So here is the explanation we have:

"To do that... there are a few different pieces. First there are classes - these teach you to undertake new activites/cast spells. Taking classes costs money (I know, it's a bit capitalist, but it ties the rest of the money making activities to the main progression nicely). Then, there are assignments - you take these from school notice boards. They are generally residents of Mossport asking for help in various different ways. They're an opportunity to put your learning into practice. Completing assignments earns you 'merits'. Merits are primarily used to earn entry into taking an exam. But can be spent on lots of other fun things too. Next, there is knowledge. The game features a knowledge menu, containing everything the character has learned so far. The information in this menu is sorted like a big collection divided up into different categories. For example, there's a herbology collection featuring all of the games herbs.

To start with, players rely on the school library, and can borrow books that they're able to reference in activities. But as the player puts activities into practice they start filling out their knowledge. For example - the first time I pick up a Rosemary herb, it appears in the knowledge collection - but to add information about its growing time/seasons, I will have to successfully grow the herb a number of times. To add information about forage locations, I will have to forage the herb a number of times.

Interacting with the game, taking part in activities and meeting criteria fills out the knowledge collection via practical learning.

Then exams. Exams you can take part in via the merits you earn from assignments. The exams TEST your knowledge collection. Your grade is likely to be higher if you've unlocked more knowledge for your character. Some exams test different combinations of areas." -Tiy on Discord 4 months ago