Tag: Earnings

ED Panel Signs Off on New Earnings Test

The revamped proposal could cut failing programs off from federal student aid entirely.

Photo illustration by Justin Morrison/Inside Higher Ed | skodonnell/E+/Getty Images | tarras79/iStock/Getty Images

After a week of talks and a final compromise from the Education Department, an advisory committee on Friday signed off on regulations that would require all postsecondary programs to pass a single earnings test.

The new accountability metric, set to take effect in July, could eventually cut failing programs off from all federal student aid funds—an enhanced penalty that appeared key to the committee reaching consensus Friday. Before the compromise, programs that fail the earnings test would only have lost access to federal student loans. Under the proposal, college programs will have to show that their graduates earn more than a working adult with only a high school diploma.

In the course of negotiations, committee members repeatedly argued that allowing failing programs to receive the Pell Grant didn’t sufficiently protect students or taxpayer funds, and it appeared unlikely that without more significant changes, the committee would reach unanimous agreement.

But now, failing programs will also lose eligibility for the Pell Grant if their institution doesn’t pass a separate test, which measures whether failing programs account for either half of the institution’s students or federal student aid funds. If either condition is met in two consecutive years, the programs will be cut off. The timing of the two tests and consequences mean that it will take at least three years for institutions to lose all access to federal student aid. Individual programs lose access to loans after failing the earnings test in two consecutive years.

Preston Cooper, the committee member representing taxpayers and the public interest, who had opposed the department’s initial proposal, said the agency’s compromise would “protect a lot of students.”

“By some of our calculations here, this would protect around 2 percent of students and close to a billion dollars a year in Pell Grant funds,” he said.

The department unveiled this new penalty late Friday morning after what ED’s lead negotiator Dave Musser called an “extremely productive” closed-door meeting with nearly all of the committee members. The proposed regulations aren’t yet final. The department is required to release them for public comment and review that feedback before issuing a final rule.

Other committee members also praised the compromise as “reasonable’ and “common-sense.” Members representing states and accreditors said the revised earnings test and new penalties would help to ensure institutions offer credentials that boost graduates’ earnings. Some suggested that the accountability framework could better inform discussions between institutions and employers, as it sets clear standards.

“And those standards are going to influence the decisions that [employers] make, and that’s going to be a pretty large educational effort,” said Randy Stamper with the Virginia Community College System, who represented states on the committee. “But at least we have the tool to hang our hat on to make points that low-earning programs are a result of low pay, and I think that will help us.”

How Courses Will Be Measured

The department’s proposal essentially combines two accountability metrics—the Do No Harm standard that Congress passed last summer and the existing gainful-employment rule. Gainful employment only applies to certificate programs and for-profit institutions, whereas Do No Harm covers all programs except certificates.

Tamar Hoffman, the committee member representing legal aid, consumer protection and civil rights groups, was the only person to abstain from voting. (Abstaining doesn’t block consensus.)

“The reason I’m abstaining from this vote is because it was made very clear to me throughout this process that protections for students in certificate programs would be taken away altogether if I blocked consensus, and those students are just too important for me to take that risk, especially with the long history of abuse in certificate programs,” Hoffman said.

About 6 percent of all programs would fail the combined earnings test, including about 29 percent of undergraduate certificates, according to department data. Roughly 650,000 students were enrolled in a failing program as of the 2024–25 academic year, half of whom attend a for-profit institution.

“Proprietary institutions are eager to be able to demonstrate where we have programs that are of great value and have good outcomes,” said Jeff Arthur, the committee member representing the for-profit higher education sector. “We’re looking forward to having that opportunity to have a level comparison for the first time across several metrics with all other programs.”

Education Under Secretary Nicholas Kent praised the committee’s work in his closing remarks, saying they made history by adopting a standard accountability metric that will ensure the taxpayer investment in higher education is working for everyone.

“For years, we have been bogged down in ineffective measures that simply failed to capture the full picture of how all programs were actually performing,” he said. “This new framework is different. It’s about ensuring that all programs meet a baseline for financial value, a baseline that reflects the needs of students and taxpayers alike.”

What’s Next for OBBBA Regulations

Friday’s meeting ends two rounds of negotiations at the Education Department to implement Congress’s One Big Beautiful Bill Act. In November, a different advisory committee reached consensus on regulations related to repayment plans, graduate student loan caps and what’s become a controversial plan to designate 11 degree programs as eligible for a higher borrowing limit. Then, in December, this advisory committee approved rules to expand the Pell Grant to short-term workforce training programs.

The department still has to take public comments and finalize those rules before July 1. Kent said the regulations for the student loan provisions should be published later this month.

Several outside policy experts doubted whether the department could get through the necessary negotiations and reach consensus on all the topics—a point that Kent addressed as he called out some of the media coverage surrounding the talks.

“And yet, here we are today,” he said. “Together, we have built something that will stand the test of time and end the regulatory whiplash. Once again, those who bet against us were wrong. They continue to severely underestimate this administration and this committee.”

