U.S. Higher-Ed Oversight Shifts: Schools Could Lose Direct Loans After Repeated Low Earnings Outcomes

Washington, D.C. — The U.S. Department of Education and a panel of stakeholders reached consensus Friday on a proposed new accountability framework that would tie access to federal student loans—and in some cases Pell Grants—to graduates’ earnings across all types of colleges and programs.

The agreement came at the final session of the Department’s Accountability in Higher Education and Access Through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee, part of a broader effort to implement higher-education changes in President Trump’s Working Families Tax Cuts Act.

Under the consensus language, programs that fail to meet earnings thresholds for two out of three years could cause an institution to lose access to the federal Direct Loan program, the Department said. If at least half of an institution’s Title IV aid recipients—or half of its Title IV dollars—are tied to failing programs, those programs could also lose Pell Grant eligibility.

Negotiators also agreed to eliminate the Gainful Employment debt-to-earnings measure, with the Department arguing it overlaps with the new earnings metric and adds administrative burden. Some higher-ed policy observers have warned that removing debt-based measures could reduce protections for students in certain career programs, even as the Department says it is aiming for a single, sector-neutral standard.

What parents should know: If your student is choosing a program, ask the school for recent graduate earnings and typical borrowing, and compare options before committing. Watch for the Department’s next step—publishing proposed rules for public comment—since details and timelines can change before anything takes effect.

This article was produced by an education parenting today journalist with the assistance of AI. This is not legal advice. All content is reviewed for accuracy and fairness.