Education Department Will Cut Federal Loans From Low-Earning College Programs
About this episode
The episode discusses a new rule by the U.S. Department of Education that will cut federal loan eligibility for low-earning college programs.
The U.S. Department of Education announced a final rule that will, for the first time, strip federal student loan eligibility from college and career programs whose graduates fail to out-earn workers who never enrolled . The Student Tuition and Transparency System (STATS) and Earnings Accountability rule applies a single standard across every sector of higher education, from public universities to for-profit certificate schools , regardless of an institution's tax status or the credential it awards. The premise is simple: undergraduate programs must demonstrate that their graduates earn more than working adults who hold only a high school diploma. Graduate programs must show their completers earn more than typical bachelor's degree holders. A program that can't clear that bar for two of three years will lose the ability to enroll students who borrow federal loans. That doesn't mean it has to shut down - but the government is not going to continue to lend to students who end up having a bad financial outcome. " If a program cannot show that it leaves its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers ," said…
People in this episode
Host: The College Investor
Topics covered
- federal loans
- higher education
- student outcomes
- financial accountability
- education policy
Keywords
- federal student loans
- college programs
- earnings accountability
- education department
- financial outcomes
Mentioned in this episode
Organizations: U.S. Department of Education, One Big Beautiful Bill Act
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