Higher Ed Rulemaking To-Do List: Make All Programs Pass Minimum Earnings Test and Maintain Financial Value Transparency Framework

Students and families should be confident that the college programs they invest their time and money in will pay off in the workforce. The Department of Education (ED) can help provide that assurance by developing regulations that ensure all types of programs are covered by a minimum earnings test and maintaining the Financial Value Transparency (FVT) framework. Beginning January 5, ED and the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee will have the opportunity to do just that.

ED and the AHEAD committee will develop new regulations that implement the “do no harm” accountability framework included in the One Big Beautiful Bill Act (OBBBA) and consider potential changes to the existing Gainful Employment (GE) and FVT regulations. Developing these regulations presents an important opportunity for the agency and negotiators to ensure higher education provides strong outcomes for all students.

The OBBBA accountability framework establishes an earnings premium test that assesses whether students are, on average, better or worse off after attending a given program. For undergraduate degree programs, the median earnings of students who complete will be compared to the median earnings of high school graduates. For graduate certificate and degree programs, the median earnings of completers will be compared to the median earnings of bachelor’s degree recipients. If a program fails the earnings premium test for two years in a three-year period, it will lose eligibility to offer federal loans to its students. This accountability metric creates incentives for colleges to ensure program quality, without cutting off student access to other, nearby high-quality programs in their chosen field of study. A recent analysis found that almost all the programs projected to fail this earnings test are located near a program in the same field of study with better outcomes.

ED and the AHEAD committee should add these items to their to-do list for the next round of rulemaking: subject all programs to a minimum earnings test and preserve the FVT framework.

Ensure all programs pass minimum earnings test, including undergraduate certificate programs

While earnings are not the only way to measure the value of postsecondary education, no program should consistently leave students worse off than if they had never enrolled. Research from the PEER Center estimates that about a quarter of students enrolled in undergraduate certificate programs attend a program that would fail the OBBBA earnings test —a much higher share than for any other credential level. Undergraduate certificate students only make up 8 percent of federal financial aid recipients but over half (52 percent) of students enrolled in low-earning programs.

Applying a minimum earnings test to undergraduate certificate programs is consistent with congressional intent. Although OBBBA omits these programs, a supporting document about the law released by Senate Health, Education, Labor, and Pensions Committee Chairman Sen. Bill Cassidy (R-LA) clarifies that lawmakers did not intend to exempt them from accountability. That document notes undergraduate certificate programs are covered by a similar earnings test in the GE regulation, which Congress explicitly preserved in OBBBA. By choosing not to scale back, eliminate or sunset the GE regulation—while delaying the implementation of other higher education regulations until 2035—Congress affirmed the need for a comprehensive accountability framework that ensures oversight of all programs, regardless of sector or credential type.

Maintain the Financial Value Transparency framework

The FVT framework complements the accountability framework by giving students and families more information than ever before about program costs and outcomes, so they can make more informed decisions about where to enroll and what to study. And the insights FVT can provide are not available from other Education Department sources like the College Scorecard and the Integrated Postsecondary Education Data System.

The FVT framework includes new detailed data on costs and financial aid, such as the tuition, fees, books, supplies, and equipment students would pay for the full length of that program. By including grant aid information, the FVT data would allow for more detailed and precise net prices by program, giving students a clearer picture of their out-of-pocket costs for pursuing a particular educational pathway.

FVT also includes information about program length, accreditation, licensure, student debt (both private and federal loans), student earnings after graduation, debt-to-earnings ratios, and an earnings premium measure similar to the earnings test in OBBBA. By including programs reported at the 6-digit Classification of Instructional Programs (CIP) code level, FVT will allow students and families to assess costs and outcomes at more specific programs, rather than broad program categories.

Additionally, by providing clear, consistent data on programs offered by all types of colleges, FVT supports institutional improvement efforts and evidence-based policymaking. Colleges, researchers, and policymakers can use those data to assess whether programs are delivering strong economic returns on students’ investments and explore how different levers, such as tuition, financial aid, and workforce alignment, can improve the value students receive.

To support program improvement and informed student choices, we urge the Education Department to maintain the FVT regulations going forward and to publish the two years of FVT data that have already been collected.

By maintaining transparency through the FVT framework and applying a minimum earnings test to all programs, policymakers can help ensure all students—no matter where they enroll—have access to programs that deliver real economic value.