Federal earnings test threatens college programs |
Nearly 2,900 U.S. college programs could fail the Department of Education’s new earnings test, potentially jeopardizing their eligibility for federal student loans, according to an analysis by higher education marketing agency Validated Insights. The test assesses whether graduates earn more than high school graduates in the same state, with 2,880 programs currently falling below the threshold and another 1,995 passing by less than 10%. The failing programs enroll approximately 644,000 students, including more than 308,000 federal borrowers. Undergraduate certificate programs face the greatest risk, with 29% failing, particularly in health care, while associate, bachelor’s, and master’s degree programs show considerably lower failure rates. The report recommends strategies such as integrating industry certifications, expanding paid work-based learning, and improving graduate placement in higher-paying jobs. Federal determinations are expected in early 2027, with programs potentially losing federal loan eligibility as early as the 2028–29 academic year if they fail twice within three years.