Proficiency testing, the measurement of what a person can do as a result of learning, is used increasingly in higher education to determine whether students have mastered basic skills or whether they deserve credits for specific courses (which they may not have actually taken). The motivation for proficiency testing stems from general dissatisfaction with the low caliber of skills attained by many graduates, and the cost effectiveness of using challenge examinations to avoid re-teaching already mastered skills. Proficiency testing at the secondary level may reduce the need for remedial instruction at the college level, provided that the cutting scores are meaningful. The implications of proficency testing at the college level are numerous. Extensive remedial programs may have to be instituted, or poorly prepared students may no longer enroll, leading to a decrease in revenue. However, this trend may be offset by other students who are encouraged by the availability of credit by examination programs. The nature of the entering class may change drastically. The faculty will face changes also, since some will have to provide remedial instruction or gear their teaching toward proficiency. A serious problem may be the disproportionate number of minority students who may be unable to pass these tests, regardless of the reasons for the failure. (EVH)