporting educational innovation and working within existing structures is identified. Three themes that emerged from SDBOTE’s approach to managing this tension and their implications for policy development in state higher education systems are explored: evaluating capacity, identifying constraints, making intentional compromises. This study provides one example of how state higher education systems can develop system-wide CBE policies and has implications for state policymakers, state higher education system administrators, and policy researchers that are considering and evaluating CBE implementation
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