An Earnings Test for Higher Education Risks Diverting Students from Some Meaningful Careers
Sandy Baum and Kristin Blagg
February 11, 2026
Recently, the US Department of Education’s negotiated rulemaking committee reached consensus on a framework for implementing a “do no harm” earnings test for students completing postsecondary programs. This test sets two thresholds for undergraduate programs:
-
If the median earnings of an undergraduate program’s graduates don’t exceed the median state earnings for high school graduates, usually measured four years after completion, the program will lose the ability to provide federal loans.
-
If programs falling below that threshold account for at least half of an institution’s federal aid recipients or half of federal student aid funds, then the institution will lose the ability to provide Pell grants as well as federal loans.
Though it is important to hold postsecondary institutions accountable for students’ earnings, this blanket approach risks discouraging certain career paths with low wages but critical value to society. A more effective way to hold higher education accountable to student outcomes would be policies that rely on earnings and other indicators of program success.
