Federal Register #2026-13286

Final Rule: Earnings Accountability Framework for Title IV Higher Education Programs

The U.S. Department of Education, Office of Postsecondary Education, has issued final regulations establishing an earnings accountability framework for higher education programs receiving Title IV federal student aid. - Government Buyer: - U.S. Department of Education, Office of Postsecondary Education - No Original Equipment Manufacturers (OEMs) or commercial vendors are involved, as this is a regulatory action, not a procurement. - Products/Programs Affected: - Cosmetology Certificate Programs (CIP 12.04) - Approximately 1,450 programs, with about 93% expected to fail the new earnings test - Somatic Bodywork Certificate Programs (CIP 51.35) - Dental Support Services Certificate Programs (CIP 51.06) - Mental and Social Health & Allied Professions Masters Degree Programs (CIP 51.15) - Teacher Education and Professional Development Associate Degree Programs (CIP 13.12) - Drama/Theater Arts Bachelor Degree Programs (CIP 50.05, 50.07, 50.09) - Notable Requirements: - Replaces the previous debt-to-earnings metric with an earnings premium measure based on graduates' median earnings compared to working adults - Programs failing the earnings measure in two out of three years lose Direct Loan eligibility for at least two years - Expanded reporting requirements for institutions, including tuition, fees, grants, and scholarships - Enhanced public disclosures and student warnings for at-risk programs - Administrative capability standards apply over a three-year period - Delayed implementation for certain programs (e.g., cosmetology, tipped income fields) - Exemptions for some programs, such as those enrolling only students with Specific Learning Disabilities and Autism Spectrum Disorder - Appeals process and voluntary withdrawal option to preserve Pell Grant eligibility

Description

This final rule by the Department of Education amends regulations governing institutional eligibility and the William D. Ford Direct Loan Program under Title IV of the Higher Education Act. It implements statutory changes from the Working Families Tax Cuts Act signed into law on July 4, 2025, including revisions to program eligibility requirements and the introduction of an earnings accountability framework. This framework limits Direct Loan eligibility to programs meeting certain earnings benchmarks. The regulation is effective July 1, 2027, with some instructions effective August 31, 2026.

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