The College Investor
Robert Farrington
July 5, 2026
Key Points
The U.S. Department of Education finalized a rule that ties federal student aid to graduate earnings.
Undergraduate programs must show graduates earn more than a typical high school diploma holder, and graduate programs must beat the typical bachelor’s degree holder.
Programs that fail the earnings test in two of three consecutive years lose access to federal Direct Loans, and institutions where these “low-earning outcome programs” dominate enrollment can lose Pell Grant eligibility too.
The U.S. Department of Education announced a final rule that will, for the first time, strip federal student loan eligibility from college and career programs whose graduates fail to out-earn workers who never enrolled.
The Student Tuition and Transparency System (STATS) and Earnings Accountability rule applies a single standard across every sector of higher education, from public universities to for-profit certificate schools, regardless of an institution’s tax status or the credential it awards.