The U.S. Department of Education has issued final regulations establishing a new earnings accountability test for all postsecondary programs. The regulations will take effect on July 1, 2027.

The new regulations use an earnings premium measure to assess whether program graduates meet specified earnings benchmarks. Undergraduate programs will be evaluated based on whether graduates earn at least as much as working adults ages 25–34 with only a high school diploma. Graduate programs will be evaluated based on whether graduates earn at least as much as working adults ages 25–34 with only a bachelor’s degree. Programs that fail the earnings test in two out of three consecutive years will be considered low-earning outcome programs and may lose eligibility for federal Direct Loans. If a program fails the earnings test for three consecutive years, ED may also terminate the institution’s Title IV eligibility, including Pell Grant eligibility, if more than half of the institution’s enrollment and Title IV funding are tied to programs that do not meet the earnings threshold.

ED will first calculate the earnings test in early 2027, applying to the 2027–28 award year. As a result, programs that fail in both 2027 and 2028 could be designated low-earning outcome programs as early as the 2028–29 award year.

An upcoming report in WSCUC’s Key Indicators Dashboard (KID) will use ED data to help institutions better understand how their programs may be positioned with respect to the new requirements. We will continue to monitor implementation of the new regulations and provide updates as additional guidance becomes available.