The U.S. Department of Education’s Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee reached consensus this month on proposed regulations that would create a new earnings accountability test for all postsecondary programs. The regulations are anticipated to take effect July 1, 2026, following a public comment period.

Under the proposed regulations, graduates of undergraduate programs would be required to earn more than individuals age 25-34 with a high school diploma, and students who complete graduate programs would need to earn more than individuals age 25-34 with a bachelor’s degree. Students enrolled in degree and certificate programs that fail this earnings test in two out of three consecutive years may lose access to federal Direct Loans.

Additionally, institutions would be required to demonstrate that at least half of their Title IV recipients and at least half of their total Title IV funds are not associated with programs that fail the earnings test in two of three consecutive years. Students enrolled at institutions that do not meet this requirement twice within a three-year period could lose all access to federal student aid. If a program fails the test for two consecutive years, an additional test will determine if 50% of the institution’s Title IV aid recipients are enrolled in or 50% of the institution’s Title IV revenue come from programs deemed “low earnings.” If either threshold is met, students in the affected programs may lose access to Pell Grant funds.

Institutions would be required to begin reporting program- and student-level data by October 1, 2026, and annually thereafter. ED would then calculate the earnings test and notify institutions in early 2027 and early 2028. Under the proposed timeline, July 1, 2028, is the earliest date a program could lose access to federal student loans.

Additional information on the proposed regulations, including required student disclosures for programs that fail the earnings threshold, are available on the Department’s website. Details on an upcoming WSCUC workshop on the proposed requirements and reporting will be shared in the coming weeks.