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January 9, 2026
ED Panel Divided Over New Earnings Test Rules

With just one more meeting to go, the Department of Education and an advisory committee tasked with ironing out the details of how to hold college programs accountable appear far from reaching consensus.

The 13-member panel, comprised largely of state officials, think tank researchers and higher ed lawyers, spent the last four days negotiating the rules of a new college earnings test called Do No Harm—which applies to all degree programs—as well as changes to the existing gainful-employment rule, an accountability metric that only applies to certificate programs and for-profits.

The department’s proposal, which aligns the two accountability metrics and holds all programs to the Do No Harm’s standards, has gone largely unchanged in the first four days of negotiation.

Under Do No Harm, all college programs, except undergraduate certificates, that fail to prove their students earn more than someone with only a high school diploma could lose access to federal loans, whereas the current version of gainful employment requires programs to show their graduates pass the earnings test and can reasonably pay off their debt. Programs that fail either test are cut off from all federal student aid.

Although officials have agreed to a series of smaller changes and said they were open to considering larger ones, none made so far address the key issues that are dividing the committee—axing the debt-to-earnings ratio and the Pell Grant penalty.

If the committee doesn’t reach consensus, the department is free to propose any changes to the regulation it wants, which could include scrapping gainful employment entirely. The department met with different committee members in private meetings Thursday, but it’s unclear if those talks will lead to compromises or flip votes.

“Consensus seems pretty unlikely at this point, since negotiators are still disagreeing on key provisions of the department’s drafted text,” said Emily Rounds, an education policy adviser at Third Way, a left-of-center think tank. “Anything is possible, and these caucuses could be productive, but I would be surprised if they reached consensus.”

Institutional representatives on the committee generally back the overall plan, while consumer protection advocates have taken issue with the department’s changes to gainful employment.

Reaching consensus at this point would likely require ED to significantly rework its original proposal.

“We have moved well into the vote-tallying stage,” one committee member said on the condition of anonymity to maintain good faith in the negotiation process. “The question is, does ED think it can get certain negotiators on board without caving on their original proposal to integrate gainful employment and Do No Harm.”

Department officials acknowledged the differences of opinion but said they would work to bring committee members together.

“The department is going to work on some language overnight based on the things that we’ve talked about today in our various caucuses,” Dave Musser, ED’s negotiator, said at the end of Thursday’s meeting. “We plan to come back in the morning prepared to share some of that language, recognizing that it may not be enough alone to get us to consensus. However, we want to show that we are doing everything that we can to get to a place where everyone can get to an agreement.”

2 Key Issues, 2 Key Sides

The Education Department and institutional representatives said the proposal plan creates a level playing field, calling it a more fair and simple means of accountability. State higher education officials and employers also joined in at times, agreeing that this plan would be the most legally sound and could end years of political ping-pong over higher ed accountability.

But committee members representing taxpayers and legal aid organizations as well as left-leaning research groups and consumer protection advocates argue that the department’s plan waters down existing standards, could put students at risk and may lead to legal challenges.

Although negotiators representing students who receive Title IV aid and students who are veterans have also expressed concerns about the changes to gainful employment, Tamar Hoffman, the committee member representing legal aid organizations, was the most outspoken throughout the week, saying there were “inherent issues” with the department’s current proposal.

“It does not make sense that we would allow the most economically disadvantaged students to use up very precious resources that they have in their lifetime Pell eligibility on programs that the department has deemed to be inadequate to receive loans,” she said at the close of Thursday’s meeting.

Ideally, Hoffman and others would like to see the debt-to-earnings test reinstated as well, though Pell appears to be the top priority.

Preston Cooper, the committee member representing taxpayers and the public interest, voiced more opposition at the beginning of the week as he highlighted his analysis of department data that showed ED’s plan would disburse an estimated $1.2 billion in Pell dollars annually to programs that failed the earnings test.

By Thursday, however, multiple of Cooper’s smaller concerns had been addressed through amendments, and he appeared poised to support the department’s proposal. The changes included added clarity about the ability to separate gainful employment and Do No Harm if courts strike down either test and that failed programs must pass the earnings test for at least two years before regaining loan eligibility.

Some Changes Made

Despite their overall support for the department’s plan, institutional advocates—particularly Jeff Arthur, the negotiator representing for-profit institutions, and Aaron Lacey, who represented nonprofit institutions—did try to change parts of the earnings test that they argued were unfair, like the age and work experience of high school graduates that college students were compared to, or the way rural institutions were held to the same standard as urban ones. So far, they haven’t been successful.

They had better success with an amendment that allowed existing students in failing programs to maintain the loan access needed to complete their degree. The department agreed to the change under a few conditions: The program will have to voluntarily agree to shut itself down after the first year of failure, terminate all enrollment for new students and enter a formal teach-out plan for those who remain.

Hoffman, however, said the change would only further water down existing accountability standards.

“To me, this seems like a giant loophole for institutions to try to maintain eligibility for Title IV funds when they aren’t actually delivering adequate services to students,” she said. “There isn’t anything here that prevents institutions from ceasing new enrollment in a failing program [while] at the same time standing up a [new] substantially similar program within the same institution.” (Title IV of the Higher Education Act authorizes federal financial aid programs such as the Pell Grant.)

