Education Department Proposes Student Loan Eligibility Tied to Graduate Earnings

The Education Department is considering a rule that would end federal student loan eligibility for undergraduate programs whose typical graduates do not earn as much as a high school graduate. Graduate programs would also need to produce earnings above those of an average bachelor’s degree holder to keep access to federal loans.

The department announced the proposal in April and opened a public comment period at the same time.

2 percent of humanities and liberal arts programs would fail the earnings test. Under Secretary of Education Nicholas Kent said the framework rests on a simple principle. “If postsecondary education programs do not leave graduates better off, taxpayers should not subsidize them,” he said.

He added that the rule would end years of regulatory changes and address student debt levels that have left many borrowers worse off. The American Council on Education, joined by nearly 40 other groups, submitted comments urging the department to make critical adjustments before any final vote.

” The Association for Biblical Higher Education asked the department to adjust the framework or exempt religious studies programs at faith-based schools.

8 percent of undergraduate religious studies programs would fail the test. An agency spokesperson said the department is currently reviewing comments. The proposal follows passage of Trump’s One Big Beautiful Bill Act, which set new annual federal loan limits for graduate students beginning in July 2026: $20,500 for most programs and $50,000 for professional programs such as law and medicine.