Trump Rule Cuts Loans for Low-Earning Degrees
There’s an old joke about majoring in basket weaving. Now, colleges will be forced to evaluate programs whose graduates repeatedly earn less than workers with lower levels of education. If not, they’ll lose access to federal student loans under a new Trump administration rule aimed at making schools answer for poor financial outcomes.
The U.S. Department of Education rule reaches across public, private nonprofit and for-profit colleges. Undergraduate programs must show that their graduates earn more than the typical worker with only a high school diploma. Graduate programs will be measured against workers with bachelor’s degrees.
If a program fails that test in two out of three years, students enrolling in it will no longer qualify for federal Direct Loans. The penalty lasts at least two years. Continued poor performance could bring additional consequences, including the loss of Pell Grant eligibility for some programs.
For students, that means a low-earning degree may still be offered, but federal taxpayers will no longer finance it. Want to major in queer studies, the protest movement, or pole dancing? Go ahead if you can find a program, but don’t expect taxpayers to fund it.
“If a program cannot show that it leaves its graduates financially better off than if they had never enrolled, it should not be underwritten by federal taxpayers,” Education Under Secretary Nicholas Kent said.
The department points to a federal student loan portfolio of roughly $1.7 trillion, along with rising delinquency and default rates, as evidence that colleges need more accountability. The earnings measurement is scheduled to begin in 2027 under the new Student Tuition and Transparency System and Earnings Accountability framework.
The final rule includes some exceptions and delays. Enforcement will be postponed for certain occupations where tipped income is common, and schools may request time to close a failing program while allowing current students to finish.
The policy implements provisions of the Working Families Tax Cuts Act, which President Donald Trump signed in July 2025.
“Higher education has told high school seniors to blindly chase campus prestige for too long. We handed young adults tens of thousands of dollars in student loans to pursue degrees that the modern labor market simply does not value or need,” wrote Dr. Kent Ingle, president of Southeastern University in Florida in an opinion piece ahead of the decision. “The devastating result is a generation drowning in student loan debt, moving back into their childhood bedrooms, and holding diplomas that cannot secure a livable wage.”
–Metro Voice and wire services