The regulations do include some restrictions on starting new programs, but Hoffman and other student advocates from think tanks don’t believe they are strong enough to prevent institutions from developing other similarly poor-performing certificates and degrees.

By the end of Thursday’s meeting, the department had not yet publicly proposed any concessions to address Hoffman’s concerns on the teach-out plan or the core changes to gainful employment.

But talks appeared to continue after the meeting ended. One department official told Hoffman he’d be amenable to talking over happy hour about what changes would be needed to get her on board.

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January 9, 2026
How Colleges Should Respond to FAFSA’s Lower Earnings Warning
On December 7, 2025, the U.S. Education Department announced a new initiative aimed at helping students make informed choices in higher education and maximize their potential for success. Starting now, students applying for federal financial aid may receive a FAFSA “lower earnings” warning for certain colleges and universities that fall below state or national salary benchmarks for high school graduates. Access to this crucial data point is designed to help students evaluate the return on their educational investment.

What Is the FAFSA Lower Earnings Warning?

The FAFSA “lower earnings” warning identifies colleges where median earnings four years after graduation fall below those of typical high school graduates, helping students assess potential ROI.

According to department data, nearly one-fourth of all higher-education institutions (1,365 colleges) currently fall into the “lower earnings” category. These new FAFSA warnings will overwhelmingly impact for-profit (88%) and non-degree granting (80%) institutions, so the short-term impact on traditional higher education is limited for now.

But the broader signal is unmistakable: federal policy and public expectations are moving squarely toward transparency, outcomes, and return on investment (ROI). Even if your institution is not directly affected, the cultural and regulatory shift redefines what students and families expect, and how institutions must communicate and deliver value.

How should you respond?

1. Invest in a Data-Driven Strategy for Student Success

This shift continues to validate the trend in national scrutiny on the value of higher education, calling for a continued emphasis on transparency about outcomes. A truly effective student success strategy requires comprehensive data that tracks the entire learner journey and post-graduation impact measured against internal and external benchmarks.

In a recent Carnegie blog, we shared a list of essential data elements to include when leveling up your data infrastructure for student success. In alignment with these metrics, institutions should prioritize a focused set of value-driven metrics:
- Undergraduate and program-level earnings
- Job placement and program alignment metrics
- Experiential learning access (e.g., internships, co-ops, research opportunities)
- Affordability and equity indicators (including net price, unmet need, and gaps in outcomes)
This kind of outcome-focused dataset is essential for real institutional improvement. It should be actively used to inform strategic functions across the college (e.g., curriculum development, early career engagement, academic advising, student employment, and leadership opportunities).

Without clear, outcome-focused and post-graduation earnings data, institutions lack the necessary insights to genuinely improve student success and cannot articulate their value or ROI to students, families, or the public with any confidence.

2. Proactively Articulate Your Value Proposition

Although this report shows that most college graduates do out-earn high-school graduates, that reality is no longer assumed by the public. Institutions must actively and clearly demonstrate the full short-term and long-term benefits their degrees provide.

If economic mobility and social responsibility are promises we make to prospective students and families, these promises should be measured and communicated as a means to re-recruiting your students throughout their journey. The task for four-year colleges is to effectively articulate their long-term ROI and full value proposition, which includes:
- Career Earnings and Economic Mobility: Explicitly linking their degrees to higher lifetime earning potential.
- Skills and Competencies: Highlighting the critical thinking, communication, and adaptability skills that drive long-term career success.
- Personal, Social, and Civic Outcomes: Highlighting the less-visible benefits of a holistic education, including confidence, belonging, wellbeing, leadership development, and community engagement.
In this newest Federal Student Aid report, the key data point under question is undergraduate earnings four years after graduation as reported on the College Scorecard (with adjustment for inflation). Reviewing your institution’s standing against state, national, and even comparison institutions’ benchmarks is an important starting point, but the real question is broader: Are you clearly communicating the full spectrum of outcomes your graduates achieve—not only economically, but in terms of skills, well-being, and long-term direction?

3. Implement a Holistic Plan for Student Success

As you gather data and more fully articulate your value proposition, it becomes essential to activate a corresponding plan and structure that supports student success. Many institutions may have retention efforts in place, but may lack a strategy that extends from matriculation to graduation and beyond.

