WASHINGTON, D.C. — Federal officials are proposing sweeping new rules that would cut off student loan eligibility for college programs whose graduates do not earn more than high school graduates.
What This Means for You
- Some college programs could lose access to federal student loans
- Programs must show graduates earn more than comparable education levels
- Public comments will shape the final rule before implementation
The U.S. Department of Education on Friday released a proposed rule aimed at holding colleges and universities accountable for the financial outcomes of their graduates.
Under the proposal, undergraduate programs would lose eligibility for federal student loans if typical graduates earn less than individuals with only a high school diploma. Graduate programs would be required to show earnings above those of a typical bachelor’s degree holder.
Addressing Return on Investment
The proposal targets concerns that some higher education programs leave students with significant debt but limited earning potential.
Federal officials said the rule is intended to ensure that taxpayer-funded aid supports programs that provide measurable economic benefits.
“If postsecondary education programs do not leave graduates better off, taxpayers should not subsidize them,” said Under Secretary of Education Nicholas Kent.
Scope of the Proposed Rule
The rule would apply across all sectors of higher education, including public, private, and nonprofit institutions, and would cover programs ranging from certificates to graduate degrees.
Programs that consistently fail to meet earnings benchmarks could lose access not only to federal student loans but, in some cases, Pell Grants, which provide need-based aid to low-income students.
The proposal is authorized under recent federal legislation and existing regulatory authority governing federal student aid programs.
Development and Consensus
The framework was developed through a negotiated rulemaking process involving a federal advisory group known as the Accountability in Higher Education and Access Through Demand-driven Workforce Pell Committee.
The committee included representatives from higher education institutions, legal aid organizations, businesses, and students, and reached agreement on a unified accountability structure based on earnings outcomes.
Next Steps
The proposed rule is open for public comment through May 20, 2026, via https://www.regulations.gov.
After reviewing feedback, the Department of Education may revise the rule before issuing a final version that would determine how programs qualify for federal financial aid.
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