US Department of Education Proposes Tighter Rules on Low-Income College Programs –

The U.S. Department of Education issued a Notice of Proposed Rulemaking aimed at creating a new accountability framework for postsecondary institutions, targeting programs that fail to achieve adequate financial outcomes for graduates.

This proposal is supported by the Working Families Tax Cuts Act issued by President Donald Trump and the current administration authorities.The move comes as the federal student loan portfolio approaches $1.7 trillion, with concerns that many students will remain financially disadvantaged after completing higher education. Officials describe the proposal as a structural shift aimed at addressing borrowing levels and aligning academic programs with labor market demands.Proposed earnings criteria for program eligibilityUnder the draft rule, undergraduate programs would lose access to federal student loans if their typical graduates do not earn more than individuals with only a high school education. Graduate-level programs will be required to demonstrate earnings beyond those earned by an average bachelor’s degree holder.Programs that consistently fail to meet these standards may also lose eligibility for Pell Grants in some cases.

The framework applies uniformly to all institutions, regardless of sector or tax status, providing a single standard of accountability across higher education.A framework formed by consensus of the AHEAD CommitteeThe proposal follows consensus reached by the Access and Higher Education Accountability through the Demand-Based Workforce Commission (AHEAD). The group, which includes representatives of taxpayers, legal aid organizations, higher education institutions, businesses and students, agreed on a unified accountability model earlier this year.The consensus framework measures outcomes across all types of programs, from certificates to graduate degrees, using federally reported earnings data. It relies on the provisions of the Working Families Tax Cuts Act as well as existing authorities such as Gainful Employment and the Quality Assurance Authority.Public consultation and regulatory processThe proposed rule will be open for public comment for 30 days, with submissions being accepted through the federal electronic rulemaking portal.

Comments must be received by May 20, 2026, after which the Department will review the comments and may revise the regulation.The proposal represents the latest installment in a set of three rules designed to implement student aid reforms under the law. This follows the negotiated rulemaking process required under Section 492 of the Higher Education Act of 1965, which requires public and stakeholder input before formal rules are published.Background to negotiated rulemakingThe Department announced plans to begin negotiating the rulemaking on July 25, 2025, following legislative changes in federal student aid. The AHEAD Committee concluded its second session on January 9, 2026, after five days of deliberations, with all participants supporting the draft regulation.Previous administrations have tried to institute similar accountability measures without reaching agreement. The current proposal provides a unified framework that aims to replace multiple overlapping systems and enforce consistent standards across the sector.