Low-Paying Degrees at Risk of Losing Federal Funding

The Department of Education recently announced the successful creation of a measure for accountability within higher education degree programs. The new rule requires that college degree programs show their alumni earn more than the average high school graduate to continue to receive federal funds. These measures will go into effect for all higher education learning programs, from trade schools and certificate seekers all the way through community colleges and four-year institutions.

According to a statement put out by the Education Department, “under the proposed framework, institutions will lose access to the Direct Loan program if they fail to meet the relevant earnings thresholds for two out of three years. Further, if at least half of the institution’s Title IV recipients or half of the institution’s Title IV funds come from these failing programs, those programs will also lose Pell Grant eligibility.”

Based on data from the U.S. Bureau of Labor Statistics, the average weekly income for a high school graduate with no further education in the United States is $935, which is a yearly income of approximately $49,600. For the purposes of the framework, however, a test will be performed to measure the outcome of higher education programs.

The test will compare the earnings of program graduates to an earning benchmark. The earnings, according to the Education Departments announcement, will be calculated using “the median earnings of Title IV graduates who are working and not enrolled in college, measured four years after graduation.” This is then compared to the benchmark earnings, which take “the median earnings of working 25 to 34-year-olds with the relevant credential level (high school diploma or bachelor’s degree) in the relevant geographic area (state or nation) in the relevant field of study (if applicable).”

If the benchmark is higher than the calculated earnings, a program has failed the test. If the program then fails for two years in a three-year period, it will no longer be eligible for federal funding.

Postsecondary Enrollment Sees Modest Uptick

Enrollment at U.S. colleges and universities rose slightly, about 1 percent, in fall 2025, according to Final Fall Enrollment Trends from National Student Clearinghouse Research Center, a report that is released every January. In fall 2025, there were more than 19.4 million postsecondary enrollments: there were 16.2 million undergraduate and 3.2 million graduate students. Fall 2024 data reported 19.2 million enrolled students. This gain this year was driven primarily by undergraduate growth of approximately 1.2 percent while graduate enrollment dipped slightly by 0.3 percent.

Out of all institutional types, community colleges grew the most with enrollment growing by 3 percent. this gain is due in part to an increase in dual enrollment students (student enrolled in both high school and college courses) of around 3 percent, a similar number to undergraduate enrollments among 18-year-olds across all institution types. Public four-year institutions also saw growth of around 1.2 percent. Private colleges, both for-profit and nonprofit, did not fare as well and saw a decline in enrollment of approximately 1.3 percent.

The report also revealed that undergraduate certificates and associate degree programs are growing at a faster rate than bachelor’s degree programs (1.9 percent and 2.2 percent compared to 0.9 percent, respectively). International student enrollment also took a hit in the fall, with international graduate enrollment dropping 5.9 percent and undergraduate only increasing by 3.2 percent compared to last year’s 8.4 percent.

From a geographic perspective, the South was the only region with a large increase in enrollment in the fall, with a growth of 3.1 percent. All other regions saw steady enrollment with no gains or losses higher than 1 percent. Online and multi-state institutions saw a loss—driven by declining levels of undergraduate enrollment—of 1.6 percent. With regard to enrollment by state, Alabama and Georgia saw the largest growth of 4.9 percent from the previous year while Washington saw a loss of 4.6 percent.

Final Fall Enrollment Trends also reported on trends in students enrolling in specific academic majors. For the first time since 2020, there was a decrease of students enrolled in computer science majors; there are currently 1.1 million students enrolled in computer science programs. Other majors have increased in popularity. All engineering programs except computer engineering have double-digit gains across all institution types. Health majors in all forms also saw a second year of growth of about 11.2 percent.

The full report is online at https://nscresearchcenter.org/final-fall-enrollment-trends/.

Economic and Workforce Development Remain a Top Priority for States

Economic and workforce development continue to remain at the top spot of priorities for states, according to the recently released State Priorities for Higher Education in 2026 from the State Higher Education Executive Officers Association (SHEEO). The report was based on a SHEEO survey of state higher education leaders across the country about their top concerns entering 2026.

The top priority is a mainstay of the report, having claimed the average top spot over the last four years: economic and workforce development. While it came in second last year, 97 percent of respondents identified development as being “important” or “very important.” Recently, several measures on the federal and state levels have been enacted to work toward this goal.

“Among the opportunities for states to address economic and workforce development this year is the expansion of Pell Grant eligibility to short-term job training programs through Workforce Pell,” according to SHEEO in the press release announcement for the report.

Affordability of higher education took the second position, a major leap from last year where it held the sixth spot. While this is listed as a top concern, states are the main driver of keeping costs down through state appropriations for lower tuition rates for students and targeted use of financial aid. According to the report, “both sources of support have remained steady or increased in recent years,” which lowers the cost of postsecondary education for students. Several states have taken measures to reduce the cost of higher education through tuition freezes or expanding “statewide promise” (free college) programs.

The next spots on the priority list for states are higher education’s return on investment, state operating support for public institutions, and college completion and student success. All of these issues within the top five were also present in last year’s list of priorities.

Other concerns among states are federal policies, state funding for financial aid, retaining college graduates, commonly referred to as “brain drain,” student transfer pathways, and lastly, dual enrollment, early college, and/or other K–12 connections. While not making the top 10 list, leaders also highlighted their concerns around the public perception of higher education, tying back to return on investment concerns, as well as the effective use of state data/data systems.

“[The year] 2026 holds a lot of unknowns as we look to see what state legislators will prioritize and how changes at the federal level will impact states,” said Tom Harnisch, SHEEO vice president for government relations. “Economic and workforce development continues to be top of mind—and with the implementation of Workforce Pell rolling out later this year, we’re optimistic that states will continue to make advances in addressing workforce needs.”

The full report is online at https://sheeo.org/wp-content/uploads/2026/01/Policy-Issue-Survey.2026.pdf.