The U.S. Department of Education announced on Apr. 17 a proposed rule to create an accountability framework for postsecondary education, aiming to address low earning outcomes among college graduates and the growing federal student loan portfolio.
The proposal seeks to ensure that students and taxpayers receive a reliable return on investment from higher education institutions, as the amount of outstanding federal student loans nears $1.7 trillion and concerns grow over graduates who are financially worse off after attending college.
Under the proposed rule, undergraduate programs whose typical graduates earn less than high school graduates would lose eligibility for federal student loans. Graduate programs would be required to produce earnings above those of average bachelor’s degree holders in order to retain access to these funds. Programs that consistently fail this standard could also lose access to Pell Grants.
"The Trump Administration’s proposed accountability framework is grounded in common sense: if postsecondary education programs do not leave graduates better off, taxpayers should not subsidize them," said Under Secretary of Education Nicholas Kent. "This consensus-backed framework will drive meaningful change in postsecondary education, ending years of regulatory whiplash and addressing student debt that has left too many students worse off."
This notice is the third and final set of rules aimed at implementing reforms under President Trump’s Working Families Tax Cuts Act. The public can submit comments through www.regulations.gov until May 20, with potential revisions based on feedback.
Background information provided by the Department highlights that Section 492 of the Higher Education Act requires public involvement before such regulations are finalized. The AHEAD Committee—a group representing various stakeholders—reached consensus in January on holding all academic programs accountable for their graduates’ earnings using data reported to the government, replacing previous overlapping rules with a unified standard.
