US-FAA14 CFR 141.65
Privileges
Read the official ruleOfficial FAA regulation text (public domain)
A pilot school that holds examining authority may recommend a person who graduated from its course for the appropriate pilot, flight instructor, or ground instructor certificate or rating without taking the FAA knowledge test or practical test in accordance with the provisions of this subpart.
Verbatim text of a US Federal Aviation Regulation (public domain), reproduced for reference — not legal advice and not for navigation. A plain-English explainer may be added later; always rely on the current official rule linked above.