On April 20, 2026, the U.S. Department of Education published a proposed rule in the Federal Register that would cut federal student loan access — and in some cases Pell Grants — for college programs whose graduates earn too little. Undergraduate programs would need to show graduates earn more than typical high school graduates in the same state. Graduate programs face a similar bar against bachelor's degree holders. The first calculations under the new rule would be released July 1, 2027, and the earliest any program could lose eligibility is July 1, 2028. Public comments are due May 20.

The federal government is proposing the most direct earnings-based test for college programs in U.S. higher education history.

What the Proposed Rule Does

The Department of Education's Notice of Proposed Rulemaking (NPRM), published April 20, 2026, establishes a postsecondary education accountability framework tied directly to graduate earnings.1

Here's the basic test:

  • Undergraduate programs: The typical graduate must earn more than a typical adult with only a high school diploma in that state. Programs that fail this test would lose eligibility for federal Direct Loans.
  • Graduate programs: The typical graduate must earn more than a typical adult with a bachelor's degree. Programs that fail lose federal loan access.
  • Persistent failures: Programs that routinely fail — defined as failing in 2 of 3 consecutive measurement years — would also lose access to Pell Grants in some cases.

The rule applies to all institutions regardless of whether they are public, private nonprofit, or for-profit. It covers undergraduate and graduate programs at more than 4,000 colleges and universities.2

The Timeline for Students

Because the rule requires a multi-year measurement process before any program loses eligibility, the immediate impact on currently enrolled students is limited. The Department's own timeline:

  1. April 20, 2026: NPRM published. Public comment period opens.
  2. May 20, 2026: Comment period closes.
  3. July 1, 2027: First earnings premium calculations published under the new rule.
  4. July 1, 2028 (earliest): A program could first lose Direct Loan eligibility — only if it fails the earnings test in at least 2 of 3 consecutive years.

Students currently enrolled in a program, or planning to enroll for fall 2026, are not at risk of having federal aid pulled mid-program under this timeline. The more relevant question is: what does this rule signal about the programs on your list?

The earnings accountability framework is specifically designed to flag programs with structurally low return on investment — not programs in a temporary economic downturn. The highest-risk programs tend to be in fields where degree completion rates are low, median salaries are modest, and student debt loads are high relative to earnings. Use the college degree ROI by major data to see how your intended program compares before enrollment.

What's Actually Being Measured

The rule would compare graduates' earnings against a regional benchmark — not a national average — which is important. A salary that looks low nationally might be competitive in a lower-cost state. The Department's use of state-level high school graduate earnings as the baseline for undergraduate programs reflects that.

This is similar in concept to the FAFSA earnings indicator the Department already deploys — the yellow warning flag that appears when a school's graduates earn below state-level high school benchmarks.3 The proposed rule would move beyond a flag to an actual eligibility consequence.

For a full breakdown of which majors and programs tend to produce the strongest earnings outcomes, see highest-paying college majors and highest-paying majors data.

Who Should Care Now

Prospective students choosing a major: This rule, if finalized, creates a public database of which programs meet the earnings bar. That database will be worth checking when it launches in 2027. In the meantime, the underlying question — does this degree typically lead to earnings above what I'd make without it? — is worth asking now.

Students in low-earning fields: The rule doesn't affect students already enrolled when any program loses eligibility. But it's a signal about how the federal government views certain programs' value. A program that fails the earnings test would not be able to offer federal loans to new enrollees — which would reduce enrollment, reduce tuition revenue, and put long-term program viability at risk.

Students considering graduate school: Graduate programs face a steeper bar (earnings above bachelor's degree holders). That's a meaningful threshold for many humanities, social work, and education graduate programs where typical salaries don't significantly exceed bachelor's-degree norms. Use the is college worth it guide as a framework for thinking through this tradeoff.

This is a proposed rule, not final law. The comment period ends May 20. Rulemaking typically takes months after comments close before a final rule is published. For now, no programs have been identified as failing the earnings test, and the measurement methodology will likely be refined during the rulemaking process.

How to Think About This

The question this rule is really asking: Would this person have been better off not going to college?

That's a rough test. It doesn't account for non-financial benefits of education, variation within a program, or the fact that some students use degrees in ways that don't show up in typical earnings data. Critics are expected to raise these objections during the comment period.

What the rule does usefully expose: there are programs at accredited institutions where the average graduate earns less than the average person who stopped at high school. That's worth knowing — whether or not federal aid policy should be the mechanism for changing it.

For context on how federal vs. private student loans work and why federal loan access matters so much to program enrollment, that guide covers the basics. If your program lost federal loan eligibility, you'd be looking at private financing for tuition — which typically means higher interest rates and no income-driven repayment options.

Footnotes

  1. U.S. Department of Education. (2026, April 20). Accountability in Higher Education and Access Through Demand-Driven Workforce Pell: Student Tuition and Transparency System (STATS) and Earnings Accountability. Federal Register, 2026-07666. https://www.federalregister.gov/documents/2026/04/20/2026-07666/accountability-in-higher-education-and-access-through-demand-driven-workforce-pell-student-tuition ↩

  2. U.S. Department of Education. (2026, April). U.S. Department of Education Issues Proposed Rule to Hold Colleges and Universities Accountable for Low Earning Outcomes. https://www.ed.gov/about/news/press-release/us-department-of-education-issues-proposed-rule-hold-colleges-and-universities-accountable-low-earning-outcomes ↩

  3. CollegeHelpGuide Staff. (2026, April 9). FAFSA Now Flags Low-Earning Colleges. CollegeHelpGuide.com. https://www.collegehelpguide.com/blog/fafsa-earnings-flag-low-earning-colleges-2026/ ↩