The vast majority of bachelor's and graduate-degree programs pass new rules meant to hold colleges accountable

The vast majority of students earning bachelor's degrees are in programs that pass an earnings test set by Republican lawmakers.

What is college for? Whether it's to teach a student how to think, lead them to a good job, expand their social horizons or provide the economy and society with the workers we need is a big topic of debate among students, families, policymakers and higher-education leaders.

Now, Republican lawmakers and the Trump administration are weighing in by essentially say this: If you're going to borrow from the federal government to attend college, a degree should at least get you a salary higher than a high-school graduate. That is what the law Republicans passed through Congress last year stipulates in a requirement that went into effect this summer.

The vast majority of degree programs across the country meet this requirement, according to two new analyses. Just 2.9% of borrowers who took out loans in 2024 and 2025 were enrolled in programs that fail the new standard set by the Republicans, according to the Postsecondary Education and Economics Research Center at American University.

This earnings test follows more than a decade of efforts from policymakers on both sides of the aisle to try to hold schools accountable for their outcomes.

Under the law, the median earnings of graduates of undergraduate-degree programs four years after graduation need to be more than the median earnings of people aged 25 to 34 with only a high-school diploma in the same state. Both PEER and the Institute for Higher Education Policy, a research and advocacy organization, found that the vast majority of bachelor's-degree programs pass this test (though due to methodology differences, the two organizations' exact numbers differ some).

The bottom line: Most students will still be able to get federal loans to go to college and study whatever they want, even if their field doesn't offer a clear link to a job.

Erin Velez, the vice president of research at IHEP, said there are reasons besides earnings why students might want to go to college. But, "at a minimum you should be making more than you would have if you hadn't gone," she said.

"That's a relatively low bar," she said.

For graduate certificate and degree programs, graduates four years out need to be making more than bachelor's-degree holders ages 25 to 34. In some cases, graduates of those programs are measured against bachelor's-degree recipients in the same field and in the same state, in other cases they're measured against bachelor's-degree recipients overall.

If programs fail these tests two times in three years then they lose access to federal student loans. But most students that are studying for their degrees today are in programs that won't face that consequence.

Undergraduate degree test may not go far enough

In fact, according to Jordan Matsudaira, the director of the PEER Center and the chief economist at the Education Department during the Biden administration, the test the law uses to measure the success of undergraduate degree programs may be too weak. Roughly 0.3% of students receiving federal financial aid are in failing bachelor's-degree programs and 0.2% of student loan volume is in these programs, according to PEER.

The bachelor's-degree program of study with the most students in failing programs is religion or religious studies, according to PEER. But since many of these religion programs don't leave students with debt or don't participate in the federal student-loan program at all, they won't face the consequences imposed by the law - the loss of federal loan eligibility, said Clare McCann, the managing director of policy and operations at PEER.

Matsudaira worked on a different set of accountability regulations during the Biden administration. The Obama administration kicked off the push to hold schools accountable to some kind of earnings test through regulations called "gainful employment" more than a decade ago. That rule required all programs at for-profit colleges and nondegree programs at all types of schools to lead to gainful employment in a recognized field.

The rule was plagued by delays and litigation from the for-profit college industry. Ultimately in 2023, the Biden administration established a version of the rule that required these programs to lead graduates to salaries that are higher than the average high-school graduate and leave them with debt payments that are affordable as compared to their income.

The test established in the One Big Beautiful Bill Act offered Republicans' answer to this accountability question. It applies to all undergraduate and graduate-degree programs regardless of sector.

"These earnings thresholds have gotten weaker over time," relative to the Obama-era and Biden-era rules, Matsudaira said. "The earnings threshold chosen here is a little bit softer," than what was used in earlier accountability regulations.

Requiring that graduates of college degree programs earn more than someone with a high-school diploma is a relatively low floor, Matsudaira said. "It is very much the case that programs that have earnings that low really do see really high default rates on loans."

Some of the pushback surrounding the rule focused on the concern that the regulations force socially valuable but low-paying degrees out of the federal loan program. IHEP's analysis found that's not the case.

They dug into the results for "occupations where we absolutely need them in society," but where "we know the earnings are really low," like education and social work, Velez said.

"When you're thinking about bachelor's-degree programs they're pretty much all going to pass," she said.

Still, there are some programs that may pass the government's threshold, but still fail to regularly lead students to jobs that earn them enough to pay back their loans. IHEP found that just 82% of bachelor's-degree programs meet that higher standard.

Graduate-degree programs face a higher bar

A slightly higher share of graduate-degree programs fail the earnings test. Roughly 1.8% of students receiving federal student aid for graduate school are in failing degree programs and about 1.9% of loan volume is in these programs, according to PEER.

The type of degree most likely to fail this test is something called mental- and social-health services and allied professionals, which includes degrees that help people become different kinds of mental-health professionals, including substance-abuse counselors, genetic counselors and more. It is a separate degree from a master's in social work.

To Matsudaira, the test used for graduate-degree programs, which requires them to lead to earnings that are higher than bachelor's-degree recipients, may be sweeping up too many fields where borrowers could reasonably repay their debt.

For young workers, the median salary of a bachelor's-degree recipient working full-time is $66,600, according to the Education Department, which is "pretty high," Matsudaira said.

"I don't necessarily think it's the case that nobody can afford to repay loans at that higher level of earnings," he said.

Still, graduate programs have been a focus of policymakers on both sides of the aisle, since in recent years, they've accounted for a large share of the growth in student debt. The Republican megabill also capped the amount students can borrow to attend graduate school for the first time in decades.

Where most failing programs are

The credential level with the most borrowers enrolled in failing programs is undergraduate certificates. They were initially carved out of the earnings test in the Republican megabill, but now they're required to lead workers to a salary that's higher than the median high-school graduate under different regulatory authority.

Nearly one in four federal student-loan borrowers studying for an undergraduate certificate is enrolled in a program projected to fail the earnings test, according to PEER.

For-profit colleges enroll 57.4% of students in failing programs, a disproportionate share compared to the 10.4% of students they enroll overall, according to PEER. That's partly due to the fact that they enroll a higher concentration of students in undergraduate-certificate programs.

These shorter programs help prepare students for jobs in cosmetology, medical billing and more. They're the fastest growing sector of enrollment in part because of their short timeline, relatively low price and the promise that they prepare students directly for a job. But in many cases, they offer little in the way of an earnings boost.

Velez said it's not totally surprising that earnings would be less in these programs because students are spending less time in school. Still, she emphasized that students should be able to count on a degree or credential that they pay for making them better off.

"The federal standard currently is a floor and not a finish line," Valdez said. "If they're making $1 more than the average high-school graduate that's probably not enough to pay back their student loans. It's a starting point, it's not where we want to end up."

-Jillian Berman