Ongoing Process for Continuous Improvement: Student demographics and workforce needs constantly change, so the success strategy can’t be static.
- Holistic Definition of Student Success: Moving beyond simple retention or graduation rates to a more complete picture of student well-being and post-graduation readiness is essential. This expanded definition must include metrics that drive action. For example, if improving salaries at graduation is a priority, what experiences must be in place in year one, and how will you measure progress?
- Structure + Ownership: Establish a clear, accountable framework for your institutional student success strategy. This structure should ideally include designation of accountability for student success within a cabinet-level position, but should also include a thoughtful integration of key offices with responsibilities for essential student success metrics.
- Collaboration Across Essential Areas: True student success requires breaking down institutional silos. A cross-functional committee with delegated authority can provide an important opportunity for connection between what happens in the classroom (curricular) with everything else (co-curricular).
- Annual Action Plan: Commit to regular, institutional-level reviews (e.g., annually) of all success metrics to determine which initiatives should be scaled, revised, or retired. Key to the plan will be the use of leading indicators such as early academic performance, engagement, and experiential learning access to guide mid-course adjustments.
- Ongoing Process for Continuous Improvement: Student demographics and workforce needs constantly change, so the success strategy can’t be static.
Student Success Solutions We Offer

Carnegie collaborates with higher education institutions nationwide to enhance their student success and ROI strategies through a strong focus on data-driven decision-making. Our support is designed to produce measurable outcomes, with a core mission: to help you deliver on the promises you make to every student you serve.

Our Services Include:
- Student Success Assessment: Identifies structural gaps, opportunities, and strategic priorities across your advising, data systems, curriculum alignment, and career pathways.
- Career Ecosystem Blueprint: Provides decision-makers with a robust understanding of their current career outcomes, career services operations, including strengths, opportunities, and challenges, and builds a shared vision for embedded career engagement and employer relations as a critical function for institutional health.
- Strategy Session (1 Hour): A working session with Carnegie’s Student Success team to help leadership teams rapidly assess where they stand — and what steps to take next..
If you haven’t considered it yet, we invite you to the Carnegie Conference in January. This is a perfect opportunity for leaders who are ready to delve deeper into how their institution can create and execute a student success strategy centered on return on investment. Participants will have the chance to share best practices with colleagues and walk away with tangible, actionable solutions for immediate implementation.

Partner With Us

As national scrutiny of higher education continues to increase, articulating the long-term value of your degrees and prioritizing student success will enable you to demonstrate relevance, lead, and grow in this current environment. Carnegie is dedicated to helping your institution move forward.
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December 19, 2025
ED Designates 23% of Colleges “Lower Earnings”

First-time undergraduates applying for federal student aid will now receive a warning if they indicate interest in an institution where graduates don’t earn more than an adult with a high school diploma.

The new earnings indicator on the Free Application for Federal Student Aid is aimed at ensuring students have more information about their postsecondary options, Education Department officials said in a news release Monday. Consumer protection advocates generally praised the department’s move, while institutional groups criticized it.

About 23 percent of the nearly 5,900 institutions in the department’s database will be labeled as “lower earnings.” Those colleges enroll fewer than 3 percent of undergraduates and receive about $2 billion in federal student aid annually. That’s a fraction of the more than $100 billion in federal aid that’s doled out each year. The department pulled from publicly available data to generate the label, and program-level data is available online on the College Scorecard.

This warning comes after years of debates over how to give students more information about the outcomes at institutions and specific programs. An Obama-era effort was scuttled after higher ed groups and institutions pushed back. However, a new rule drafted by the Biden administration will eventually provide more program-level data on earnings, which consumer protection advocates say will help to steer students away from those that don’t pay off.

“This new indicator will help students and families better understand how their choices could translate into real-world outcomes, and it will be provided at a crucial moment in the college decision-making process,” Education Under Secretary Nicholas Kent wrote in a blog post. “This indicator is designed to inform—not limit—student choices. It’s one additional resource students can use—alongside factors like cost, mission, location, and personal interests—to identify the path that best aligns with their goals.”

Most of the 1,365 institutions flagged for lower earnings are for-profits and beauty schools. A few on the list are community colleges and historically Black colleges and universities.

The association that represents cosmetology schools didn’t respond to a request for comment Monday. However, the group has fought efforts to tie financial aid eligibility to students’ earnings, arguing in part that the underlying data is inaccurate.

The left-leaning think tank New America released a report critical of the industry earlier this year, calling it “predatory.” Meanwhile, Michelle Dimino, director of the education program at Third Way, a left-of-center think tank, expects the lower-earnings list to add to the scrutiny on beauty schools.

“Well over half [on the list] were [beauty schools and cosmetology institutes],” Dimino said. “That continues to really raise the temperature around that industry and some of the questions about return on investment and supply and demand in that space, how they might think about licensing and other requirements to be able to appropriately calibrate their costs with their outputs.”

Institutional representatives said Monday afternoon that while they support greater transparency, they are concerned about the department’s methods to create the designation, such as which students are included in the calculations and how the earnings metric doesn’t take into account regional variations and differences in earnings for specific fields.

“This is a blunt tool for a nuanced process that has enormous potential for creating misleading outcomes,” said Jon Fansmith, senior vice president for government relations and national engagement at the American Council on Education. “Much more care, time and attention should have gone into it, and it would be all the better for it if ED had done that. Regardless of their motivations, there are good reasons to question the process and how useful it will actually be. “

Fansmith added that if the department is flagging low performers, it should also highlight high performers.

In the release, Kent’s blog post and other online information about the earnings flag, the department made clear that it’s not taking a “position on the underlying value of educational services provided by any institution of higher education.”

Jordan Wicker, senior vice president of legislative and regulatory affairs at Career Education Colleges and Universities, which represents the for-profit sector, said in a statement that he appreciates that the earnings indicator applies to all institutions.

