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

July 10, 2026

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

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

July 10, 2026No Comments8 Mins Read
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Students considering any of the at-risk programs will not immediately lose access to federal aid. Although the accountability test is being introduced this month, its implementation will be phased in over the next few years.

transcript:

JUANNA SUMMERS, HOST:

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

CORY TURNER, AUTHOR: Hey, Juana.

SUMMERS: So Corey, losing access to federal student loans sounds like a really big deal. Tell us exactly how this Do No Harm test will work.

TURNER: Yes. So this new test comes thanks to last year’s GOP One Big Beautiful Act. And, I mean, really, as you said in the introduction, it’s pretty clear. For bachelor’s programs, their students four years after graduation will have to earn more than working high school graduates who didn’t go to college. And it’s a pretty similar test for graduate schools, right? So graduates of a given program should earn more on average than those who graduated from college but did not go on to graduate school. If a program falls below this income 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, Deputy Education Secretary Nicholas Kent said of that change, quote, “if a program can’t show that it leaves its graduates better off financially than if they never enrolled, it shouldn’t be underwritten by federal taxpayers.”

Also, I’ve heard, Juana, from a lot of people—a really bipartisan collection of people in higher education—who say, look, that’s a pretty reasonable expectation. Here’s Chris Madaio of the nonprofit Institute for College Access & Success.

CHRIS MADAIO: I mean, it’s really a very low floor, right? I mean, high school revenue isn’t an extremely high metric that a program needs to meet.

SUMMERS: And, Corey, what can you tell us about the kinds of programs that might fail this new test?

TURNER: Well, fortunately, earlier this year the U.S. Department of Education released a set of data that gives us a pretty good idea of ​​where the hammer is going to fall. Overall, the data shows that more than 800,000 students attend a program that is likely to fail the Do No Harm test. We also know that roughly half of them attend private for-profit schools that already have a reputation for underperforming students.

SUMMERS: Exactly.

TURNER: Another really big red flag in the department’s data — undergraduate certificate programs. You know, the ones that are presented as — as a short term, fast track to a particular career. Well, a quarter of all those students in those programs are in one that is likely to fail. And the program with the highest predicted failure rate is a Bachelor of Cosmetology certificate, with more than 90% of all these programs leaving their students worse off.

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

TURNER: Really good. According to the department, only about 1% of bachelor’s programs would fail the test. And it’s a bit higher for masters, about 4%, but still not bad. However, there are some interesting patterns in the types of programs that fail more often. At Masters level we are talking about mental and social health services. And then at the four-year undergraduate level, these are programs focused on theater, visual arts, music.

SUMMERS: I mean, I can imagine that some people might stop studying subjects like the ones you just mentioned because of this rule, and also because of the lack of access to student loans, which, I mean, it calls into question what higher education is supposed to be.

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

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

(MUSIC SOUND)

TIFFANY CAMHY, AUTHOR: Cindy Flores enjoys teaching mariachi music to middle and high school students in the Salem-Keizer School District in Oregon.

FLORES: Their role goes like this…

(MUSIC SOUND)

FLORES: …Two, three, beat.

(MUSIC SOUND)

FLORES: Two, three.

(MUSIC SOUND)

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

FLORES: I don’t know. I feel like there’s a good side to this, a really bad side. On the bright side, I was able to complete my degree. Like, that was the whole reason I wanted to go to college was to be able to get a music degree.

KAMHI: The downside 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 be a Mexican-American mariachi teacher for my Mexican-American students.

CAMHI: But prospective PSU music students may not have the same access to federal financial aid. This is because music students at the school often do not earn as much as high school graduates. Education Department data show the university’s program is likely to fail the new federal income test. But do students really go to music school to earn money?

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

CAMHI: Lee Ann Scotto Adams heads the Strategic National Arts Alumni Project. The non-profit organization studies what happens to arts graduates. And Adams has a problem with this new federal means test. She says it’s a universal measure of student success.

SCOTTO ADAMS: Yes, you have to make money and make 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 are beyond ordinary revenue metrics.

KAMHI: Adams also has trouble measuring earnings four years after graduation. She points to survey data showing that arts graduates often have unpredictable earnings at the start, but their pay tends to stabilize and increase over time.

(MUSIC SOUND)

KAMHI: Back in Oregon, Cindy Flores is happy to work full-time teaching music.

FLORES: Got it?

UNIDENTIFIED STUDENT: I ​​see.

FLORES: It’s easy. This time we’ll play it…

KAMHI: This is despite all her student loan debt.

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

KAMHI: And to be such a role model for his own students.

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

FLORES: Oh, one, two, three. one…

(MUSIC SOUND)

SUMMERS: And NPR’s Corey Turner is still with me here in the studio. And, Corey, as we just heard in the report, there is no simple formula for calculating the value of a career. And as you pointed out earlier, this Do No Harm provision, that’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 music to kids. Is there anything else you think this new rule misses?

TURNER: Yes. I think there’s one big wildcard that’s not in the formula, and that’s student loan debt. There has been much debate as to whether debt should be included in this new test. They decided not to. But, you know, there’s a huge difference, if we use music as an example, between a grad who’s struggling with low pay and debt-free, and a graduate who’s struggling with low pay and also paying off $50,000 or $60,000 in debt. And I wonder if they had factored that into the formula, you know, how many more programs out there—especially at more prestigious, expensive schools—would have started to look like a bad deal?

SUMMERS: NPR’s education correspondent Corey Turner. thank you

TURNER: You’re welcome.

(SOUNDBITE FROM KAYTRANADA’S SONG SNAP MY FINGER (FEAT. PINKPANTHERESS))





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