The US Department of Education has issued a notice of proposed rulemaking aimed at establishing a new accountability framework for postsecondary institutions, targeting programs that fail to deliver adequate financial outcomes for graduates. The proposal is supported by President Donald Trump’s Working Families Tax Cuts Act and current department officials.The move comes as the federal student loan portfolio reaches $1.7 trillion, with concerns that many students are left behind financially after completing higher education. Officials describe the proposal as a structural change aimed at addressing debt levels and aligning education programs with labor market demands.Proposed Earnings Criteria for Program EligibilityUnder the draft rule, undergraduate programs would lose access to federal student loans if their typical graduates earn no more than those with only a high school education. Graduate-level programs will require demonstrated earnings that are higher than the average bachelor’s degree holder.Programs that consistently fail to meet these standards may also lose eligibility for Pell Grants in some cases. This framework applies equally to all institutions, regardless of sector or tax status, introducing a single standard of accountability in higher education.Consensus framework developed by the AHEAD CommitteeThis proposal follows consensus reached by the Accountability and Demand-Based Workforce Peel (AHEAD) Committee on Access in Higher Education. The group, made up of representatives of taxpayers, legal aid organisations, higher education institutions, businesses and students, agreed on a unified accountability model earlier this year.The Agreed Framework measures outcomes for all program types, from certificates to graduate degrees, using federally reported earnings data. It builds on provisions within the Working Families Tax Cuts Act as well as existing authorities such as the Gainful Employment and Quality Assurance Authority.Public consultation and regulatory processThe proposed rule will be open for public comment for 30 days, with submissions accepted through the federal eRulemaking portal. Comments must be received by May 20, 2026, after which the Department will review the feedback and may revise the rule.The proposal represents the final installment in a set of three rules designed to implement student aid reforms under the Act. It follows the rulemaking process required by Section 492 of the Higher Education Act of 1965, which mandates public and stakeholder input before publication of a formal rule.Background to Negotiated RulemakingThe department announced plans to begin negotiating rulemaking on July 25, 2025 following legislative changes to federal student aid. The AHEAD Committee concluded its second meeting on 9 January 2026 after five days of deliberations, with all participants supporting the draft regulations.Previous administrations tried to establish similar accountability measures without consensus. The current proposal puts forward a robust framework that aims to replace multiple overlapping regulations and enforce consistent standards across the sector.