“CECU believes disclosures like this can be improved by including non-completer earnings data, which the College Scorecard currently lacks,” he said. “Similarly, CECU is consistent in its critique of the dataset for the comparison group age 25-34, as well as accounting for regional variations in earnings. We share the Department’s commitment to transparency and will work with them to ensure that the most accurate disclosures are provided to help students select the school that best fits their needs and wishes.”

First-year undergraduates will see the label on their FAFSA Submission Summary. From there, they can click to receive more detailed earnings information on the institutions they selected. Students can then opt to remove a flagged institution.

Even students who have already submitted their FAFSA can see whether any of their chosen schools have been flagged. In his blog post, Kent said the notices have “no impact on FAFSA completion, submission, or eligibility for aid.”

Starting next July, all college programs will have to show their graduates make more than the average adult with only a high school diploma in order to access federal student aid. The department is still working through the specifics of how that test, known as Do No Harm, will work.

To Dimino of Third Way, the launch of the indicator is a sign of growing momentum toward greater transparency and more information about earnings.

Dimino particularly likes the department’s decision to tell students about the earnings data after they complete the FAFSA. She thinks disclosure at that step will help ensure students actually see the information and can use it as they consider their options. She is interested in learning more about how students act on the data and whether they decide against sending the lower-earnings institutions their aid application.

Students lack awareness about available earnings data or where to find it, according to Inside Higher Ed’s 2025 Student Voice survey, conducted in August. About 11 percent of students said they don’t know where to find postgraduation outcomes information and an additional 8 percent said they “know nothing” about postgraduation outcomes. Just 12 percent said they knew detailed outcome data for their program.

Michael Itzkowitz, founder of higher education research and policy firm HEA Group, said the earnings indicator is “a step in the right direction for transparency.”

“Students today primarily attend college to secure better employment opportunities, and they deserve to know up front whether an institution simply isn’t delivering on that promise,” he said. “Most institutions deliver on the promise of economic prosperity but, unfortunately, some do not.”

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December 9, 2025
How Talks Over New Earnings Test Could Ensnare Gainful Employment

Starting next July, colleges and universities’ access to federal student loans will hinge on how much their graduates make after Congress’s new earnings test, known as the Do No Harm standard, takes effect.

This monumental shift in how the federal government holds degree programs accountable is one that’s years in the making. But when Congress passed the law, one key type of degree program was left out—undergraduate certificates.

Lawmakers from both parties have long said holding colleges accountable for cost is critical in order to drive down borrower-default rates and protect students from paying high tuition without a guaranteed return on investment. Yet, the very students and programs Republicans left out of the earnings test are expected to face the worst return on investment, studies show.

Under the so-called Do No Harm test, a program would lose access to federal loans if its average graduate doesn’t earn more than someone with a high school diploma for two out of three consecutive years. And while students enrolled in undergraduate certificate programs only make up about 10 percent of all those receiving federal aid, they account for about half of those who attend programs projected to fail the earnings test, according to research from American University’s Postsecondary Education & Economics Research Center.

For now, a different rule, known as gainful employment, holds certificate programs with a poor return on investment accountable using a similar earnings test and a metric related to a student’s debt. But unlike Do No Harm, the Biden-era gainful-employment rule only applies to certificate programs and for-profit colleges.

According to the Federal Register rule-making notice, the Department of Education and an advisory committee are set to both iron out the details of Do No Harm and rehash the gainful-employment rule during a months-long process known as negotiated rule making. But while the process begins Monday, the initial meeting agenda doesn’t include any discussion about either issue. Instead, the first week of rule making will focus specifically on regulations that expand the Pell Grant to short-term job training programs, and then the committee will break for the holidays.

In the meantime, education experts are left to wonder what the fate of accountability for certificate programs will be—and tensions remain. For-profit institutions remain critical of gainful employment, calling it an uneven playing field. Colleges and universities of all types worry that both metrics are holding them accountable for factors outside of their control. And student and taxpayer advocates stress that it’s important to ensure federal dollars are being put toward programs that pay off.

But when conversations about the accountability measures do kick off, policy experts from all sides agree that the regulations regarding gainful employment, which are not as restricted by the new law, will be the most contentious topic of debate.

“The thing that will take up a lot of oxygen in the room is gainful employment,” said Clare McCann, a former Education Department official who is now the PEER Center’s managing director of policy and operations. “Republicans have come a long way in believing accountability is important. So the desire to settle accountability issues as much as possible, for once and for all, runs pretty deep.”

A Perennial Political Football

Since the Obama administration first established a gainful-employment rule in 2010, Republicans and Democrats have fought over how to hold career education programs accountable.

The first Trump administration made rescinding the Obama-era rule a priority, and then the Biden administration put a stronger iteration in place. This back-and-forth raised speculation that the second Trump administration would once again roll back gainful employment.

However, officials have sent some mixed signals. The administration has pursued deregulation while also opting to defend the Biden rule in court. (A federal judge upheld it earlier this fall.) Further, the Trump administration’s push for greater federal involvement in higher education runs counter to many of its actions in the first term. The Education Department has yet to release its plans for the accountability provisions, fueling uncertainty about the fate of gainful employment.

