Dozens of higher education groups are lobbying the Education Department to revise proposed regulations that could cut off federal student aid for thousands of programs whose graduates earn meager salaries, including in cosmetology, theology and the performing arts.
Some officials said the impact could be catastrophic for some trade schools and small colleges with low-paying majors and graduate degree programs. For instance, the government estimated the proposed regulations could shut off federal loans to 89 percent of students enrolled in master’s programs for religion and religious studies.
The Association for Biblical Higher Education, which represents many Christian colleges, asked the government to make major changes or exempt religious programs entirely.
“We don’t want it to be the single biggest defunding of religious higher education in the United States,” said Philip Dearborn, president of the association.
But supporters say the regulations, expected to be finalized as early as June, are sorely needed to keep taxpayer-funded financial aid from flowing to programs that don’t adequately prepare students for good jobs. Overall, the Education Department estimates that more than 5 percent of undergraduate and graduate programs would flunk the new earnings rules, affecting hundreds of thousands of college students.
Under the proposal, for federal loans to be preserved, graduates would have to earn at least as much as the average pay for people without that level of education. For example, students completing undergraduate degrees would generally need to earn more than people with only high school diplomas.
“The bar programs have to meet to keep their federal loan access is exceedingly low,” Michelle Dimino, director of education for Third Way, a center-left think tank, said in an email. “If you can’t consistently meet such a low bar, it’s clear that something needs to be fixed, and these rules introduce some accountability.”
The system is an outgrowth of the politically charged “gainful employment” rule. That Obama-era regulation threatened to revoke federal financial aid eligibility from career-training programs that saddled students with unaffordable education debt. For-profit colleges regarded the rule as an attack on their sector, after some schools were accused of misleading prospective students and using illegal recruitment tactics to boost enrollment.
The rule spawned a series of lawsuits and revisions spanning three administrations, before congressional Republicans absorbed a version into the new accountability framework created under the One Big Beautiful Bill. The standard directs the Education Department to hold all institutions accountable for programs that regularly produce graduates with low earnings.
In the fall, the department and a committee of higher education experts negotiated details of the framework, scrapping some parts and retooling others. A graduate’s student debt will no longer factor into how a program is assessed, but the department will continue to consider whether alumni earn more than someone without a degree.
To pass the earnings test, undergraduate programs must show alumni have higher incomes than high school graduates four years after completing a degree, using the median earnings for people ages 25 to 34 with only a diploma. Graduates of master’s programs, meanwhile, must earn more than the median for people aged 25 to 34 with a bachelor’s degree in similar fields.
A program that fails in two out of three years will lose access to federal student loans. If half of a college’s federal financial aid recipients are in failing programs, those programs will also become ineligible for Pell Grants, earmarked for undergraduate students from low- and middle-income families. Appeals are limited to whether the Education Department erred in the earnings calculation.
The Education Department did not respond to a request for comment about the schools’ concerns. But Trump administration officials have talked publicly about the need to hold colleges accountable for taxpayer money.
“When you sign up to go into higher education and you’re taking on debt, you want to leave with a better job than the one that you had,” Nicholas Kent, the undersecretary of education, said at an event last month at the American Enterprise Institute, a conservative think tank in Washington.
“And if you can’t get there four years after you graduate, taxpayers should be asking the question: What value are you actually getting?”
Ted Mitchell, president of the American Council on Education, which represents nearly 1,600 colleges and universities, said he thought the government was looking at too short a time period to see gains in students’ salaries.
“I think we have always understood the benefits of higher education to be long-term, whether those are economic, health, civic life,” Mitchell said. “All of those things are long tails, not short.”
Mitchell also questioned whether it is fair to use the same salary benchmarks for people with undergraduate degrees in vastly different fields, such as social work and civil engineering. He called it “a ham-handed approach to different disciplines.”
The council and nearly 40 other organizations filed comments with the Education Department in May expressing concern about the method to calculate earnings thresholds, the burden on schools to report additional data in a short period of time, the limited appeals process and the threat to take away schools’ access to not only student loans, but also Pell Grants. The groups argued Congress intended the punishment to be limited to student loans.
Administrators from several Christian colleges, including Trevecca Nazarene University and Milligan University in Tennessee, warned the new rules could potentially force them to make job cuts.
“If we lost access to federal funding for those programs, we would almost certainly have an enrollment decline,” said Milligan President Stephen Waers. “A decline of that magnitude would create significant long-term headwinds for the seminary that would be difficult to overcome absent a significant charitable gift.”
Waers questioned the decision to cut funding from universities solely because graduates don’t earn high salaries. He noted the school’s seminary prepares many students to serve in churches in Appalachia.
“When our students choose to work and serve in these churches, they do so fully aware that they will not amass significant wealth,” he said. “They are doing so because of a strong call to ministry.”
The regulations also threaten to cut off aid for programs in other fields where students generally earn low salaries, including many trade schools.
The government calculated that 100 percent of all associate degree programs in cosmetology and somatic bodywork would fail the test. And the American Association of Career Schools, which represents many beauty schools, warned the regulations would “push out” programs that produce roughly 85 percent of licensed cosmetologists, barbers and massage therapists who enter the workforce each year.
“These are careers no algorithm can replace, and whose skills are portable and in demand,” John Russell, executive director of the association, said in a statement. He said lawmakers intended to exclude undergraduate certificate programs, even though the regulations include them.
Jason Altmire, chief executive of Career Education Colleges and Universities, said he hoped the final rules would fully take into account regional variations and the fact that some workers choose to work part-time, rely largely on tips for compensation or face lower pay because of gender disparities.
“Without these modifications, the new rule endangers the viability of many high-quality programs serving students from disadvantaged populations,” Altmire, whose organization represents many trade schools, said in a statement.
The rules could also affect low-paying majors at top-ranked universities. That includes master’s programs in music at Northwestern University, the University of California at Los Angeles and Yale University; museum studies at Harvard University and Tufts University; and a drama/theater program at Brown University.
The Education Department cautioned that the numbers issued so far are only estimates based on incomplete and preliminary data. And it would be at least another year or two before any schools lose access to federal funds, education industry groups say.
Using early data, the government publicly identified more than 2,800 programs that could potentially lose funding. However, researchers at American University’s Postsecondary Education & Economics Research Center found more than 600 of those programs probably would meet the new standards after they corrected an apparent error in the earnings thresholds colleges must meet.
The American University data shows the regulations could potentially affect more than 32,000 students in associate and certificate health programs at the Ultimate Medical Academy in Florida alone. Ultimate Medical did not respond to requests for comment.
Some colleges could change some of their programs to try to meet the new standards.
And the full impact will depend on additional data and the final regulations – which many trade organizations still hope will change.
This article originally appeared on The Detroit News: Loan rules would gut aid for thousands of low-paying college majors
Reporting by Todd Wallack, Danielle Douglas-Gabriel, The Washington Post / The Detroit News
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