Most College Programs Clear New Federal Earnings Bar, but Fewer Help Students Recoup Their Costs, Especially in Public Service Fields

IHEP analysis finds that programs preparing students for public service careers often meet the One Big Beautiful Bill Act’s new earnings standard but fall short once college costs are considered.  

WASHINGTON, DC (October 5, 2026)—College programs that prepare students for essential, public service careers—like teaching and social work—clear the bar for earnings set by the One Big Beautiful Bill Act (OB3) at nearly the same rate as other programs. But a new report from the Institute for Higher Education Policy (IHEP) finds that far fewer of those programs leave students financially better off once college costs are factored in.   

When Purpose Meets Payoff: How Program, Institution, and Field Shape Postsecondary Value compares undergraduate programs against both the new OB3 earnings premium threshold and Threshold 0—a Postsecondary Value Framework measure that asks whether graduates earn at least as much as a typical high school graduate and enough to recoup their investment in college within ten years. The report also looks beyond earnings. It examines graduates’ access to and satisfaction with employer-provided benefits like health insurance, paid time off, and retirement plans.  

“The new federal earnings standard is a floor, not a finish line,” said Daniella Paradise, IHEP Research Analyst and author of the report. “For the first time, all programs nationwide will be held to a federal accountability rule. But our findings show plenty of programs pass the federal earnings standard while still leaving students worse off financially once costs are factored in. This is especially true for programs that prepare students for public service careers in which compensation falls far short of the enormous value those workers provide to society. The next step is to ensure students in these fields don’t just out-earn a high school graduate but see a return on what they invested in their credential. Students pursuing essential careers shouldn’t have to choose between meaningful work and financial security.”

IHEP’s analysis of approximately 40,000 undergraduate programs finds that 93 percent, enrolling 88 percent of students who graduate each year, pass the OB3 threshold. Certificate programs and for-profit institutions account for disproportionate shares of programs that fail the OB3 threshold. Considering Threshold 0, however, 82 percent of programs, representing 87 percent of graduates, pass. The gap in OB3 and Threshold 0 pass rates is particularly visible in fields that prepare students for essential but historically underpaid fields, including early childhood education and social work.

The findings come as institutions prepare for the implementation of federal earnings accountability. A provision of the OB3 legislation ties every program’s continued access to federal student loans to a minimum standard for graduates’ outcomes—specifically, whether the median earnings of those graduates meet or exceed the median earnings of high school graduates (for undergraduate programs) and bachelor’s degree recipients (for graduate programs). Programs that fail the earnings test in two out of three consecutive years will lose federal Direct Loan eligibility, with the earliest penalties taking effect on July 1, 2028. The U.S. Department of Education plans to publish the first earnings test results in 2027 and programs that fail the earnings test will be required to provide warnings to current and prospective students.

Key findings include:

• Nearly all bachelor’s degree programs pass both OB3 and Threshold 0. Over 99 percent of bachelor’s degree holders attended programs that pass the OB3 threshold, and 90 percent attended programs that also pass Threshold 0.
• Certificates and for-profit programs account for most failing programs. Certificate programs produce 24 percent of graduates but account for 91 percent of graduates from programs that fail the OB3 threshold. For-profit programs make up 35 percent of total graduates but 85 percent of those from failing programs.
• High social value, low-wage fields pass OB3 at rates similar to other fields but fall short on affordability more often. In Human Development and Family Studies (a field containing many early childhood education programs), 97 percent of bachelor’s degree graduates attended OB3-passing programs. Once the cost of college is factored in, only 58 percent attended programs that also met Threshold 0—a frequent pattern across many early childhood education and social service fields.
• Nonearnings benefits are a bright spot, but satisfaction with earnings is low. Bachelor’s degree holders in socially valuable fields often have access to health insurance, paid time off, and retirement benefits, and report strong satisfaction with job security. But satisfaction with compensation remains relatively low. Education and Public Administration and Social Services graduates report below average rates of satisfaction with their pay.

Federal and state policymakers, institutional leaders, and employers each have a role to play in ensuring programs deliver a minimum economic return, so students can pursue careers that serve their communities without absorbing unacceptable financial risk, by addressing three areas: 

• Support and incentivize strong outcomes for all students by enforcing minimum earnings standards across all programs, strengthening the education-to-career pipeline, and increasing wages and support for workers in high-purpose fields like teaching and social work.
• Invest in affordability to improve value by protecting and increasing federal Pell Grant funding, expanding state investment in public higher education, and growing institutional need-based aid.
• Improve data and promote transparency by passing the College Transparency Act, making program-level costs and outcomes data publicly available, and strengthening statewide longitudinal data systems.

The research draws on program-level data from the College Scorecard, along with data from the Integrated Postsecondary Education Data System (IPEDS) and the 2024 American Community Survey 5-Year Sample. To examine value beyond earnings, IHEP also analyzed data from the 2012/17 Beginning Postsecondary Students Longitudinal Study (BPS) and the 2016/20 Baccalaureate and Beyond Longitudinal Study (B&B). The report is accompanied by an interactive dashboard that lets users explore program-level results by field, credential level, and institutional control.

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