To be legally defensible in the US, in particular for high-stakes assessments, and meet the Standards for Educational and Psychological Testing, a cutscore cannot be arbitrarily determined; it must be empirically justified.
Instead, a study is conducted to determine what score best differentiates the classifications of examinees, such as competent vs. incompetent.
Such studies require quite an amount of resources, involving a number of professionals, in particular with psychometric background.
Standard-setting studies are for that reason impractical for regular class room situations, yet in every layer of education, standard setting is performed and multiple methods exist.
Standard-setting studies are typically performed using focus groups of 5-15 subject-matter-experts that represent key stakeholders for the test.