The U.S. Department of Education has put a new national standard in place that could strip federal loan access from some college programs whose graduates do not see measurable wage gains.
What the rule requires
Published guidance implementing the congressional “Do No Harm” earnings standard took effect July 1, 2026. Under the rule, each program—defined as a specific major or credential that accepts federal student aid—must demonstrate that the median earnings of its completers four years after finishing exceed the median earnings of a comparable group that did not enroll in postsecondary education.
How each program is judged:
- Undergraduate programs (including certificates): must exceed the median earnings of working adults ages 25–34 with only a high school diploma in the college's state, or the national median if more than half of students come from out of state.
- Graduate programs: must beat the median earnings of working adults ages 25–34 with only a bachelor's degree.
| Program type | Comparator group |
|---|---|
| Undergraduate/certificate | Working adults 25–34 with only a high school diploma (state or national) |
| Graduate | Working adults 25–34 with only a bachelor's degree |
Consequences for programs and students
The rule lays out a clear penalty: a program that fails to meet the earnings test in two of three consecutive years will lose eligibility to receive federal Direct Loans for its students. Losing Direct Loan access can make a program effectively unaffordable for many applicants because federal loans are the main source of student borrowing with comparatively low fees and broad repayment options.
National College Access Network (NCAN), which educates college access practitioners and advisers, urged readers to note that the rule aims to block programs that leave students worse off financially than if they had not enrolled. NCAN also acknowledged concerns that the test could unintentionally restrict programs that provide social value but modest financial returns, such as social work or early childhood education.
“The rule matters for the students NCAN members serve because it could limit the postsecondary programs that are available to them,” NCAN said.
Scope and timing
The Department of Education finalized the test as part of the Student Tuition and Transparency System (STATS) after Congress included the “Do No Harm” standard in the One Big Beautiful Bill Act (OBBBA) enacted in July 2025. NCAN said most programs are expected to clear the threshold easily; programs that fail are those where typical completers would leave earning less than comparable workers who never enrolled.
Colleges will be measured on median earnings of completers measured four years after completion. The use of median earnings—rather than an average—means the test focuses on the typical outcome rather than being skewed by a small number of very high earners.
The rule changes the accountability landscape for postsecondary programs that rely on federal student aid. Institutions with programs at risk will face policy and enrollment decisions if their data show earnings shortfalls over multiple years. NCAN and other organizations that work with students and advisers are preparing guidance and tools to help compare programs under the new standard.
