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 backed by President Donald Trump’s Working Families Tax Cuts Act and existing departmental authorities.The move comes as the federal student loan portfolio nears $1.7 trillion, with concerns that many students are left financially disadvantaged after completing higher education. Officials describe the proposal as a structural shift intended to address borrowing levels and align academic programs with labor market demands.Proposed earnings benchmarks for program eligibilityUnder the draft rule, undergraduate programs would lose access to federal student loans if their typical graduates earn no more than individuals with only a high school education. Graduate-level programs would be required to demonstrate earnings that exceed those of an average bachelor’s degree holder.Programs that consistently fail to meet these benchmarks could also lose eligibility for Pell Grants in certain cases. The framework applies uniformly across all institutions, regardless of sector or tax status, introducing a single accountability standard across higher education.Framework shaped by AHEAD committee consensusThe proposal follows consensus reached by the Accountability in Higher Education and Access Through Demand-driven Workforce Pell (AHEAD) Committee. The group, comprising representatives from taxpayers, legal aid organizations, higher education institutions, businesses and students, agreed on a unified accountability model earlier this year.The agreed framework measures outcomes across all program types, from certificates to graduate degrees, using federally reported earnings data. It draws on provisions within the Working Families Tax Cuts Act as well as existing authorities such as Gainful Employment and the 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 feedback and may revise the regulation.The proposal represents the final installment in a set of three rules designed to implement student aid reforms under the Act. It follows a negotiated rulemaking process required under Section 492 of the Higher Education Act of 1965, which mandates public and stakeholder input before formal rule publication.Background to negotiated rulemakingThe Department announced plans to begin negotiated rulemaking on July 25, 2025, following legislative changes to federal student aid. The AHEAD Committee concluded its second session on January 9, 2026, after five days of deliberations, with all participants supporting the draft regulations.Previous administrations had attempted to establish similar accountability measures without reaching agreement. The current proposal advances a consolidated framework intended to replace multiple overlapping regulations and enforce consistent standards across the sector.