Key Republican lawmakers, including Sen. Bill Cassidy, chair of the education committee, have said undergraduate certificates were only exempted from the new Do No Harm standard because of the gainful-employment rule. (The senator’s response implies that holding certificates accountable under both standards would be duplicative.)

As it currently stands, gainful employment requires certificate programs at any institution and degree programs at for-profit colleges to pass two tests. The first is similar to the Do No Harm earnings test. The second one, known as the debt-to-earnings ratio, gauges whether the average student earns enough to reasonably pay off their loans. Programs that fail either test are at risk of losing access to all federal student aid, including both loans and the need-based Pell Grant.

About 1.4 million students annually use federal aid to attend undergraduate certificate programs, and without gainful employment, advocates worry they are at risk of enrolling in programs that fail to provide a positive return on investment.

New data from the Century Foundation, a left-leaning think tank, showed that while two out of every three programs projected to fail the gainful-employment tests would also fail Do No Harm, about 400 programs could squeeze by, passing the new earnings test while failing the gainful-employment debt-to-earnings ratio. Those programs represent about $528 million in annual Pell Grant disbursements.

“Someone who wanted to take a lot of Pell money by setting up a bad program … could set up a program, which may not require students to take out loans but still is not worth their time or that Pell Grant money,” said Peter Granville, a Century Foundation fellow and author of the report. “That’s a crack which we’re concerned bad actors could go in and use to game the system.”

Advocates like Granville urge the department to not touch gainful employment. Meanwhile, most institutional representatives Inside Higher Ed spoke with said they’d like to see more clarity in the policy proposals about how the Do No Harm test will work and are advocating for at least some changes to make gainful employment more fair. During public comment, the trade association Career Education Colleges and Universities, which represents for-profits, called on ED to “take the opportunity to fully rescind” the gainful-employment rule.

But one institutional representative who will serve as a member of the negotiating committee said that while institutions may want to see changes made to the gainful-employment rule, it seems highly unlikely that it will be fully rescinded the way it was during Trump’s first term.

“Whether it’s the department or negotiators, I think anyone coming in and trying to say, ‘There should just be nothing that applies to nondegree programs,’ seems pretty inconsistent with the language coming out of Congress,” the representative said, speaking on the condition of anonymity to protect his good faith in negotiations. “It also just seems like it would be a really challenging position to defend.”

Some Potential Changes

So if the department doesn’t try to roll gainful employment back entirely, could they change the regulations in other ways? Experts, advocates and institutions have several ideas if they do.

Advocates for for-profit institutions have argued for years that all programs should be subject to the gainful-employment rule. But one policy expert, who asked to speak anonymously since the department has yet to release its proposals, said that stripping gainful employment down to the bare bones to directly mirror the Do No Harm test seems unlikely.

“Congress left out undergraduate certs, and that’s the only fair reading of the law. So … presumably you can’t do the exact same thing as the Do No Harm measure for undergraduate certs,” the source said.

Instead, the expert hopes that the department will do what it can to better level the playing field while maintaining accountability for certificate programs. One way of doing that, the source suggested, is to lower the ages of adults with high school diplomas that are used in comparison and extend the time before earnings are measured.

Currently under gainful employment, the earnings premium test compares the income of certificate and degree holders three years after graduation to adults ages 25 to 34. That means a 21-year-old with a certificate in phlebotomy could be compared to a 34-year-old flight attendant.

The Do No Harm test is expected to use data for the same age group and compare it to students four years after they graduate, but since the gainful-employment rule has other stipulations like the debt-to-earnings ratio and the higher penalty of losing Pell Grants, the expert said they would “like to see a better, more reasonable comparison group.”

Other potential changes on the table could include eliminating the debt-to-earnings test but keeping the Pell-eligibility penalty for both certificate and for-profit programs or opting to maintain gainful employment for certificate programs while for-profit programs would only be subjected to the Do No Harm test. But, for each policy expert that proposed one of these ideas, another suggested that it could lead to legal challenges.

In general, policy experts said, until the issue papers are published, it will be difficult to predict what the Trump administration plans to do.

Preston Cooper, a senior fellow at the American Enterprise Institute, a right-leaning think tank, will be serving on the negotiating committee. He said he understands the argument that it’s not fair to hold for-profit institutions to a higher standard, but he wants to ensure “the strongest accountability that we can possibly get.”

“As the taxpayer representative, I certainly find it compelling … because if we have weaker accountability, then we’re losing more money on Pell Grants and student loans,” he said. “But ultimately, it will come down to what they decide to propose in the issue papers.”

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December 5, 2025
Examining the Debt and Earnings of “Professional” Programs (Robert Kelchen)

Negotiated rulemaking, in which the federal government convenes representatives of affected parties before implementing major policy changes, is one of the wonkier topics in higher education. (I cannot recommend enough Rebecca Natow’s book on the topic.) Negotiated rulemaking has been in the news quite a bit lately as the Department of Education works to implement changes to federal student loan borrowing limits passed in this summer’s budget reconciliation law.

