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On January 9, 2026, the U.S. Department of Education (ED) announced that negotiators on the Accountability in Higher Education and Access Through Demand-driven Workforce Pell (AHEAD) Committee reached consensus on a regulatory package that would require all postsecondary programs to pass an earnings test. While current regulations tied to gainful employment instituted an earnings test (and a debt-to-earnings test) for all programs at proprietary schools and certificate programs at all other schools, this regulation would apply an earnings test across all programs, regardless of sector. Failure of the earnings test under the consensus package would result in losing program eligibility for loans, and subsequently all Title IV aid for all programs that continue to fail. The revised proposal raises the standard by requiring programs to prove that undergraduates earn more than workers with a high school education alone and that those earning graduate degrees earn more than those who hold only bachelor’s degrees.
ED is implementing the new regulations as part of the accountability provisions of the One Big Beautiful Bill Act (OBBBA). This new consensus establishes an outcomes-based accountability framework that will apply uniformly across all postsecondary institutions and programs authorized under Title IV of the Higher Education Act.
What Board Members Need to Know
The new federal accountability framework applies across Title IV-eligible postsecondary programs and consolidates several existing accountability requirements. It also introduces an earnings-based standard that ED will use to assess program eligibility for federal student loans and for some programs that utilize Title IV aid.
Key Issues
- Earnings Accountability Metric: ED will evaluate postsecondary programs using an earnings benchmark that compares graduates’ median earnings with defined peer earnings thresholds. For undergraduate programs, the benchmark will be the earnings of working adults with a high school diploma; for graduate programs, the benchmark will be the earnings of working adults with a bachelor’s degree. Programs that fail to meet the benchmark in two out of three consecutive years would lose eligibility for Direct Loans.
- Pell Grant and Campus-Based Aid Eligibility Implications: Under the consensus framework, if an institution has a specified share of programs that fail the earnings test for an additional year after losing eligibility for Direct Loans (measured by program count, Title IV funding, or Title IV recipients), those programs would also lose eligibility for other Title IV aid, including Pell Grants and campus-based aid.
- Alignment of Accountability Measures: The consensus package removes the existing gainful employment debt-to-earnings metric and incorporates a new statutory “Do No Harm” provision into the Financial Value Transparency framework, resulting in a single set of accountability measures across all Title IV programs, regardless of sector.
Implications for Governing Boards
The accountability framework will require ongoing board-level attention to institutional outcomes and compliance, including:
- Monitoring program-level earnings and outcome data as they become available.
- Assessing institutional capacity to meet new reporting and accountability requirements.
- Coordinating with financial aid, academic leadership, and career services regarding program performance and student outcomes.
- Reviewing potential institutional responses if programs approach or fall below eligibility thresholds.
Next Steps
Under negotiated rulemaking procedures, ED will incorporate the consensus language into a forthcoming Notice of Proposed Rulemaking (NPRM) published in the Federal Register. The NPRM will be subject to public comment before ED issues final regulations. Current timelines indicate that the accountability provisions would take effect no earlier than July 2026, with initial earnings calculations and notifications expected to begin in 2027 and loss of Direct Loan eligibility expected to begin in July 2028.