See 46 CFR 11.201(j)(1)(i). But, very few if any schools giving courses that substitute for a Coast Guard exam are allowed to give oral exams. It’s case by case, and specific approval is needed each time. The person giving the exam has to meet certain additional qualifications (oral examination is a specialized skill) that most of the normal instructors won’t meet. In almost 10 years directly involved with approved courses, I saw approval for exams given two or three times.
That happened before I started working for the Coast Guard in 1997. Neither the original parent school or the satellite school that became independent are still in business.