Since 2006, students attending graduate and professional programs have been able to borrow up to the cost of attendance. But the reconciliation law limited graduate programs to $100,000 and professional programs to $200,000, setting off negotiations on which programs counted as “professional” (and thus received higher loan limits). The Department of Education started with ten programs and the list eventually went to eleven with the addition of clinical psychology.

In this short post, I take a look at the debt and earnings of these programs that meet ED’s definition of “professional,” along with a few other programs that could be considered professional but were not.

Data and Methods

I used program-level College Scorecard data, focusing on debt data from 2019 and five-year earnings data from 2020. (These are the most recent data points available, as the Scorecard has not been meaningfully updated during the second Trump administration. Five-year earnings get students in health fields beyond medical residencies. I pulled all doctoral/first professional fields from the data by four-digit Classification of Instructional Programs codes, as well as master’s degrees in theology to meet the listed criteria.

Nine of the eleven programs had enough graduates with debt and earnings to report data; osteopathic medicine and podiatry did not. There were five other fields of study with at least 14 programs reporting data: education, educational administration, rehabilitation, nursing, and business administration. All of these clearly prepare people for employment in a profession, but are not currently recognized as “professional.”

Key takeaways

Below is a summary table of debt and earnings for professional programs, including the number of programs above the $100,000 (graduate) and $200,000 (professional) thresholds. Dentistry, pharmacy, and medicine have a sizable share of programs above the $100,000 threshold, while law (the largest field) has only four of 195 programs over $200,000. Theology is the only one of the nine “professional” programs with sufficient data that has higher five-year earnings than debt, suggesting that students in other programs may have a hard time accessing the private market to fill the gap between $200,000 and the full cost of attendance.

On the other hand, four of the five programs not included as “professional” have higher earnings than debt, with nursing and educational administration being the only programs with sufficient data that had debt levels below 60% of earnings. More than one-third of rehabilitation programs had debt over the new $100,000 cap, while few programs in other fields had that high of a debt level. (Education looks pretty good now, doesn’t it?)

I expect the debate over what counts as “professional” to end up in courts and to possibly make its way into a future budget reconciliation bill (about the only way Congress passes legislation at this point). Until then, I will be hoping for newer and more granular data about affected programs.

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November 11, 2025
Explore the earnings for graduates of beauty schools, other certificate programs

Schools that train hairstylists, dental assistants and health aides will be able to keep getting federal student loan dollars even if the professionals they turn out don’t end up earning any more than a high school graduate.

That’s because programs like those, which don’t end in a college degree, were granted an exemption from new accountability measures under President Donald Trump’s ”big, beautiful bill.”

A Hechinger Report analysis of federal data found at least 1,280 such certificate programs could have been at risk of their students losing access to federal student loans — but a successful lobbying effort excluded them from the accountability measures.

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Under the new law, most graduates of associate, bachelor’s and graduate degree programs must earn at least as much as someone who has only a high school diploma. If programs fail to hit that benchmark for two out of three years, their students will no longer be eligible for federal student loans. (And the schools must warn students of this possibility if they miss the mark for just one year). Without that borrowing power, many students could not afford to attend. And without those students, some of the schools might not survive.

Using the table below, see which certificate programs might have been flagged under the Trump law if not for the exemption. If graduates of a particular program ended up earning less than adults with only a high school diploma, that program could have faced losing eligibility for federal student loans under the Trump law.

Methodology

What exactly does the “big, beautiful bill” call for?

The legislation requires the Department of Education to compare earnings of working adults who have only a high school diploma to the earnings of adults four years after they complete a degree program or graduate certificate. If a postsecondary program’s graduates fail to outearn adults with only high school degrees for two out of three years, students can no longer obtain federal student loans to attend that program.

The law also sets up an appeals process and a way for programs to apply to regain eligibility for federal student loans.

What data was analyzed?

The law directs the education secretary to use census data to calculate median earnings for working adults with only a high school degree in the state where a program is located. The Department of Education will release regulations that spell out exactly how to do that math. For example, the law does not spell out whether it will look at census data averaged out over 12 months or a longer period of time.

For earnings data for high school graduates, The Hechinger Report relied on calculations from the Department of Education, which were derived from the 2022 American Community Survey 5-Year Estimates Public Use Microdata Sample from the U.S. Census Bureau.

To calculate median earnings for graduates, the law directs the Education Department to put together earnings data for a cohort of at least 30 graduates who received federal student aid for postsecondary education — which typically includes grants, loans or work-study. Graduates are excluded if they’re currently enrolled in another higher education program. If there are fewer than 30 students in a cohort, the Education Department can lump together several years of data to get to 30 students.

To get earnings data for graduates of certificate programs, Hechinger used a federal database known as College Scorecard. We downloaded field of study data for the 2022-23 school year. From this data, The Hechinger Report extracted information about certificate programs, at their main campuses, and included only programs that had median earnings data. The federal database suppresses earnings data for small programs. That left 4,431 currently operating certificate programs.

