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Under a New Federal Rule, Colleges Must Leave Grads Better Off or Lose Financial Aid

If an undergraduate program's graduates don't earn more than workers who never went to college, that program could be cut off from federal student loans. But is a degree just about making more money?
Tiffany Camhi, Cory Turner
This illustration shows people in various styles of clothing running across a finish line.
 (Tara Anand for NPR)

This month, the U.S. Department of Education began rolling out a new accountability test that most colleges and universities will soon have to pass.

The test itself is simple: If an undergraduate program’s graduates don’t earn more than workers who never went to college, that program could be cut off from federal student loans. The same goes for any graduate program whose graduates earn less than someone with only a bachelor’s degree.

“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 Under Secretary of Education Nicholas Kent in a recent statement.

But this new test, known as “do no harm,” raises some thorny questions about the purpose of college. Like: Is it just about making more money?

Some advocates for postsecondary arts education think not.

“Earnings is only a small piece of that puzzle,” said Lee Ann Scotto Adams, executive director of the Strategic National Arts Alumni Project (SNAAP), a nonprofit that studies the careers of arts graduates.

She and Doug Dempster, the president of SNAAP, worry the new test might lead colleges and universities to preemptively slash low-earning creative arts programs in music, theater, studio art and design. Dempster says that could lead to a further devaluing of jobs that are critical to a well-functioning society.

“We know we need nurses. We know we need journalists. We know we need early childhood educators,” he said. “We don’t know how many artists we need, but I can guarantee that if you eliminate access, we will impoverish our cultural life nationally.”

How the new standard will work

The new earnings test comes courtesy of last year’s One Big Beautiful Bill Act, which included a slew of big higher education policy changes meant to address rising concerns over the cost and value of college.

Higher education experts across the political spectrum told NPR the test sets a pretty reasonable expectation: In many states, federal data shows, graduates of bachelor programs will have to earn a minimum of about $30,000 to $41,000 a year for their program to pass.

“This is really a very low floor,” said Christopher Madaio, a senior adviser at the nonprofit The Institute for College Access & Success. “I mean, high school earnings is not an exceedingly high metric for a program to meet.”

Programs fail the test when they don’t meet the earnings requirement for two out of three consecutive years.

The current test does not take student loan debt into account, which means there’s no way to distinguish between a graduate who is struggling with low pay while being debt-free and a graduate who is struggling with low pay while also paying off tens of thousands of dollars in loans.

The Education Department says it will begin calculating the first year of graduate earnings in early 2027, and “some programs could be designated as low-earning outcome programs beginning in the 2028-2029 [financial aid] award year.”

The kinds of programs that are likely to fail

According to Education Department estimates, the vast majority of undergraduate and graduate programs should easily pass the new earnings test.

But more than 800,000 students attend a program that would likely fail the measure, according to department data. Roughly half of those students are enrolled in for-profit schools, which already have a reputation for shortchanging students.

Other takeaways from the department’s data:

  • About 18% of undergraduate certificate programs, which often bill themselves as career-focused fast tracks, would fail the earnings test. Specifically, certificate programs in cosmetology and somatic body work have the highest predicted failure rates.
  • Two-year associate degree programs have the next highest failure rate, at 6%. Associate programs that train specialized educators, including early childhood educators, are the most likely to fail.
  • Most traditional, four-year bachelor programs fare well, with roughly 1% failing the earnings test. When these programs do fail, it’s often in areas like theater, music and studio art.
  • About 4% of master’s degree programs would fail, with the highest failure rates for programs teaching mental and social health services.

For one music teacher, it was “never about the money”

Some of the United States’ most prestigious music programs — known for training the country’s most talented young musicians — are among the 14% of bachelor music programs predicted to fail the new earnings test, according to Education Department data. That includes The Juilliard School in New York City, the New England Conservatory in Boston and Indiana University Bloomington’s Jacobs School of Music.

The undergraduate music program that Cindy Flores attended at Portland State University (PSU) also wouldn’t pass. Flores teaches mariachi music to middle and high school students at Salem-Keizer Public Schools in Oregon’s Willamette Valley.

Cindy Flores smiles as she teaches mariachi to students at McKay High School in Salem, Oregon. 'If it wasn't for PSU and the loans I could get … I wouldn't be a Mexican American mariachi teacher for my Mexican American students,' she said.
Cindy Flores smiles as she teaches mariachi to students at McKay High School in Salem, Oregon. “If it wasn’t for PSU and the loans I could get … I wouldn’t be a Mexican American mariachi teacher for my Mexican American students,” she said. (Eli Imadali | OPB)

Her path to becoming a full-time music teacher started with studying music education at PSU; then she got an educators license from Western Oregon University — and she used federal student loans to help pay for all of it.

