Background & Context§
The U.S. Department of Education has begun implementing a new accountability test for colleges and universities, mandated by the One Big Beautiful Bill Act. The test, known as "do no harm," requires that undergraduate programs produce graduates who earn more than high school-educated workers, and graduate programs produce graduates earning more than those with only a bachelor's degree. Programs failing for two out of three consecutive years could lose access to federal student loans, reshaping the landscape of higher education funding. This policy directly addresses rising concerns over the cost and value of college, but raises fundamental questions about the purpose of education beyond financial returns.
The News: What Happened Exactly§
Starting this month, the Department of Education is phasing in an earnings-based accountability test for most colleges and universities. Under Secretary of Education Nicholas Kent stated, "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." The test uses a simple metric: undergraduate program graduates must earn more than the median income of workers with only a high school diploma (about $30,000–$41,000 annually depending on state), while graduate program graduates must exceed the median earnings of bachelor's degree holders. Programs that fail for two consecutive years out of three will be designated as "low-earning outcome programs," potentially losing eligibility for federal student loans in the 2028–2029 award year.
The Department estimates that the vast majority of programs will pass easily, but over 800,000 students are currently enrolled in programs likely to fail, with roughly half at for-profit institutions already under scrutiny. Notably, prestigious music programs such as The Juilliard School, New England Conservatory, and Indiana University Bloomington's Jacobs School of Music are among the 14% of bachelor's music programs predicted to fail. The test currently does not account for student loan debt, meaning a graduate struggling with low pay but debt-free is treated the same as one with heavy debt.
Advocates argue that earnings alone are a narrow metric. Lee Ann Scotto Adams, executive director of the Strategic National Arts Alumni Project (SNAAP), said, "Earnings is only a small piece of that puzzle." Her colleague Doug Dempster warned that cutting low-earning arts programs could impoverish cultural life, as artists contribute crucially to society. Christopher Madaio of The Institute for College Access & Success noted the threshold is "a very low floor," but critics emphasize that creative careers often have nonlinear earnings trajectories, with lower initial salaries but long-term satisfaction and cultural impact. The Education Department will begin calculating earnings data in early 2027, with potential financial aid cuts starting in 2028.
Historical Parallels & Similar Incidents§
This policy recalls the 2014 "gainful employment" rule under the Obama administration, which targeted for-profit colleges whose graduates had high debt-to-income ratios or low repayment rates. That rule similarly used earnings data to determine eligibility for federal aid, leading to the closure of many for-profit institutions like Corinthian Colleges and ITT Tech. The gainful employment rule faced legal challenges and was eventually reversed in 2019, but its core idea—linking federal funding to student outcomes—remains controversial. Unlike the current rule, the gainful employment rule focused on debt-to-earnings ratios and was limited to for-profit and vocational programs. The new "do no harm" test applies to all undergraduate and graduate programs, including at non-profit and public institutions, representing a significant expansion of federal oversight.
The current test also shares similarities with the College Scorecard, launched in 2015, which provides earnings data for colleges but without punitive consequences. The Scorecard was intended to inform student choice, whereas the new test carries direct financial consequences for programs deemed insufficient. The phased implementation over several years mirrors the gradual rollout of the gainful employment rule, but the absence of debt considerations in the current metric is a notable difference. Experts point to the ongoing debate about whether earnings capture the full value of education, particularly for fields like the arts where intrinsic and societal benefits are high but immediate monetary returns are low.
Another parallel can be drawn to the Australian government's 2020 Job-ready Graduates package, which tied university funding to graduate employment outcomes and earnings. That policy reduced funding for humanities and arts degrees while increasing support for STEM and teaching fields, triggering protests and accusations of devaluing essential critical thinking skills. Similarly, the U.S. test could incentivize colleges to cut or de-emphasize programs in fine arts, music, and humanities, potentially reducing diversity in education and the workforce. Historical examples from both countries show that performance-based funding can lead to unintended consequences, such as grade inflation, narrowing of curricula, and reduced access for disadvantaged students. These parallels highlight the challenge of designing accountability metrics that align with multiple societal goals, from economic mobility to cultural enrichment.