How was a program determined to be at possible risk of failing the accountability measure?

For each program, The Hechinger Report compared median graduate earnings to the high school graduate earnings data of the state where the program was located. If the graduates earned less, the program was considered to be at risk.

Under the law, postsecondary programs that don’t meet the earnings benchmark for one year have to inform all current students that they are at risk of losing their eligibility for federal student loans.

Are there any limitations to the data?

The “big, beautiful bill” takes online programs into account by considering whether students live in the same state where their academic program is based. Under the law, student earnings are compared with national data rather than state data when fewer than half of enrolled students live in the state where the school is located, which may be the case for online programs.

The Hechinger Report’s analysis instead compares every program with state earnings. That’s because the College Scorecard field of study data set is limited and only includes information about graduates employed within the same state as the institution, not whether enrolled students live in the same state as the program. In addition, College Scorecard data provides earnings data for all graduates without a breakdown for whether they receive federal aid.

Also, the Hechinger database looks at the available median earnings of all students four years after graduation for the school year 2022-23, regardless of the number of graduates. Though College Scorecard suppresses data on smaller programs, median earnings data is available for programs with 16 or more working graduates. The “big, beautiful bill” directs the Department of Education to instead lump together years of data to create cohorts of at least 30 students.

Contact investigative reporter Marina Villeneuve at 212-678-3430 or [email protected] or on Signal at mvilleneuve.78

This story about beauty schools was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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September 26, 2025
Johns Hopkins Taps Endowment Earnings for Research Funding

Johns Hopkins University is turning to earnings on its $13.2 billion endowment to preserve research and protect researchers, trainees and staff amid drastic cuts to federal funding, The Baltimore Banner reported Monday.

Since President Donald Trump started his second term in January, federal agencies have terminated or stalled billions in research grants to colleges and universities in a move scientists and higher education advocates warn will decimate university budgets, slow scientific innovation and hurt local economies. Johns Hopkins estimates that it has so far lost 100 federal grants, while others remain under review by the Trump administration to ensure they align with the federal goal of rooting out diversity, equity and inclusion, among other things. As a result, the university said it’s approaching $1 billion in federal funding losses so far this year.

While Trump and his allies have suggested universities can use their endowments to fund research, officials at Johns Hopkins—which received more funding from the National Institutes of Health in 2024 than any other university—said Monday that’s not so easy.

“It’s a common misconception that universities can simply ‘use the endowment’ in moments like this,” university officials said in a statement. “The reality is that most of our endowment is made up of legally restricted funds designated by donors for specific purposes. The principal of the endowment must legally be preserved in perpetuity—to support Johns Hopkins’ mission now and for future generations—and cannot be drawn down like a reserve fund.

“That said, we are using flexible resources—some of which are tied to endowment earnings—to help sustain critical research in this moment of uncertainty.”

Johns Hopkins hasn’t disclosed how much total earnings it plans to take from its endowment to help faculty and students continue their research, according to a news release.

But in the plan released Monday, it said individuals will receive up to $100,000 for delayed grants or $150,000 for terminated grants during a 12-month period. The university will also offer a year of support to Ph.D. students completing their dissertations and postdoctoral fellows who had been expecting support from federal grants that were terminated, as well as expand a program that offers editorial support for grant proposals and journal articles and another that enables undergraduates to work with faculty mentors on original research or projects.

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April 30, 2025
Dual Enrollment’s Long-Term Effects on Student Earnings
Title: Do Dual Enrollment Students Realize Better Long-Run Earnings? Variations in Financial Outcomes Among Key Student Groups

Authors: Navi Dhaliwal, Sayeeda Jamilah, McKenna Griffin, Dillon Lu, David Mahan, Trey Miller, and Holly Kosiewicz

Source: The Research Institute at Dallas College and University of Texas at Dallas

Dual enrollment partnerships between school districts and colleges and universities provide an opportunity for high school students to enroll in college courses, often saving them time and money. However, the long-term impacts of dual enrollment have not been studied in depth, and the existing body of research offers mixed results. A recent working paper reveals many dual enrollment students experience long-term economic benefits, although outcomes vary based on race and socioeconomic status.

In the study, students from the 2011 graduating class across 22 Texas school districts were tracked and examined, contrasting the outcomes of students that participated in dual enrollment against those that did not. Ultimately, by the sixth year after graduation, dual credit students were earning more than their peers. Students earned 4 to 9 percent more annually between year six and year 12.

Additional highlights from the working paper include:
- Many dual enrollment participants benefited from higher earnings than non-participants in years six through twelve after high school graduation, but not all student subgroups saw significant benefits.
- African American, Hispanic, and limited English proficient students experienced smaller increases in long-term earnings outcomes.
- Economically disadvantaged and African American students that enrolled in dual credit programs also reported higher levels of student loan debt compared to non-participants. For example, there was an $831 to $855 increase in student debt from year three to four for economically disadvantaged dual credit students, and a $1,231 to $1055 increase in student debt from years one to four for African American dual credit participants.
To read the full report, click here.

—Austin Freeman

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April 28, 2025