She now holds close to $55,000 in federal student loan debt.

Flores said she wouldn’t be where she is now without that access to federal aid.

“If it wasn’t for PSU and the loans I could get … I wouldn’t be a Mexican American mariachi teacher for my Mexican American students,” she said.

But given the new federal test, future PSU music students might not have the same access to federal student loans that Flores did.

She said she feels lucky to have found a job that she’s passionate about and that pays a living wage. But, for her, a career in music was about much more than a paycheck.

“It is never about the money,” she said. “I realized I wanted to have a career in music when I was in the eighth grade, because every music teacher I had were such good role models in my life and I wanted to be part of that community.”

Defining success in the arts

SNAAP’s Lee Ann Scotto Adams said the federal government’s one-size-fits-all accountability approach doesn’t make sense for students graduating from creative arts programs because wages aren’t the only measure of success for studio artists, musicians and designers.

“Yes, you need to earn money to make a living, but we see our creative workers want the ability to have independence in their work. They want jobs that are socially conscious. They want to make an impact culturally,” Scotto Adams said. “These are all metrics that fall outside of just straightforward earnings metrics.”

She also takes issue with looking at earnings in the first few years after graduation. Scotto Adams points to SNAAP survey data that shows arts graduates often have unpredictable incomes at the beginning of their careers, but their pay tends to stabilize and increase over time.

“Looking at earnings as the sole metric of success is very limited, and that’s because artists have nonlinear careers,” Scotto Adams said. “For the most part, people who graduate from these programs move into careers that they’re personally satisfied with.”

Students considering any of the at-risk programs won’t immediately lose access to federal aid. While the accountability test is being rolled out this month, its implementation will be phased in over the next couple of years.

Transcript:

JUANA SUMMERS, HOST:

The U.S. Department of Education is rolling out a new federal test, one that most colleges and universities will eventually have to pass. The test is known as Do No Harm, and it’s pretty simple. If a program’s graduates don’t earn more than someone who never went to college, that program and its students could lose access to federal student loans. To better explain how this will all work and the impact it might have, I’m joined by NPR education correspondent Cory Turner. Hi there.

CORY TURNER, BYLINE: Hey, Juana.

SUMMERS: So, Cory, losing access to federal student loans sounds like a really big deal. So tell us how exactly this Do No Harm test is going to work.

TURNER: Yeah. So this new test, it comes courtesy of Republicans’ One Big Beautiful Bill Act from last year. And, I mean, really, as you said in the intro, it’s pretty straightforward. For undergraduate programs, their students four years after they graduate are going to need to earn more than working high school grads who did not go to college. And it’s a pretty similar test for graduate schools, right? So a program’s graduates need to earn more on average than those who finished college but did not go on to grad school. If a program dips below this earnings threshold for 2 years out of 3, then students will no longer be able to take out federal loans to attend that program.

Earlier this week, the Under Secretary of Education, Nicholas Kent, said of this change, quote, “if a program can’t show that it leaves its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers.”

I have also heard, though, Juana, from lots of folks – really a bipartisan collection of folks across higher ed – who say, look, this is a pretty reasonable expectation. Here’s Chris Madaio with the nonprofit Institute for College Access & Success.

CHRIS MADAIO: I mean, this is really a very low floor, right? I mean, high school earnings is not a exceedingly high metric for a program to meet.

SUMMERS: And, Cory, what can you tell us about the types of programs that might not be able to pass this new test?

TURNER: Well, fortunately, earlier this year, the U.S. Department of Education released a trove of data that give us a pretty good idea of where the hammer’s going to be dropping. Broadly speaking, the data show that more than 800,000 students attend a program that would likely fail this Do No Harm test. We also know roughly half of them attend private for-profit schools, which already have a reputation for shortchanging students.

SUMMERS: Right.

TURNER: One more really big red flag in the department’s data – undergraduate certificate programs. You know, the kind that bill themselves as a – like a short term, fast track into a specific career. Well, a quarter of all of those students in those programs are in one that would likely fail. And the program with the highest predicted failure rate is an undergrad certificate in cosmetology, with more than 90% of all of those programs leaving their students worse off.

SUMMERS: Oh, interesting. I’m really curious, though, about more traditional bachelor’s and master’s programs. How might they fare?

TURNER: Really well. According to the department’s data, only about 1% of bachelor’s degree programs would fail the test. And it’s a bit higher for master’s degrees, about 4%, but still not bad. There are, though, some interesting patterns in the kinds of programs that fail more often. At the master’s level, we’re talking about mental and social health services. And then at the four-year bachelor’s degree level, it’s programs focused on theater, fine arts, music.

