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(1) To examine language performance in the context of cognitive abilities in young children who are deaf or hard-of-hearing and (2) to identify factors associated with having a language underperformance, defined as a gap between the language standard score and the nonverbal IQ (NVIQ) standard score.Children 6 to 82 months of age with bilateral hearing loss were enrolled. Language performance was defined as a ratio of language skills relative to cognitive abilities with language underperformance defined as a ratio of language scores to NVIQ <0.85.Among 149 children, approximately half had hearing loss that was clinically classified as mild or moderate, and over one-third received a cochlear implant. Participants had a mean NVIQ in the average range (95.4 [20.3]). Receptive language scores were significantly lower than their NVIQ by 10.6 points (p < .0001). Among children with NVIQs 80 to 100, 62.5% had receptive scores <85 and 50% had a language underperformance (ratio <0.85). Among children with NIVQs >100, 21.1% had receptive scores <85 with 42% having a language underperformance. Children with language underperformance (n = 61, 41.5%) were more likely to have more severe levels of hearing loss, lower socioeconomic status, and be nonwhite.Many children early identified with hearing loss continue to demonstrate language underperformance, defined using their cognitive potential. Language deficits have a cascading effect on social functioning in children who are deaf or hard-of-hearing. This study highlights the need to understand a child's cognitive potential to adequately address language needs in existing intervention models.