CPA

150 credit hours CPA: A tale of courses and creative counting

September 23, 2024

6 min read

Freelance Writer

The journey to becoming a Certified Public Accountant (CPA) is challenging, requiring you to pass the CPA exam, gain at least a year of work experience, and earn 150 hours of college credit.

To earn your bachelor’s degree, you typically need 120 credit hours, so why do you need 150 hours of college credit for CPA licensure? How can you fulfill this requirement more easily or reduce the cost of more college hours? We’re sharing some options to meet the existing requirement that work best for you.

Also, we want to share some potential changes on the horizon, as the AICPA and National Association of State Boards of Accountancy (NASBA) are considering a competency-based pathway that could be an alternative to needing 150 college hours to become a CPA.

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Why do CPAs need 150 credit hours?

Before 1988, most states only required an undergraduate degree as a prerequisite for CPA licensure. However, in 1988, the American Institute of Certified Public Accountants (AICPA) recommended that state accounting boards raise that requirement to 150 credit hours. 

For the most part, adding this requirement came from the idea that extra education before licensure would make for more well-rounded CPAs. Today, every state, jurisdiction, and the District of Columbia has adopted the 150-hour rule, but within those hours, there are variations between the state boards of accountancy.

Most states do not mandate these additional credit hours in a specific field of study, though some state boards of accountancy require additional accounting or business-specific classes. For example:

Colorado requires 27 hours of accounting coursework and 20 hours of business administration coursework to sit for the CPA Exam. To meet the state’s 150 credit hour requirement to earn your license, you must have a total of 33 credit hours of accounting and 27 hours of business administration coursework.
Delaware requires 24 hours of accounting coursework to sit for the CPA Exam but doesn’t require additional accounting or business coursework to meet the 150 hour requirement.
Texas requires CPA candidates to have 21 hours of upper-level accounting and 24 credit hours of upper-level business courses, including two hours of accounting or business communication to sit for the exam, but must have 27 hours of upper-level accounting courses to earn their license.

We recommend you check our guide to CPA Exam requirements by state to decode the exact requirements for a CPA license.

How to get 150 credit hours for CPA licensure

There are several ways to earn the credit hours you need to qualify for a CPA license. 

Go to grad school

The most straightforward option is to get a master’s degree, such as an MBA or a Master's of Science in accounting. Just ensure that the additional coursework provides the required accounting and business courses your state requires for licensure. 

Take community college classes

 For budget-conscious candidates, accredited community colleges offer a variety of affordable in-person and online classes. If you have all the required accounting and business credits, you can take the extra classes in any topic. This can be a great way to build skills in areas that support accounting, like IT or communications, or you can simply take classes in topics that interest you, like art history or creative writing.  

Experience, Learn, and Earn (ELE)

The AICPA and NASBA partnered with Tulane University to create the Experience, Learn, and Earn Program, or ELE program. This program was originally only available to participants working directly for participating firms, companies, not-for-profits, and government entities. However, beginning January 1, 2025, registration will open to accounting graduates not associated with the program.

The ELE program is for accountants who are employed full-time and have completed their bachelor's degree and core accounting classes, but still need the full 150 hours for CPA licensure. Program participants earn up to 30 college credit hours through online courses.

CPA Credits

CPA Credits is another organization who provides an easier, self-paced opportunity to earn the extra 30 credit hours you need. With upper-level accounting and business courses accredited through their partner, Upper Iowa University, you'll get the knowledge and credits you need at a rate often more affordable than most colleges, including community colleges.

As part of our exclusive partnership with CPA Credits, students of CPA Credits can also receive Becker's CPA Exam Review course at a discounted rate!

CLEP exams

  College Level Examination Program (CLEP) exams are standardized tests that allow you to receive college credit by passing an exam instead of taking a course. While you may be able to use these exams to meet the 150-hour requirement, you usually can’t use them in place of required accounting and business courses. Also, avoid duplicates of courses you've already completed at your college or university. 

Remember, there's no right or wrong way to earn the additional credits needed to meet the 150-hour education requirement if it meets your state board’s requirements. So, choose courses that will make you a more knowledgeable and well-rounded professional.

Pushback against the 150 credit hours requirement

There is mounting pushback against the 150-hour requirement, especially given the profession’s talent shortage. Critics argue that the 150-hour rule has become a structural barrier that makes attracting skilled talent to the profession difficult.  For example, a recent report from the Center for Audit Quality noted a decline in the number of accounting graduates. The 150-hour rule was among the top five reasons keeping students from majoring in accounting². 

Critics also believe the 150-hour rule is partly to blame for the profession's lack of diversity. Writing for Fortune, Guylaine Saint Juste, president and CEO of the National Association of Black Accountants (NABA), noted that "only 2% of CPAs are Black—and this number has remained stagnant for the past 25 years.²" Saint Juste believes the 150-hour rule is partly to blame for this problem, as requiring an additional year of college often requires Black students to take on more student loan debt to meet the requirement. 

In 2023, the National Association of State Boards of Accountancy (NASBA) reaffirmed its support of the standard by a unanimous vote. At the time, NASBA President and CEO Ken Bishop said in an interview with the Journal of Accountancy that if any state lowered its requirements to 120 hours, CPAs in that state would no longer have mobility and CPA reciprocity privileges.

A possible new path toward licensure

To help make CPA licensure more accessible while protecting the public and maintaining the profession’s standards for knowledge and education, the AICPA and NASBA have put forward an initiative to help CPA candidates meet license requirements³. Called the CPA Competency-Based Experience Pathway, this provides a way for candidates with a bachelor’s degree who have met their state’s accounting and course requirements to demonstrate their professional and technical skills.

“The proposed pathway encompasses the perfect mix of flexibility for CPA candidates while maintaining rigor for public protection,” said NASBA President and CEO Daniel J. Dustin, CPA. “We look forward to the input and direction from the 55 U.S. Boards of Accountancy on this important and necessary framework to strengthen the CPA pipeline.”

What would the competency framework look like?

The competency framework created by the AICPA and NASBA⁵ includes seven professional competencies related to areas in:

Ethical behavior
Communication
Critical thinking and professional skepticism
Collaboration, teamwork, and leadership
Self-management and continuous learning
Business acumen
Technology mindset

There are also three technical competencies in the framework:

Audit & assurance
Tax
Financial reporting

Candidates would need to show competency in all professional areas and at least one of the three technical areas, which would then be verified by a licensed CPA evaluator within their organization.

“Our goal is to ensure that accounting professionals have the necessary experience, knowledge, and competencies to handle the complex nature of CPA work, while also providing paths to licensure that reflect market conditions and make licensure as accessible as possible,” said Susan Coffey, CPA, CGMA, the CEO of Public Accounting for AICPA. “Feedback from the profession is essential to building a workable pathway.” The AICPA and NASBA are asking for public input on the proposed model competency framework and other aspects of the Competency-Based Experience Pathway.