SUMMERS: I mean, I could imagine that some people might stop studying subjects like the ones you just mentioned because of this rule as well as a lack of access to student loans, which, I mean, that kind of calls into question what higher education’s supposed to be all about.

TURNER: Totally. I – this is what I find so fascinating about this whole idea, Juana. Like, do these numbers mean that these programs are bad? In some cases, yes. But in some cases, I think it also means that the U.S. economy just doesn’t value the arts. So we’re actually going to poke at this for a few more minutes with a colleague of mine. Her name is Tiffany Camhi. She’s an education reporter with Oregon Public Broadcasting, and she has the story of a young teacher who graduated from a music program that would likely fail the government’s new earnings test. Let’s take a listen.

CINDY FLORES: Oh, one, two, three. One…

(SOUNDBITE OF MUSIC)

TIFFANY CAMHI, BYLINE: Cindy Flores loves teaching mariachi music to middle and high school students in Oregon’s Salem-Keizer School District.

FLORES: Their part goes like this…

(SOUNDBITE OF MUSIC)

FLORES: …Two, three, beat.

(SOUNDBITE OF MUSIC)

FLORES: Two, three.

(SOUNDBITE OF MUSIC)

CAMHI: To get this dream job, she first had to study music at Portland State University and then get a teaching license. She took out federal student loans to pay for it all.

FLORES: I don’t know. I feel like there’s good side to it, really bad side to it. The good side is I was able to complete my degree. Like, that was the whole reason why I wanted to go to college was so I can get a music degree.

CAMHI: The bad side was that by the time she got her license, she was $55,000 in debt. Still, she says it was worth it.

FLORES: You know, it’s – if it wasn’t for PSU and the loans I could get, I wouldn’t a Mexican-American mariachi teacher for my Mexican-American students.

CAMHI: But future music students at PSU might not have the same access to federal financial aid. That’s because the school’s undergraduate music students often don’t earn as much as high school grads. Education department data shows the university’s program would likely fail the new federal earnings test. But do students really go to music school to make money?

LEE ANN SCOTTO ADAMS: And earnings is only a small piece of that puzzle.

CAMHI: Lee Ann Scotto Adams heads the Strategic National Arts Alumni Project. The nonprofit studies what happens to arts graduates. And Adams has a problem with this new federal earnings test. She says it’s a one-size-fits-all measure of student success.

SCOTTO ADAMS: Yes, you need to make money and earn money to make a living to survive, but we see our creative workers, they want to make an impact culturally. They want to make an impact on their community. And these are all metrics that fall outside of just straightforward earnings metrics.

CAMHI: Adams also takes issue with measuring earnings four years after graduation. She points to survey data that shows arts graduates often have unpredictable incomes at first, but their pay tends to stabilize and increase over time.

(SOUNDBITE OF MUSIC)

CAMHI: Back in Oregon, Cindy Flores feels lucky to have full-time work teaching music.

FLORES: You get it?

UNIDENTIFIED STUDENT: I get it.

FLORES: It’s easy. We’re going to play it this time…

CAMHI: That’s in spite of all her student loan debt.

FLORES: It is never about the money. I realized I wanted to have a career in music when I was in the eighth grade because every music teacher I’ve had in the past was such good role models in my life, and I want to be part of that community.

CAMHI: And to be that kind of role model for her own students.

For NPR News, I’m Tiffany Camhi in Salem, Oregon.

FLORES: Oh, one, two, three. One…

(SOUNDBITE OF MUSIC)

SUMMERS: And NPR’s Cory Turner is still with me here in the studio. And, Cory, as we just heard in that reporting, there’s not a simple formula to calculate a career’s worth. And as you pointed out earlier, this Do No Harm provision, it’s not a particularly high bar, but it doesn’t take into account what we heard from Cindy Flores, that she’s wanted to do this since she was in eighth grade, that she’s passionate about teaching kids music. Is there anything else that you think this new rule misses?

TURNER: Yeah. I think there’s one big wildcard that’s not in the formula, and that is student loan debt. There was a lot of debate about whether debt should be included in this new test. They decided against it. But, you know, there’s a huge difference, using music as an example, between a graduate struggling with low pay and being debt free and a graduate struggling with low pay and also paying off 50- or $60,000 in debt. And I wonder if they had included this in the formula, you know, how many more programs out there – especially at more prestigious, expensive schools – would start to look like a bad deal?

SUMMERS: NPR education correspondent Cory Turner. Thanks.

TURNER: You’re welcome.

(SOUNDBITE OF KAYTRANADA SONG, “SNAP MY FINGER (FEAT. PINKPANTHERESS)”)

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